A few days ago, SAP SuccessFactors held its user conference, SuccessConnect, in Las Vegas. The event was the same week as the HR Technology Conference and Workday Rising shows. As a result, the SuccessFactors news might have been competing with news from these other conferences. I’ll try to remedy that with this piece.
Who is SuccessFactors?
SuccessFactors was founded by Lars Dalgaard in 2001. The company went public in 2007 and bought a couple of firms along the way. It acquired the learning management system (LMS) Plateau and the site Jobs2Web.
In February 2012, SuccessFactors was acquired by SAP for around $3.4 billion. 2012 was a busy year for SAP as they also acquired procurement solution Ariba in September of that year. HR deals were big in 2012 with Oracle acquiring Taleo and IBM acquiring Kenexa.
An SAP spokesman indicated that SuccessFactors has over 9,000 customers today.
SAP SuccessFactors has a full HCM product line with functionality for core HRMS, talent acquisition, learning management, payroll, performance management, succession planning and more. The payroll piece is interesting as users may be using the Employee Central solution – a product with significant global market penetration.
SuccessConnect event overall
First, SuccessFactors had all of their top executives in attendance. It’s great to hear product news from the people at the top. Second, the customers in attendance were quite hungry to hear of new enhancements to the suite. I caught some of the product roadmap sessions’ content and watched these standing room only sessions delight customers. You know the kind of session I’m talking about: it was hard to see the presentation screens because all of the customers had their smartphones in the air taking snaps of the slides.
In an interview I did with TechTarget while at the show, I noted:
“It’s not enough to just have a transaction-processing HR system,” he (Sommer) said. ‘The business problems post-pandemic are very different from what was going on before the pandemic. So they are trying to bring additional capabilities to make the solution more relevant for employers in today’s extraordinarily challenging employment market.’
HR professionals are looking for applications that not only find and onboard talent but also better manage the talent they already have, Sommer said. SuccessFactors HXM’s new dynamic teams feature is well-suited for this and was very well received at SuccessConnect.
‘They had a monster crowd, and just getting into some of the rooms was tough because everyone wanted to hear everything,’ he said. ‘The audience was eager, hungry and generally very positive and looked like they were going to bring the information back to share with their colleagues.’
The SuccessFactors announcements
SuccessFactors made three main announcements at the show and a couple of other bits of news. One of these involves ‘Dynamic Teams’. According to SAP:
Dynamic Teams is a new capability that enables organizations to create, track, measure, and optimize the outcomes of teams that exist beyond traditional hierarchies. Organizations that use SAP SuccessFactors Performance & Goals can add objective key results (OKRs) to Dynamic Teams to track progress and measure success. Additionally, employees and dynamic teams are matched based on what people know, not who they know, using machine learning and AI within SAP SuccessFactors Opportunity Marketplace to make personal growth more equitable.
The key word in all of this is ‘dynamic’. Dynamic teams include more than just formal organizational structures. A dynamic team could be a quick ad-hoc group that must deal with a short-term fire drill. This new capability can help people connect other people together and form groupings that should be more successful. The groupings can range from short-term, informal efforts to large-scale, formal projects.
The engine behind the matching uses advanced technology and a skills ontology (see below) that does so much more than merely match some words to a person’s resume. In theory, this tool can help firms create winning teams and manage their results. And, the word ‘team’ may actually be overly-restrictive as companies could use this to help with mentoring relationships, customer pursuit teams and other assignments.
In reviewing other firms’ offerings in this space, the challenges have been in getting access to a data store where a person’s total skill inventory, soft skills, project skills and more are present. You might get bits of this in a performance management tool, an ATS database, or an HRMS, but it likely will leave you and employees wanting.
Some products will underperform as they lack any real smarts or rely on limited data. Those products just match keywords and are as abysmal in their results as ATS technology is to recruiting. Some tools only look at ‘hard facts’ like college degrees and work locations. They don’t even try to understand the real, unstated nature of a person (e.g., this person took over a failing project, rebuilt team morale and helped several team members become some of the firm’s most important go-to people on a number of key concepts.).
Buyers of such tools need to be cognizant of potential issues like:
- Does our firm have enough data to provide meaningful input to the AI/ML tools? The best AI tools often need a large data volume to draw conclusions of value. Smaller firms might not get the great results they want.
- Does our firm have personnel that can determine if the AI algorithms are biased or if there is bias in the data sets feeding them?
- Can the tool withstand a legal challenge? Can you explain how the AI works?
Buyers should resist the urge to use such tools for all-new uses like identifying people that the firm might want to fire/layoff or identifying which employees to promote (see Cath Everett’s cautionary piece on this). While it might be tempting to wonder why certain people are not being chosen for teams, it does not mean that they aren’t great contributors to the firm’s success. Using AI-based results for an unintended use case is ill-advised.
Skills ontology & growth portfolio
SuccessFactors announced two other new technologies: skills ontology and growth portfolio. According to SAP:
Skills ontology uses machine learning and automation to continuously identify an employee’s skills based on their role, responsibilities, experiences, and accomplishments, providing a holistic view of an organization’s skills on a global scale.
Growth portfolio is a dynamic library of employee attributes, including skills, strengths, workstyles, passions, and aspirations – bringing the whole self model to life.
These tools can provide some of the data feed stock for the dynamic teams tool described above.
Buyers should probe the ‘how’ behind the population of a persons’ skills inventory. Remember, some long-term employees could have been with the company ten or more years by now and whatever information on their skills that resides in an HRMS solution could be wildly out of date or materially incomplete. A tool that infers skills based on job descriptions, roles, special assignments, etc. might be a great starting point but it might not be complete or wholly accurate.
Likewise, asking the employee to fill in the gaps or verify information may not work as people might use this as an opportunity to exaggerate their skill sets.
And, don’t bother asking the person’s supervisor to validate and round out the information as that person may have left the company some time ago.
Lastly, skills, like many assets, can depreciate over time. For example, while I’m confident I could resurrect my aging COBOL skills, it might take some time for that to happen. So, is my dated COBOL programming skill relevant or should it not be a factor in a current skills inventory?
SuccessFactors is looking to tie all of these personal capabilities and characteristics into a unified, singular view of an employee. It’s certainly an admirable goal and I can see them expanding on this concept over the next several years/releases.
SuccessFactors will also deepen the integration of these new capabilities with other SAP applications like SAP S/4, Fieldglass, Ariba, Qualtrics and more.
These new capabilities are also permitting an expansion of SuccessFactors’ talent management functionality (see picture below). These capabilities are now part of the SAP SuccessFactors HXM (Human Capital Management) Suite.
This show’s main messages were all about new capabilities that will change the employee experience for SuccessFactors’ customers. But, the real star of the show, as far as many of the customer attendees, may have been the considerable number of product enhancements articulated in various breakout sessions.
Customers were hungry to learn of new capabilities that make the core SuccessFactors solutions hum. Days later, I’m still amazed at the zeal of customers in watching new Payroll enhancements being announced whether the solution is intended for: on-premises SAP ERP HCM Payroll; SAP S/4Hana private cloud; SAP SuccessFactors Employee Central Payroll; partner managed cloud-based SAP SuccessFactors Employee Central Payroll; or, the new public cloud Next-Gen payroll project that will first arrive in the UK and US markets. These nuggets were definitely crowd pleasing.
Maybe it was because this conference was a well-attended post-pandemic event that triggered so much customer interest. Customers there were in a feeding frenzy hungry for news. Some were even jazzed about some pretty minor things but I’m confident they returned to their employers with the headline stories, too. As conference outcomes go, that’s a good thing. People left knowing, directionally, where SuccessFactors is now and where it’s going. Now, SuccessFactors has to start working on next year’s news and announcements.