Human resources departments in most enterprises share many of the same basic functions. But until recently, HR software systems needed to be extensively customized for each organization. That’s because enterprise processes such as payroll, recruiting, benefits tracking, and compensation policies have evolved with significant differences throughout various organizations. HR just isn’t as standards-based as, say, finance.
In the past few years, the differences have defied efforts to create HR management platforms that could be implemented quickly with minimal customization. “The typical HR platform implementation would involve a consultant who would start from scratch to come up with a design,” explains Marty Pitkow, global vice president, corporate development and growth initiatives at SAP SuccessFactors. The process, in which a consultancy worked closely with enterprise personnel to evaluate their needs and customize features, would typically take anywhere from one to two years. This timetable was costly and often frustrating for customers.
Then, about five years ago, a company called SuccessFactors was in the early stages of rolling out a new cloud-based approach to HR platforms that would provide more standardization—especially on processes involving regulatory compliance issues. The company also wanted to make it easier for coders to create new applications. Enterprise software giant SAP acquired SuccessFactors in 2012, making it a large part of its cloud strategy. Since then, the combined entity has made massive strides in refining its product, and has gained impressive customer reviews and market share. The key success ingredient has been constant feedback from implementation partners along with collaboration to develop new features. It’s based on a crowd-sourced strategy to improve organizational software platforms.
The impetus for this innovative approach can be traced back to the philosophy of SuccessFactors’ founder, Lars Dalgaard, who had a simple adage to guide decisions: “Does it matter for the customer?” Too often, Dalgaard believes, software makers do not focus their efforts closely enough on what the customers need to make their businesses more efficient. This was especially true in the realm of human resources platforms, where he felt much more could be done to make packages more useful out of the box. “He wanted to make sure implementation wasn’t a crutch for bad software,” Pitkow says.
Establishing closer working relationships with business partners—the consultants who implement SuccessFactors’ software such as Accenture, Deloitte, and Presence of IT to name just a few—was critical to the strategy. These firms work closely with customers while SuccessFactors’ developers are typically a step removed. Thus, business partners are best positioned to evaluate customer needs and note areas where the platform can be improved.
Working daily in the trenches, SAP SuccessFactors’ consulting partners tailor features for clients and address functional needs shared across industries and among organizations in the same industries. By sharing those insights with the platform developer, consultants greatly aid product development. By the same token, consultants benefit when the software developer incorporates these features into the platform, thereby improving tools they use on a regular basis. The results are more efficient implementation projects and happier customers. “We learn something new on every implementation,” Pitkow says.
The software developer’s business partners have created “a constant feedback loop” of continual improvements in standardization and functionality. Several years of this rapid improvement methodology have borne fruit. “We’re seeing some amazing stories,” he says. “Some customers are seeing a couple of months of implementation time for core human resources systems.” That’s quite a contrast from what used to take as long as two years.
SAP SuccessFactors has fostered an open product development approach, allowing consultants to develop and license applications for the platform. This provides business partners financial incentive to create new features, as well as improve functionality and overall system optimization. “Our philosophy is that we provide the software, and our partners bring in their thought leadership,” Pitkow explains.
That model has resulted in a greatly accelerated learning curve for system developers, he says, and a quickly improving prepackaged solution. “This way, our customers don’t have to just be tied to what we create,” Pitkow says. “It changes the dynamics of software development.”
For example, one partner created an application for enterprises to manage large alumni networks. The app enables users to track employees after they leave the organization and to subsequently maintain strong relationships with them. The idea is that some of these workers could be recruited back to the enterprise in the future. This way, alumni re-recruiting can be accomplished in a more organized, systematic way than the usual haphazard approach. While the app was created with a specific client in mind, it can now be adopted through a license agreement by any enterprise. There are more than 100 applications available today that were created similarly, Pitkow says, and more apps are being created every month.
SAP SuccessFactors’ collaborative development approach depends on creating and maintaining strong working relationships with its consultant partners. To succeed, both sides must be committed to do what’s best for customers and commit to resolving problems amicably. “You have to be willing to be vulnerable and trust your partners,” Pitkow says. “You can’t throw partners under the bus when something goes wrong. You have to trust each other in front of customers so that you can feel safe to take a risk.”
Building and maintaining trust and a mutually beneficial relationship is hard work for both sides, Pitkow says. He also observes that some partners invest more time and effort in developing apps and sharing information that can improve the platform. SAP SuccessFactors identifies the partners who are most willing to put the time in, and those who are willing to honestly share their insights and innovations. These partners are the most valuable and those with whom Pitkow and other SAP SuccessFactors executives work most closely.
Pitkow is more than enthusiastic about what his company and business partners will be able to deliver to customers in the coming years. More machine learning and analytics will be incorporated into the platform and applications. He envisions HR systems that will automate many mundane tasks, freeing up administrators to focus efforts on higher-value work.
For instance, when an employee is promoted to a management position, the parameters of his or her training program would be automatically compiled and fed to the individual. The organizational chart would be updated showing the new reporting structure. An event such as a promotion would thus kick off a series of downstream activities that would be performed without human intervention.
The implementation process can also be further streamlined, Pitkow explains. As the platform continues to benefit from partners’ innovations, less implementation work will be required for core HR applications. More intelligence will be built into the software package, and provisioning it for individual clients will be achieved faster. As these features come into being, they will fulfill the vision Pitkow has developed during his career, which began in HR for General Electric’s military and data systems unit. During this time, he gravitated toward systems work and eventually implemented and managed a company-wide recruitment system. That project set his professional course into full gear.
Throughout his career, including his tenure at two other software firms, Pitkow has been driven to bridge the gap between those involved with business operations and those working to deliver software for them. “It’s about making tools more about business effectiveness, not just about HR processes,” he says.
There’s always been plenty of room for improvement in that effort. The next few years hold the promise of substantial advancement, and Pitkow is thrilled to be a leader in this movement.