There is no doubt that integration between SAP and SuccessFactors is the top priority for most SAP HCM customers. Over the past month SAP has released several blog on the topic such as Integration Technology Options and Licensing Info For Customers Using SAP HCM and SuccessFactors and SAP HCM integration with SuccessFactors BizXto attempt to add clarity to the various integration options that are available. Unfortunately customers have been getting a lot of mixed messages and incorrect information from the two sales organizations regarding licensing, costs and options needed to take advantage of the standard integrations that have been released and are planned for 2013. My goal in this blog is to set the record straight on where thing actually sit today.
Earlier in the year when SAP announced they were buying SuccessFactors one of the most common questions was What is your strategy to integrate SAP and SuccessFactors products? and enclosed was their response:
SAP and SuccessFactors have many common customers who use both solutions. These customers have been running systems side by side and the integrations between products are proven. However, in order to provide even better value for customers who want to leverage the market leading solutions from both SAP and SuccessFactors, we plan to build and deliver tightly coupled standard integration packages between the two platforms, considering multiple integration requirements:
- Cloud-based Talent, Recruiting, Learning and Social solutions, and Workforce Planning and Analytics solutions from SuccessFactors
- On-premise Core HR data
- One way and bi-directional data flows
Reading that it seems pretty clear what the SAP/SuccessFactors vision was around integration and given that SuccessFactors founder and leader of the SAP Cloud Business Unit Lars Dalgard mantra is “The Customer must win!” I thought I would take a deeper look at what technologies and costs will be needed for customers to achieve the level integration “promised” above as there are two core options.
One thing that is becoming clear is that NetWeaver will become the preferred integration technology for SAP OnPremise customers. The ONLY two options that support the more robust bi-directional integration (ie Compensation or Recruiting) between SAP and SuccessFactors are SAP NetWeaver PI OnPremise and SAP HANA Cloud Integration (scheduled to be released in Q1, 2013). If you are not familiar with these two options SAP’s Vice President of HCM Solutions Jean-Bernard Rolland does a good job explaining them in a recent blog:
- SAP NetWeaver Process Integration (SAP PI) is SAP traditional enterprise application integration software used to facilitate the exchange of information among a company's internal software and systems and those external parties. Before the current version, SAP PI was called SAP Exchange Infrastructure (SAP XI). Like other NetWeaver components, SAP PI is compatible with software products of other companies.
- SAP Cloud Integration technology offers the standard capabilities of an integration broker, mediating between entities with varying requirements in terms of connectivity, format, and protocols. It also reduces the TCO of a standard middleware integration by providing a common repository for interfaces with standard cloud capabilities, particularly multi-tenancy and configuration-based deployment.
Netweaver PI Option
Looking deeper into the Netwever PI integration option I was surprised to find that only roughly 40% of the SAP HCM customers have NW PI licenses. Given the amount of shelfware at many SAP customers I would guess that 30% or less actually have it deployed although that percentage would be higher for larger SAP customers. When I mentioned these numbers to SAP they would not confirm or deny which makes me assume they are in the ballpark. I decided to reach out to SAP Mentor and Netweaver PI Expert Daniel Graversen to get a sense of what it would take for a SAP HCM customer to install NW PI and he told me:
“With the latest releases of SAP PI (or Process Orchestration) a lot has been invested in getting the installation to be easier and faster. You would be looking at hardware requirement of three 12Gb servers at a minimum and it can run on both Windows and all Unix Variants. Installation of NW PI would take roughly a few weeks with Windows being easier deployment option from my experience. You would also require a database license if you cannot use MaxDB but many customers have some existing databases licenses which could be used. It will probably be around 40-50k€ for the PI installation with consulting and hardware and I'm not sure what additional SAP PI license requirements there would be”
I have no doubt it would surprise many customers to learn that they have to make an additional investment of 40-50k€ (or more), plus ongoing support and maintenance, to enable bi-directional integration between two companies under the same umbrella that has claimed for years that Integration is their DNA. A few weeks ago the story was even worse as SAP had ALSO planned to charge additional licenses for NW PI to SuccessFactors but they recently changed course and do NOT plan to charge SAP ERP customers who have a run-time license of NetWeaver any additional cost to use NetWeaver PI OnPremise to connect and get bi-directional integration with SuccessFactors.
SAP HANA Cloud Integration Option
Looking deeper into the SAP HANA Cloud Integration option that is planned to be released in Q1, 2013 for SuccessFactors integration is that SAP is still reviewing the subscription-licensing model. I have strongly recommended that SuccessFactors bundles the cost of the NetWeaver Cloud Integration within their existing SuccessFactors products much like they do with Boomi for Employee Central. This will allow them to be able to offer their customers a simple and cost effective option to get the more robust bi-directional integration packages that will be released starting in October 2012 and continue throughout 2013. It seems like a no brainer that customers who are licensing both SAP HCM and SuccessFactors products should not have to pay extra to take advantage of standard integration.
Impact and Options for SAP Customers
To summarize at a high level there are five options for customers to get SAP and SuccessFactors integration.
Option 1: Customers can utilize the simple CSV file based transfer of employee data from SAP to SuccessFactors using the integration add-on that SAP released in May.
Option 2: Customers can use their existing SAP NetWeaver PI infrastructure to integrate SAP with SuccessFactors. This will enable them to use all the future integration packs that are planned such as this one that was released on November 6, 2012.
Option 3: Customers can set up a new SAP NetWeaver PI OnPremise infrastructure to integrate SAP with SuccessFactors. This will enable them to use all the future integration packs that are planned.
Option 4: Customers can license and use SAP HANA Cloud Integration technology, when it is released in Q1, 2013. This will enable them to use all the future integration packs that are planned.
Option 5: Build custom integration between SAP and SuccessFactors. This is the model that 500 SAP customers used prior to the acquisition of SuccessFactors as their ONLY option was to take on the integration responsibility in-house and assume all the complexity, cost and long term support. That hasn't stopped SAP or SuccessFactors sales teams from stretching the truth to claim "there are over 500 customers already live with SAP and SuccessFactors integration" but obviously it is not an option I would recommend moving forward.
The bottom line is it is important for SAP HCM customers who are interested in moving forward with SuccessFactors in a hybrid deployment option to spend a lot of time researching what technology option will work best for their organization and have a clear understanding of its overall cost. The HR Technology landscape is extremely competitive and SAP has a golden opportunity to leverage the large investment they made in SuccessFactors if they stay true to Lars Dalgard mantra of “The Customer must win!” by offering them free and robust integration between SAP HCM and SuccessFactors. For more insights you can follow me on twitter or join the SAP and SuccessFactors group.
10/26 Update - Chris Kanaracus published an article called "SAP Details policies, pricing for linking cloud apps" that I would highly recommend you read as SAP has indicated they will finalize a decision in Q1, 2013.