The Business Case for SuccessFactors Extensions on SAP HANA Cloud Platform – Transition to “Smart HCM”

Smartphone with Fiori ExampleExtensibility enables us to innovate in the cloud and bring world-class HR “Add-on” solutions to customers faster.  However, it is sometimes difficult for customers to understand the value of Extensibility when looking at their current deployments of on-premise HCM and SuccessFactors.  Why?  Imagine you told people from the year 2007 that they can either buy a Nokia phone for $49 or a 64GB Smartphone for $749.  Their reference point for a cell phone was a system that holds “master data” of contacts and makes “transactions” like calling other people and sending text messages. Nobody believed that people from 2007 want to know something about the phone storage or the concept of apps as extensions to the core “transactions”.   Yet today, the idea of a 64GB smartphone is a normal daily routine for all of us (unless you are a retro fan and love your Nokia).

The 2007 moment when smartphone revolution started is exactly how it feels today with Extensibility in Human Capital Management.  We are on a transition not only to the Cloud for HR processes, but to a “Smart HCM”.  Partners like Accenture continue to be excited about the possibilities and advancements they can deliver with the SAP HANA Cloud Platform.  Early adopters at customers like Timken and SAP HR & IT are already realizing the potential firsthand.  Some may still not understand the value and fear the costs as barrier for adoption.  So let’s talk about these costs and value customers get with Extensions on the SAP HANA Cloud Platform.

We break it down in two major paths on how to unlock “Smart HCM” at your company:

  1. Buy the SAP HANA Cloud Platform to build new custom Extensions.

To continue on the earlier metaphor, this means you buy the 64GB Smartphone and it comes with all the capacity and tools for developers, business analysts and IT to “load” your new HR custom Extension apps your business needs. The type of apps can range from simplified experience and renovated UIs on top of your on-prem HR or SF system, to new workforce real-time analytics, all the way to process automations you always wanted in the HCM system in order to get rid of the Excels and macros your company still uses.  Not to mention the collaborative and mobile scenarios you always kept for the better days.  And we take care that you should never worry about the hardware, software, security and integration required for running your new Extension. So what’s the price tag?

Our 64GB Standard Edition to support you in building the first Extension apps lists at $3,932/month.  Let us break down the cost for such scenarios per user in three target situations:

  • Run a pilot for a division of 1,000 employees at $4 / user / month
  • Get a region or your entire midsize company of 10,000 employees to use Extensions at $0.40 / user / month
  • Or, you are a large enterprise of 30,000+ employees and the cost goes down to $0.13 / user / month

You can pilot at low risk and cost to determine the financial impact.  Or if you can already show how your new Extension can save your company even just 50¢ / user / month or add that as revenue, then your ROI is proven for rolling out the Extension in the region or company-wide.

Note we did not cover the costs for building and testing the new Extension app(s).  Those are fixed costs that need to be considered on top of the 64GB platform subscription.  And you might have technically-savvy people in your company that can already take on these tasks to minimize that cost.

  1. Buy Partner Extensions to run innovative apps powered by the SAP HANA Cloud Platform.

JobPts Extension App

If you are still unsure about option 1, and you are looking for Quick Wins to gain momentum and confidence in “Smart HCM” – then going for already-built Extensions is the fastest way to show results and gain some indirect exposure with the SAP HANA Cloud Platform.

Here, the scenarios are very concrete and you can focus your time in tailoring and personalizing the Extension to fit your company needs.  For example: JobPts is a new partner extension that was developed to allow companies to inspire achievement with peer-to-peer recognition and instant rewards.   SAP has customized and deployed it in about 2 months.  We started to use this extension internally to recognize that excellence occurs every day at SAP and to build a stronger culture of appreciation to acknowledge employee excellence.  And what’s the price tag?

The list price of the partner Extension on the SAP HANA Marketplace is at $3 user / month.  Also, in this scenario the Partner can operate the SAP HANA Cloud Platform for you, so there are no additional costs for the customer.  We offer partners to embed or OEM the SAP HANA Cloud Platform, so that these Extension apps are consumed as a SaaS subscriptions in a multi-tenant environment.  As the Partner scales up more users and customers, they can share the cost savings and provide much lower price points.  So the price can potentially drop in the range of $0.99 user / month or even lower.  Imagine telling people from 2003 that 99¢ songs on iTunes would change the way we buy CDs, trial and listen to music on Smartphone…

And when you compare today to HR SaaS prices, this is a very attractive value propositions for customers to get a “Quick Win” by piloting or onboarding entire company on Extension apps like JobPts.

Now that we understand the value and cost equation of “Smart HCM”, let’s end with the top 3 reasons we hear from customers who are early adopters of the SAP HANA Cloud Platform:

  1. We really like the fact that the HANA Cloud Platform is in the same data center as the rest of our SuccessFactors data set. This means the data is secure and compliant, performance is superb, and we can focus on our core business and innovation.
  2. We are committed to the SuccessFactors suite and see the value of using Extensions – and the HANA Cloud Platform is the core method to enable such extension apps
  3. The Extensions from Partners are fast to deploy and flexible so as our business needs & requirements change, the extension apps change with us.
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