Predictive Analytics, Outcomes and Scalability: Keys for SuccessFactors

SuccessFactors recently hosted its Influencer Summit for analysts in San Francisco. Through the general business updates, the SuccessFactors platform, and the partnership program, president Mike Ettling focused on how it aims to remain relevant in today’s digital environment.

While Ettling assures that SuccessFactors is on track to exceed revenue, margin and renewal rate targets for 2017, like any company in growth mode, it has its challenges, including:

1. The need to hire enough talent to keep up with growth in an extremely competitive job market
2. Increasing SuccessFactors adoption
3. Managing the restraints of highly regulated industries, including BFSI and the public sector

SuccessFactor’s Platform Development in Full Swing

The R&D focus for the following year will be channeled into designing code for scale and stability, suite integration across the SuccessFactors ecosystem, and delivery on innovation announcements. Regarding software development, SuccessFactors highlighted the following areas for 2016:

• OneSuite: A key area of focus for SuccessFactors in 2016 will be to improve the user experience of its software. Accordingly, the company has changed ~80% of its employee and management screens and invested heavily in furthering the software’s mobility component. As HfS has highlighted, analytics are becoming increasingly mature in the HR market, and SuccessFactors will launch its embedded analytics solution in Q2 this year. Taking this a step further, the company will launch a predictive analytics application focused on correlating business outcome metrics, such as revenue and profitability, with workforce fluctuations. HfS views this as a major step forward that will be especially beneficial to enterprises in the CPG, manufacturing and retail verticals. The firm will include a “Reporting Center” in the manager and HR analysis interface of the software by Q3, and all of the Employee Central (EC) reporting will run on HANA.
• HR Momentum: To remain relevant in the marketplace, it is essential to adapt to the changing HR environments on a local level. SuccessFactors has included regional functionality including apprentice management capability in EC for EMEA, improved benefits handling in the US including 2017 open enrolment and enhanced recruitment capability brought in through its acquisition of MultiPosting in November 2015.
• Talent Next: SuccessFactors has implemented a task-tracking system into the platform, which links in with a customizable continuous performance management employee evaluation system.
• Intelligent Platform: SuccessFactors identifies the ability to scale as critical. Given its increase in annual logins from 576 million to 1.6 billion from 2014 to 2015, it appears to be adequately delivering on this. Another key issue the company highlighted was extensibility of the platform through its partnership ecosystem.

SuccessFactors can Challenge Workday in the Services Channel

The company is looking to both leverage its partner base in complimentary app development but also refine its governance of these partnerships to standardize on the quality of implementation and platform management. Standout partners in this space include Deloitte, Accenture, NGA HR and NTT Data (see HfS Blueprint SuccessFactors Services 2016). About 65% of major HR BPO providers are SuccessFactors implementation partners. Couple that fact with excellent revenue growth and it is apparent the software provider now has a major foothold in the market. Even so, the challenge of competing with Workday, especially in the talent management space, remains. However, through wide-scale BPO buy-in and developments within the platform through Talent Next, coupled with the acquisition of MultiPosting, SuccessFactors is well positioned to give Workday a run for its money in this space over the next two years.

The Bottom Line: SuccessFactors is SAP’s Best Bet to Align with the As-a-Service Economy

The writing off of legacy platforms is a major theme among both buyers and service providers in this market, although on-premises HCM systems are far from dead. SAP is still actively selling ERP and many larger buyers are still stuck with these systems. However, through implementation partnerships and refined integration processes, the challenge of moving over to the cloud is becoming less painful for buyers. Also, given the level of reporting and analytical insight, coupled with increasing levels of intelligent automation and holistic security from SuccessFactors, the company is playing an ever more important role in the evolution of the As-A-Service Economy.