SAP On Cloud HR: Q&A With Mike Ettling

19,000 employees. Those are more recent wins, but some of our largest HR customers include PepsiCo, which has more than 270,000 employees in multiple countries.

IW: What's the trigger, generally speaking, for a total cloud deployment?

ME: This is about a journey from A to B, not just choosing the sexiest software at point B. The majority of the risk in these programs is in how you handle that journey. The triggers are all different, and no two journeys are the same.

Some clients may have a latest-version SAP on-premises application as their core HR system. Their big pain point may be around adding talent, recruiting, and learning capabilities, but they still want to get a return on the investment in their on-premises system. Other customers have multiple instances of SAP HR, including older versions. For them, trying to rationalize instances and upgrades may make less sense than moving everything to the cloud. Every client is different in that regard, and that's why it's important to understand the journey the HR leaders are looking for.

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We also have clients who have PeopleSoft alongside an SAP ERP environment. Clearly the integrations to the rest of SAP are interesting, because HR systems and finance systems can't live in a vacuum. You need the org structures from HR in finance, and you need the cost centers from finance in HR. We do that very elegantly because we can offer both sides of the equation, even if one side is on-premises and one is in the cloud. Customers will use the hybrid model as part of a journey, not the end game, but we're in the best position to help clients on that journey.

IW: Does that boil down to offering a mix of on-premises and cloud options?

ME: It's because we've productized so many of the integrations that customers might need. For example, we have something called Side By Side, which is for customers who started deploying an HR system, but they only got part of the way through and then they stopped for whatever reason. Maybe they have 20 countries on core HR on premises, but they have 40 countries with nothing -- using spreadsheets or whatever. We can help them deploy the cloud option for those 40 countries while still getting an integrated view across the on-premises system using the side-by-side integration.

We've built a lot of prepackaged integration, which enables customers to solve their pain points without having to embark on a lot of rip-and-replace programs. They can get to point B with less risk and better ROI while addressing the pain points more quickly. With many of our competitors, you have to replace the core HR system to solve a talent problem. There's no way to do it any other way.

IW: SAP also likes to tout its global coverage. Is that mostly about language localization or payroll?

ME: It's both. Globalization and localization play at the HR level and at the payroll level. Employee Central has configurable localization for 72 countries, so that means all the HR data that you need to keep at a local level will be there, whether it's by French law or Korean law, with whatever workflows and process approvals are required. German law might require that Works Council has to approve something before an HR manager or line manager can approve something. In the UK, it might be okay for the line manager alone to approve a decision.

IW: What's the breadth and depth of coverage on the payroll side?

ME: Employee Central Payroll is localized for 26 countries, and we have configurable data fields that enable you to configure and store the data you need to drive payroll in other countries. SAP on-premises payroll handles 100-plus countries, and it integrates with Employee Central … In payroll the attitude is that if it ain't broke, don't fix it, so many customers who run multinational payroll are running the SAP Payroll on-premises application, and they really don't want to touch it.

IW: What are the biggest priorities for what you call strategic HR apps?

ME: Talent has clearly been the most popular add-on. But I would say the most strategic is learning. The learning space is going through a massive reinvention. We're shifting from a traditional top-down, train-the-student learning model to a sound-bite, bottom-up, everyone-is-a-teacher and everyone-is-a-student model. It's about teaching people in 10-minute to 15-minute sound bites on mobile devices. We've seen massive adoption of these learning techniques as well as through MOOCs (massive open online courses).

Learning is a really exciting aspect of HR at the moment, and it has massive, transformational implications for companies in terms of how they can create courses and drive learning. We've released something called Quick Guides, which allows people, on their iPhone or Android device, to create a short learning module, including video, pictures, and text, that they can publish to the learning environment.

Think about field engineers or shop assistants showing how they fix something, or how they display merchandise. When retailers put out a new product or promotion, now they can publish them quickly and they're available to sales assistants on their mobile phones. It's up and running quickly in time to drive fast-changing promotions.

IW: I understand you're going to be based in San Francisco. What's the business structure, and why San Francisco?

ME: We've taken SuccessFactors and on-premises HR and we've put it all together into an HR line of business that I run end-to-end. I'm responsible for everything from product through to sales. The magic of that model is that we can be independent, fast-moving, and nimble, so we can cater to line-of-business customers. We can also exploit the entire SAP machine, including sales, infrastructure, data centers, and everything else SAP is famous for. It's a unique model because it gives us the best of both worlds.

The reason I'm moving to San Francisco [from London] is that North America is the biggest and fastest-growing market for HR, for one, but also Silicon Valley is the innovation hub for HR worldwide. Much of my team is based in Silicon Valley, and that's where we see a lot of the innovation emerging.

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