HR people really count, no matter what other bits of the organisation might think. So declared Jay Larson, SuccessFactors senior vice president, Enterprise, on day one of the Cloud business execution software vendor’s European user conference in Barcelona.
Larson was a last minute substitute for the missing SuccessFactors CEO Lars Dalgaard whose last minute absence caused some ripples among the gathered customers and prospects who were clearly left disappointed at missing out on one of the flamboyant Dane’s colourful keynotes. As it was, Larson delivered in a more low key style (who wouldn’t?), but cogently argued the ‘gospel according to Dalgaard’.
This is based around the unifying message that execution is what makes the difference. Essentially, since a repositioning of the firm back in September, what SuccessFactors reckons to do is to take the kind of practices and processes that it has always preached in its performance management background and apply them to all parts of the business, but particularly to senior business decision makers.
“Where we fit in is between strategy and results,” said Larson. “We close the gap between the strategy and the back end results. What is it that happens in that gap? That’s where people work! We help to bridge the gap between strategy and execution and focus on the business alignment. Is everyone across the business working on the right thing? As an organisation what you need is the right combination of business alignment and people performance that we can bring.”
Coming out of the HR closet
There are, argued Larson, important questions that all organisations need to ask. “Why should people care about the business,” he said, adding that this was where HR needs to step up to the mark and be counted. “This is a question absolutely and positively for the HR people. At many organisations it’s the people in HR who are the unsung heroes. These are people who work their tails off, but in many cases it’s been hard in the past to make the connection between them and the business or to quantify the value that HR is bringing to the business.
“What our BizX platform is all about is helping those HR people to get more recognition for the good work that they are doing,” he added. “It also tees up a very different conversation with the business managers and enables them to carve a more impactful and strategic role. Our own Chief People Officer says that what BizX helps her to do is to that bigger impact on the organisation.”
It’s time to be out and proud in HR, declared Larson. “This really is a fantastic time to be in HR,” he affirmed to a receptive audience of largely HR people. “There is an opportunity like never before to help drive the business. Anything up to 70% of operating costs are related to the workforce so to be able to turn up the dial in even a small way is an enormous opportunity. You can help change HR from being a automated process to something that is genuinely driving value and being recognised for doing so. That’s the breakthrough that’s right there in front of us all."
Proof in practice
OK, so that’s the basic gospel and the HR choir in Barcelona were ready to sing along with it, but outside the conference room, where is the proof that this message is being evangelised successfully? “We’ve seen acceleration on all fronts in 2009,” said Larson. “Six years ago, we basically sold Performance Management solutions, that was 90% of our total business. Today the Goals and Performance Management solutions are less than half of our total business. Our European business continues to grow and prosper and is an areas of enormous focus for us.”
The poster child for the European business, indeed for the global SuccessFactors business, is Siemens, which boasts what will be the world’s largest enterprise Cloud deployment with 420,000 users across 80 countries in 20 different languages. It’s a deal with added sweetness as Siemens has been one of SAP’s flagship customers and selected SuccessFactors over the German applications firm in this instance.
Representatives of Siemens were present in Barcelona, but apart from being asked to take a bow for choosing to go with SuccessFactors, kept a relatively low profile. (If the roll out goes according to plan, that will presumably not be the case by the time the next US conference takes place in San Francisco next summer…I’m just saying!)
But there were still plenty of customers on hand to testify to the value of moving to the Cloud model, such as Novozymes which began to implement SuccessFactors in 2008. “One of our main business drivers was the need to find a tool that could support our global growth,” said Thorbjorn Nielson, project manager at Novozymes. “As you grow fast as a company you need to be able to communicate your strategic KPIs with your workforce and your management.”
Novozymes is a Euro 1.1 billion a year Danish firm which specialises in the production of enzymes. It has sites across the globe that house 5200 employees. “We have become a global player,” explained Nielson. “We are very R&D driven and we need to be very competitive. We need to have good people. We try to profile ourselves so that we attract talent. That’s not really an issue in Denmark where we’re well positioned, but it’s a different story elsewhere. Growing fast makes everything more complex. We are very culturally diverse as a company and are working in a matrix organisation that can be difficult to manage.
“We started with SuccessFactors in 2008 when our number one HR goal was the need to develop a performance management process and have it implemented by 1/01/2009,” he explained. “This was driven by HR because performance management is traditionally considered the responsibility of the HR areas, but we got buy in from all the senior business management."
The SuccessFactors deployment emerged from a very specific set of requirements. “What we needed to have transparent business target anchored in the business strategy to enable execution,” recalled Nielsen. “We wanted to ensure that people could set their own business targets, meet them and let business managers see that they had been met. We had been unable to look across the business at that point.
“We had a lot of very critical projects running across our business units from R&D to sales through production units. To enable all that, we needed some way to track our KPIs and how they were executed. We also wanted one joined-up IT platform with improved user friendliness. User friendliness was the number one criteria as a tool is only valuable if everyone buys into it and uses it. If it’s not user friendly enough then only 60% of the organisation uses it.”
Prior to selecting a technology provider Novozymes project team defined a performance wheel, an exercise that produced some interesting findings. “One of the challenges we found was that the processes and ways of doing things on the business side were not as aligned as we had thought they were,” explained Nielsen. “People were defining targets differently, both across business divisons and around the world. With our focus on enabling execution, it was important that we worked with everyone moving onto the same cycle.”
With that thinking complete, the firm moved onto a technology provider selection ending up with a shortlist of Microsoft, StepStone, Softscape, SAP and SuccessFactors. These five were then sent a detailed request for proposals, from which SAP, Softscape and SuccessFactors emerged as the final three. “SuccessFactors was an easy choice in the end,” said Nielsen. “Novozymes was running SAP. That tends to lead to a very traditional picture where the IT people are very happy with that, as they were in this case. But the way of implementing SAP was more complex and more expensive while SuccessFactors and Softscape had far greater functionality. It was a unanimous decision to go with SuccessFactors – even the IT director agreed. SuccessFactors came out miles ahead of SAP.”
Larson said it was hard to measure some of the hard quantitative benefits of the SuccessFactors deployment as the firm was still completing its first iteration with the solution, but added that the ROI estimates laid down prior to the project had been deliberately conservative. He also pointed to the non-tangible benefits of the new solutions, such as increased employee engagement, higher levels of motivation, improved ability to work across a matrix organisation, reduced employee turnover and improved ability to meet compliance and quality requirements.
As the absent Lars Dalgaard would no doubt have said had he been present, Novozymes is a prime example of a SuccesFactors customer that has executed a successful transition to the Cloud. As eyes now turn to watch the progress of the Siemens poster child, it is perhaps important not to forget that there are a lot of companies like Novozymes that are reaping the benefit of the Cloud Computing paradigm on a daily basis.
For more on Cloud Computing and HR, see www.businesscloud9.com. The SiftMedia Business Cloud Summit 09 will feature end user case studies of HR and talent management in the Cloud – registration now open at: www.businesscloud9/com/summit