Let’s look at the press release in our traditional commentary style (you can find the press release here):
ARMONK and ORLANDO — Leveraging their existing global strategic alliance, SAP SE (NYSE: SAP) and IBM (NYSE: IBM) today announced cloud-to-cloud integrations of the two companies’ industry-leading human resources (HR) software and services.
MyPOV – Interesting the authors of the press release point to the existing global strategic alliances – and I am sure SAP and IBM have a nice staple of them – but this is the first business application partnership that I am aware of. But of course it helps to be long standing partners. The most recent partnership we covered has been SAP and IBM partnering for cloud infrastructure – see here.
The product integrations are expected to help customers improve their business processes and make fact-based decisions more smoothly and simply about how they recruit and manage their workforces. The announcement was made at SAPPHIRE NOW, being held May 5-7 in Orlando, Florida.
MyPOV – This is extraordinary cautious language – the ‘product integrations are expected to help’ – they should be designed / built for that purpose. Looking forward to some probing and understanding this area better. But as standard in the cloud era – customer expect a vendor based integration between vendors for such partnerships – so it’s good to see we find this early in the press release.
With availability planned for mid-2015, the first offering from this alliance includes a planned integration between the SuccessFactors Employee Central solution and IBM Kenexa’s cloud-based HR software Talent Acquisition Suite. This integration is expected to enable IBM customers to move their HR information systems (HRIS) to the cloud with the leading core HR solution from SuccessFactors, an SAP company, while helping to protect their recruiting investments, and provide customers of SuccessFactors Employee Central with a broader set of options for recruiting, assessment and onboarding of candidates. This offering is planned to provide speedier integration with committed ongoing support with services and skills from both SAP and IBM.
MyPOV – As IBM had no HR Core system with Kenexa – it needs to partner with core HR systems vendors. And IBM has partnerships in place with all major vendors (e.g. Oracle and Workday) this one makes probably a little more sense than the other ones. To understand let’s realize that IBM probably needed this partnership to avoid competitors replacing Kenexa with a HR Core and Talent Management combination of products. SAP of course offers Talent Management, too, but the SuccessFactors products and EmployeeCentral are on different platforms. So the ‘integrated HR and Talent Management’ Suite message is a little harder for SAP to push with customers than the competitors on a single platform – and with that was a more logical partner, with probably a higher likeliness of success in the trenches. A Kenexa customer writing an RfP for an HR Core system will see now a combined IBM and SAP offer. Or better for IBM, the RfP maybe avoided. So a good move for both vendors, and likely for customers assuming the integrations that are planned for mid of the year reduce the cost to implement the Employee Central and Kenexa combo of products.
With expected availability later this year, an additional integration between IBM’s Learning Content Management System (LCMS) and the SuccessFactors Learning solution is planned to help customers get the right learning content to the right person in the most efficient way possible.
MyPOV – Usually partnerships like this one follow functional areas – this one is interesting as it combines Learning with Learning. Will be interesting to understand more what the thinking behind this integration is. And good to see that IBM and SAP offer also the next integration offering they plan under this partnership.
Building on a history of strong alliance between the two companies over the past 40 years in both consulting systems integration and business-process-as-a-service (BPaaS) solutions, and a number of successful joint deployments, the new agreements between SAP and IBM are expected to provide significant value for each company’s customers. Allowing customers to more easily build upon their capabilities by choosing from a wider set of solutions from both providers, SAP and IBM intend to provide skills and offerings to deploy and operate solutions made up of the combined set of capabilities.
MyPOV – A little too much talk about Services for my personal taste. IBM GBS can make any integration under the sun work, so this partnership is actually about reducing the cost of integration and shortening implementation cycles – all trends that are not favorable to bill more services. The BPaaS aspect is interesting, maybe some joined BPO customers (IBM has a dozen or so) are (one of) the drivers for this partnership. Most interesting on this paragraph is that SAP and IBM plan to ‘provide skills and offerings’ etc. – not products. So is this partnership all about business development for GBS? I guess not. Again good to see that IBM and SAP want to build something on top of the combined set of capabilities, but in my view that better be productized.
In addition, SAP and IBM plan to offer customers:
- Greater data sets across the entire HR spectrum: Customers have the opportunity to leverage the vast amounts of data from the SAP ERP Human Capital Management (SAP ERP HCM) solution, cloud-based SuccessFactors HCM Suite and IBM Kenexa Workforce Sciences for analytics, enabling more insights for better decisions on hiring, growing and retaining their workforce.
MyPOV – Interesting and good plan – but needs to be explained how. Will this go to SAP or IBM BI products? Recently all IBM BI offerings, especially in the Kenexa space had a Watson flavor – that is missing in the wording above. Maybe IBM wants to keep Watson to themselves – for now. Looking forward to learn more details at Sapphire.
- A better client experience: Customers that choose a mixed SAP and IBM solution to meet their HR technology needs can be expected to rely on an experience consistent with that of working with a single company. Collaboration in areas such as implementation and ongoing support are key elements of this alliance.
MyPOV – Laudable to make it a seamless process for customers to implement, operate and support the combined offering. Tougher to pull off in practice – so we look forward to the details and especially satisfied combined customers mentioning the achievement of the above plan.
“Any move to improve and better integrate HR software is a welcome one for large organizations such as BP,” said Richard Bye, vice president, Global HR Operations & HRIS, BP International Limited. “As a partner with both vendors, we will take a keen interest in the development of the new alliance announced between IBM and SAP.”
MyPOV – Good move to have a customer quote and have it before the vendor quotes. Good to see a blue chip customer like BP lending their voice to the press release. But a cautious quote, still better than none. Will be interesting to find out how many combined customers IBM and SAP have –I expect them to be in the low triple digits.
“We are excited to team with SAP to focus on changing the experience for clients. Our philosophy on the value of flexibility, choice and investment protection is strongly aligned,” said Debbie Landers, general manager, Kenexa and Smarter Workforce, IBM. “We are both committed to putting the client first and ensuring that those who choose to work with us clearly see 1+1 = 3 — and they obtain more value, more quickly. The opportunity to not only extend our existing solution reach together, but to team on bringing SAP data into IBM’s Talent Insights (powered by Watson Analytics) is expected to be a game changer for our clients who want to move more quickly to analytics-driven business decision making.”
MyPOV – Good quote from Landers, focusing both on the transaction and analytical side, and there we have Talent Insights – powered by Watson Analytics. So Watson is part of the mix, good news and a key differentiator from a cognitive computing perspective.
“We are very focused on helping our customers deliver value with their HR strategies and processes. This partnership intends to make it easier for our mutual customers to leverage the cloud solutions that help them achieve their goals so they can focus more on their business and less on integrating solutions,” said Mike Ettling, president, HR Line of Business, SuccessFactors. “SuccessFactors Employee Central is the fastest-growing solution in our HCM suite, and this deepening partnership with IBM means that IBM customers may be able to connect their current applications with our solution, preserving and extending their investments in IBM’s Talent Acquisition Suite. Customers today see the power and the simplicity of the cloud, and in their journey, they want to be assured they can continue the investments they have in what’s working for them today, while taking advantage of what will drive better business value tomorrow.”
MyPOV – Good quote from Ettling, too – investment protection is always a good theme to hit and more importantly to deliver. Good to get the insight (not a surprise though) that Employee Central is the fastest growing solution in the HCM suite.
Overall MyPOV
Congrats to IBM and SAP to a synergetic partnership, the first integration offering is clear in terms of win / win. The 2nd one with Learning to Learning needs more explanation and detail as well as the BI / Talent Analytics integration on the IBM side. But press releases cannot answer all potential questions – so we will ask them later in the week at Sapphire and keep you posted on the answers (hopefully we get them).From a broader perspective, we see two key takeaways:
- SAP and IBM are being pragmatic on partnering – which is good for joint customers. Both understand that the customer ‘must win’ (see in the quote above) and will do likely what it takes to get this done. Again good for customers.
- At the same time IBM and SAP have significant product development work ahead to keep their respective product suites up to speed with best practices and technologies. Both Kenexa and SucccessFactors have been serial acquirers before being acquired by respectively IBM and SAP. Both are now left with the yeoman work behind the scenes to unify and integrate these product suites, modernize them and harmonize them.
But for today – congrats to both IBM and SAP for an important announcement.
