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In a high-profile customer win for SAP, Microsoft has begun to implement SAP SuccessFactors HCM tools, including Employee Central, with plans to roll it out for its 114,000 full-time global employees.
SAP's announcement of the marquee agreement comes after Aneel Bhusri, CEO of Workday, criticized Oracle and SAP at a press conference, calling them "frankensauruses." Bhusri said the two competitors lag far behind Workday in bringing large companies onto their cloud-based human capital management (HCM) systems. But SAP is now touting Microsoft and other big new users, and Oracle said it is growing more than twice as fast as Workday in software as a service (SaaS).
Phased rollout planned
Microsoft chose SuccessFactors HCM tools partly for their global capabilities, flexibility and open platform strategy, according to SAP. The company will conduct a phased rollout of the HCM Suite, said Vivan Mirchandani, senior director of business operations at Microsoft, in response to emailed questions.
Microsoft recently went live with SAP SuccessFactors Succession Planning and Learning Management systems, and its next area of focus will be to implement Employee Central , which is core HR, and onboarding, Mirchandani said, adding that Microsoft is also evaluating Workforce Planning and Workforce Analytics for implementation. Recruiting is also part of the suite purchased by Microsoft.
"No decisions have been made at this time about additional modules that we will look to implement," he said.
Microsoft to lead implementation
At this time, Microsoft has not decided whether to implement SuccessFactors Performance & Goals, for example, or the SAP continuous performance management application, he said.
Microsoft eliminated performance ratings for employees in 2013 and adopted a process called Connects, which emphasizes more timely feedback and meaningful discussions.
Microsoft will lead the implementation of the SAP HCM tools and is working with SAP to determine how the two vendors can best partner on implementation.
Custom software scrapped
Mirchandani said SAP SuccessFactors will replace a combination of Microsoft's homegrown custom software and SaaS products from other providers across the HR domain.
He did not comment on whether Microsoft conducted a formal request-for-proposal process for the HCM tools. "There were a number of considerations we made in selecting an HCM system, but, ultimately, we determined that SAP was the right partner for us," he said.
While there were a number of reasons for Microsoft choosing the HCM tools, one is that SAP will use Microsoft Azure as a public cloud service for SAP SuccessFactors products. Microsoft in October unveiled an expansion of a longstanding partnership with SAP, saying SAP will make its cloud-based HCM products available on Microsoft Azure over the next five years.
"Of course, partnering with a company that integrates with our ecosystem and extends our cloud platform was a factor," Mirchandani said.
SAP selects Azure
The selection of Azure was SAP's first move to supplement its own infrastructure and operate SAP SuccessFactors modules in a third-party public cloud. The selection recognizes the experience both companies have in supporting global enterprise clients, Microsoft said in a release.
SAP will have significant additional capacity to run operational workloads of SAP SuccessFactors on Azure, beginning with demonstration environments, to support its continuing growth.
Mirchandani said Microsoft uses a number of custom, on-premises and SaaS offerings, including Microsoft Dynamics, for ERP. He said it is premature to comment on specific types of analysis, but he said integrating software like SAP SuccessFactors Employee Central with the internal ecosystem of Microsoft is one way to deliver greater business value.
"Enabling business insights is a key driver of digital transformation," he said.
Others tap SAP HCM tools
More than 1,350 leading companies, including Microsoft and Ernst & Young, have selected SAP SuccessFactors Employee Central, a cloud-based core HR system that goes beyond automation to help businesses manage global workforces more efficiently, SAP said.
In addition to Microsoft, SAP also released a list of seven companies it said chose SuccessFactors HCM tools during the third quarter, such as Ernst & Young, Cintas Corp., SIX Group and CPFL Energia.
"HR today has become overly complex, especially for large global enterprises contending with hundreds of legal and regulatory jurisdictions," Mike Ettling, president of SAP SuccessFactors, said in a statement. "Microsoft recognizes that transformation requires simplifying that environment, but just as importantly, as a global technology innovator, it also realizes the importance of providing its people with cloud-based solutions that are cool and easy to use. We're proud to partner in supporting Microsoft's continuing journey."
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