A Q&A from SAP’s conference, SuccessConnect, dives deep into how HR will navigate and succeed in the cloud.
By Debbie Bolla
“In the next three years, HR will definitely be in the cloud,” predicted Mike Ettling, president, HR line of business, for SAP, at the annual confab SuccessConnect. As the on-premise provider has moved the majority of its business to the cloud through acquisitions and technology investments, it has also seen impressive growth, with Ettling responsible for 40 percent of cloud revenue.
The tech giant is focusing on three bottom-line mantras:
- Simple to run
- Simple to us
- Simple to engage with
This can be executed through the cloud, explained Ettling, by changing processes to standards. “Customization is a swear word in the cloud,” he quipped. The future of HR technology is to bring the best functionality to solutions, making deployment and implementation as fast and as easy as possible.
Here, Ettling shares further insight into topics he touched on during the conference.
HRO TODAY: You said that HR is going to become an enabler of the business. Why and how do you see this change coming?
Ettling: Over the past few years, HR professionals have been talking about how people are the key differentiator for businesses, but we haven’t really seen that play out.
Today it has to -with the amount of digital disruption in play, who you have and who you attract does make a big difference for business.
We are also experiencing a big talent gap. It’s not on the horizon, but rather it’s here today. There are not enough people joining the workforce to fill the openings left by those exiting the workforce. In addition, young people don’t have the skills business increasingly needs today. These realities put a lot of pressure on business to attract and keep good people.
Work is changing, and China is a good example. Eyes are on its transition from a manufacturing-based economy to more of a service-based economy. This shows how different types of work require different skills. HR needs to understand this and address it. Cloud technology, in particular, is making this possible, which is why HR is leading the charge to the cloud.
HRO TODAY: Do you think HR will be accepting of standardized solutions? In the past, there has been a push for customized engagements.
Ettling: HR is accepting of standardized solutions today by leading the move to cloud. In the past, HR has been the least standardized of the lines of business. I often describe SaaS as “melting business processes” by standardizing, automating, and socially-enabling processes, and making manual processes disappear.
Consider this: How many reasons for absence does a company need? How many different processes for applying for sick leave? Fifteen percent of differences across companies are actually required by law. The rest are just habit.
The standardization that comes with cloud implementations allows HR to focus more on solving people problems for the business, and less on administrative process issues. People management then becomes more strategic and data-driven. With the cloud, the solutions are about fit gap, cultural fit, and implementation fit. The standardization that comes with cloud drives simplicity and ultimately agility.
HRO TODAY: Why do you think complexity is hindering HR teams’ success?
Ettling: Complexity is not just a matter of thinking. We recently completed a study with the Wharton School, where three quarters of respondents said that complexity hindered their ability to meet business goals. We also talked to 55 HR, IT, and finance executives at SAP’s SAPPHIRENOW conference, and not surprisingly, 96 percent are looking to run more simple processes and workflow in order to increase productivity and become more efficient. And 87 percent of them said technology is a key enabler for simplification.
From HR’s perspective, each additional layer of complication robs them of time and energy to focus on the decisions that dictate their ultimate success or failure.
HR needs to focus on simplifying talent management in order to enhance the productivity and engagement of the total workforce. Simplifying can mean enabling technology for HR to be successful with their people and ensuring that employees have the tools, information, and processes to be able to be successful themselves.
HRO TODAY: How will HR tech help organizations manage their talent on a global scale?
Ettling: One key way is total workforce management. Today, technology has the capability to give organizations a full view of talent and provide the ability to connect contingent labor with full-time employees. This gives managers a better idea of what work is being done and they actually can see where tomorrow’s full- time employees may come from.
HR technology also collapses disparate systems and processes in different countries and geographies again into one total view of the workforce, giving organizations transparency.
HRO TODAY: You said that the devil in the detail is in the change management. How can HR effectively execute change management?
Ettling: In today’s cloud, implementations are much shorter and faster. But, implementing new tools without redesigning processes and retraining HR does not solve talent problems. When it comes to adopting new technology, it’s just as important to make cultural changes in the business. This means educating layers of management before new technology is adopted, in order to enable the entire organization to utilize the technology to its full potential. Education and flexibility are key at the beginning of a new technology adoption, including clearly communicating the change throughout the organization.