In a first for SAP users, HRO provider NorthgateArinso offers new on-demand solution incorporating integrated talent management.
by Andy Teng
HR executives for years faced a significant dilemma when it came to incorporating the latest talent management functionality into their ERP systems. Although software giants such as SAP have rolled out greater talent management functionality as part of their overall offering, buyers have been hampered by several factors.
For one, only organizations on the latest version of an ERP release could take advantage of new talent management functionality provided by the platform vendor, which left many companies on older versions high and dry. Also, any time you serve up on-premise software, some laborious implementation effort is involved—certainly not the most desirable entanglement during these times of stretched resources. Moreover, for outsourcing practitioners, they were stuck with the system of record provided by the vendor, so if the vendor only offered an older ERP release, the BPO customer was stuck.
That’s why on-demand talent management solutions—delivered software as a service (SaaS)—has resonated so well with large enterprises. It allowed companies to quickly implement a suite of services without a lot of on-premise investment. It also ensured that buyers always ran the latest release of the software because each time a vendor upgraded, all clients were moved to the new version.
So it’s no surprise that when NorthgateArinso recently rolled out its euHReka OnDemand offering to the BPO marketplace, the company got a warm reception. This is the first SAP-based human capital management (HCM) SaaS solution available, and it offers up a new option for HR organizations in need of robust talent management integrated with their ERP system. Aimed at large, global enterprises, euHRreka OnDemand will enable organizations who find third-party talent management suites unpalatable to source a seamless solution from a BPO vendor. To some in the industry, the service could have a dramatic impact on the market.
“What’s important here is that NorthgateArinso appears to be the first HRO firm to unleash SAP’s HCM suite in a fully multi-tenant way without compromising their upgrade path or limiting SAP functionality. And they’re able to use this multi-tenant platform as a pure SaaS offering or with a range of surrounding services up to full-scale, end-to-end HR management BPO, all with the promise of much lower operating costs (once they get to scale) than are possible running SAP in its native, single-tenant mode,” explained Naomi Bloom, an industry expert with the technology consulting firm Bloom & Wallace.
With much of the industry now turning to SaaS as the preferred method of service delivery, euHReka OnDemand taps into pent-up demand, according to industry observers. On-premise ERP systems require significant internal resources to set up and operate, but the SaaS solution can be implemented quickly and seamlessly. Moreover, upgrades are handled strictly by NorthgateArinso or from any other providers who may offer the solution in the future (NorthgateArinso does not have exclusive rights to distribute the service).
Denis Tournesac, the executive vice president for on-demand services at NorthgateArinso, said he believes many of the company’s global BPO customers will eventually migrate to this service. In fact, he estimated that half will likely do so in the next two to three years, attracted to the enterprise-wide capabilities of euHReka OnDemand.
“The multinational aspect is of course key in this proposition. We come to market with a proposition that is global,” he said. “We believe more than half of BPO customers would go for it.”
He said the ideal prospects are large, global organizations with 10,000 or more employees who currently operate on an SAP platform and are in need of an integrated and robust talent management platform. He stressed that what will really appeal to HR executives is not only the integrated components within the talent management suite but also its integration with the ERP system. Because a lot of the value of the core data set around payroll and benefit is currently not being harvested and integrated with third-party talent management suites, HR is unable to exploit the full potential of that information. Tournesac added that integration also means that users can access talent management data and core HR data through a consistent interface.
Christian Baader, vice president of BPO at SAP, explained that the service will be especially attractive to companies who perceive ERP implementation as messy, costly, and protracted. By embracing a standardized model like euHRreka OnDemand, buyers can roll it out more quickly.
“A lot of pain perceived with rolling out a system like SAP is the way these systems get customized and modified in a lot of ways. The way NorthgateArinso will offer it makes it easier to roll out and get access to best practices,” he added.
According to Tournesac, the first implementation of the on-demand solution is expected to occur this summer. He added that NorthgateArinso is also in discussions with additional companies to roll out the on-demand service this year.