I've always believed that SaaS players with a platform for app extensibility have a big advantage. If that extensibility leads to a frictionless way to try and buy via apps stores, that advantage increases. SAP's approach to SaaS app extensibility is the HANA Cloud Platform.
SuccessFactors is an intriguing use case for HCP. To date, there has been more partner involvement on extending SuccessFactors on the HCP than any other SAP SaaS solution.
I've never been convinced that SAP is all-in on the HCP, though momentum has increased. I posed the HCP question as one of my eight questions heading into SuccessConnect. In Las Vegas, I got some answers, some of which genuinely surprised me.
Though HCP got little or no mention from the SuccessConnect keynote stage, Mike Ettling, President: HR Line of Business at SAP, later told me that HCP was key to one of SuccessFactors' five differentatiors (extensibility).
Two of SuccessFactors' most active partners on HCP are at the opposite end of the spectrum: Accenture and Enterprise Jungle. I attended an Accenture presentation on HCP, and I also taped an on-site podcast on HCP with James Sinclair, the brains/mad scientist/global entrepreneur behind Enterprise Jungle.
HCP as enabler - an "aha" moment for customers
Sinclair and I have had prior run-ins. Den and I did a video with Sinclair when Enterprise Jungle was part of the HANA Startup Program. In collaboration with Chris Paine of Discovery Consulting in Australia, Sinclair built a SuccessFactors extension, an HCP app called, appropriately enough, EnterpriseJungle for SuccessFactors, a content search and discovery app which includes an optional Jam (SAP collaboration) integration.
But Sinclair didn't stop there. In fact, he made a notable change in strategy, shifting from building apps from scratch to impressing/shocking customers with purpose-built prototypes - often done with incredibly quick turnaround (that's where the shock comes in). That story has big implications for how some SuccessFactors partners are using HCP to win business.
Sinclair basically bet his career on the HANA Cloud Platform. He's spent the last 18 months globetrotting to customer sites and SAP offices. So I asked him why:
The [HCP] is why we joined uh the SAP ecosystem. That's the market opportunity we saw, these last mile white space solutions on SAP cloud products. While we're focusing on SuccessFactors, the view was always, "Wow, if you can extend all of SAP's cloud portfolio using HCP, you can build once and distribute on multiple platforms, and you can scale under a Sass model." HCP is delivering a very simple and easy way to deliver these last mile applications to customers at scale.
I asked Sinclair about his shift in strategy. These days, his HCP apps typically start by teaming up with an SAP salesperson, and delivering an HCP prototype based on customer specs, and doing it in a matter of days:
When we started on this journey, we were really trying to build an application that used the whole scope of the SAP suite... But then, we stepped back, and said, "What can we do to deliver to customers very simple requirements that they're looking for?" What are the workflows that you need? Maybe you've got 75 unique back office applications, and you are scared to move to Success Factors because you don't know what you're going to do with those things/
Sinclair says that customers are blown away by his team's ability to turn their requirement into a prototype in a matter of days. He makes the point that you don't have to talk about HCP or get into the tech weeds - it's all about functional needs. You build the app they want, and HCP is just the background enabler:
For the customers, this totally resonates and they totally get it. From an HCP platform view, suddenly it becomes a very simple conversation, and HCP becomes an enablement platform.
I asked Sinclair for an example of a quick turnaround app:
The most recent one that came in was conflict of interest management. A company in Singapore wanted to be able to manage the annual requirement that all employees have to fill out in their twenty question form, but also have an ability to file an ad hoc conflict of interest statement. They couldn't do that within Success Factors; they were currently using Excel and Word.
But the reality is Success Factors is the perfect place for that to be. With employee data, you can auto-complete everything. You can attach the completed form to to the employee profile. You can create a framework for administration of it.
Sinclair's team had the prototype ready in four days. In his Sinclairian style, he calls this an "oh shit" moment - not just for the customer, but for the SAP salesperson who sees this advantage firsthand:
That's really important when suddenly the customer and the sales rep say, "I get it. I get extensibility." Forget the technical aspects, it's about the enablement. It's about the outcome, and what it lets me do.
Every SAP salesperson Sinclair has worked with has walked away with a new way to position:
These apps link to your third party applications, they link to your home screens; they're available on mobile. There really is no other platform on the marketplace that can compete with Success Factors when it comes to that.
For partners, it's a chance to build a portfolio of re-usable apps:
Extensibility is not only a core differentiator, it's a core opportunity, because all of these apps are going to have markets for more than one customer.
HCP go-to-market questions - Mike Ettling responds
But that leads to the burning question: if the HCP is such an advantage, why weren't there twenty James Sinclairs at SuccessConnect? Why aren't there hundreds of apps? Where are the other Enterprise Jungles?
These are crucial questions, but in fairness to SAP, I missed something. There is more activity from partners on HCP than I assumed. But a large chunk of that activity is similar to what Sinclair describes: building last mile custom apps for customers, often as part of the sales process.
More SuccessFactors partners than I realized are using HCP to win business with custom apps. But when you extend that question to building hundreds of online apps, and why there aren't twenty other Enterprise Jungles pitching these apps, the issues get trickier.
I asked Ettling this question directly. He made the exact same distinction. Using HCP for last mile custom apps is the part that's going well:
I'm probably Steve Lucas' biggest HCP fan at SAP, because we use it in every sale. It's kind of ingrained in our people. There's two components to HCP. There's the app/storefront piece, but there's also the piece where you're kind of replacing some of the PeopleSoft apps which are client specific.
The biggest builder of HR HCP apps is Accenture and the other implementors, because their using that whole philosophy I mapped out of what do you do standard, what do you change manage, what do you do in MDF? Then you got these things left over, which are custom apps or customer-specific apps. We'll build that for you in HCP. Those are client-specific.
For these custom apps, Ettling echoed the speed to market Sinclair described:
It's exactly what you say; these things get thrown together in three days. Accenture loves it because they charge for the IP. They price it like software. They don't price it based on the days it takes to build, so they're making fantastic margins on this stuff.
But when it comes to improving the ease of go-to-market for aspiring partners, and resolving the online store and pricing issues, Ettling acknowledged there is work ahead:
I totally agree with you on the apps side of it. The whole go-to-market around that is clunky. My specialist account executives, once they've told the story about how HCP differentiates us, there's no motivation for them to sell any apps. Accenture will have to come in, or Enterprise Jungle will have to come in to sell it. So we're looking at that, in terms of how do we build the right go-to-market and actually get the AE's comfortable that they can just add some apps onto the deal and sell it that way. That's an area which needs work.
I was wrong to judge SuccessFactors' commitment to the HANA Cloud Platform based on keynote emphasis or a robust apps store presence. There is a lot more going on with HCP in the SuccessFactors space than a couple of upstart partners building cool apps.
Some might object to my critique of apps stores as a criteria, given that most enterprise software is still purchased the old fashioned way, through account executives. But Sinclair has told me that hundreds of prospects do visit his app store pages, and as a lead gen tool and a "try before you buy" demo platform, apps stores can play a crucial role.
That's why I'm baffled by SAP continuing to allow a proliferation of apps storefronts, years after SAP told us that they were consolidating and modernizing their apps store presence. Sinclair is on four different SAP apps stores. Store.SAP.com and SAPstore.com actually lead to two different apps stores - a big source of confusion for customers in the Accenture HCP session I attended (which was a co-presentation with SuccessFactors customer and HCP user Timken). During the session, I was unable to locate the app Accenture demoed, but I was probably in the wrong store.
In the years since SAP told us they were consolidating apps stores, they've built and opened new ones. Each one has different pros and cons in terms of usability, search and navigation. I'm befuddled by what SAP is up to here, and haven't had time to find out why these problems persist. There is probably a master plan here, so I'll try to learn what it is and get back with timeframes on simplification. I will say that I really like that HANA Cloud Platform store (SAP HANA App Center).
SAP is getting results with HCP despite these problems. But as Ettling noted, solving the go-to-market issues for partners and SAP account executives is vitally important. It's not easy for third party partners to get on company vendor lists during a time crunched sale. It's far better to find a way to sell these HCP apps via SAP's own salespeople as a package to customers, and make sure the salespeople and partners get their pass through commissions/royalties.
That's a solvable problem and it sounds like SAP is on top of it. As for not emphasizing HCP in the SuccessConnect keynotes, I get the limitations of time and bandwidth. But I had a couple SAP folks tell me "this isn't a technical audience." Well, that didn't stop Steve Lucas from pushing HCP at Sapphire Now.
We're back to Sinclair's point about HCP-as-enabler. It isn't about the guts of the platform, it's about the outcome. And so far, the outcomes are promising. Show customers those outcomes on the keynote stage in the form of kickass apps your competitors don't have, speed adoption, win. Will SAP double down? Will I meet ten more James Sinclairs at next year's SuccessConnect? Time will tell. But for now, I can at least mark one question off my "eight questions" list.
End note: for more SuccessConnect coverage, also check out my use case, How Edgewell Personal Care conquered data and skills issues on their SuccessFactors go-live. For more on building on the HCP, check out my extended video on HCP with Luke Marson and Chris Paine. Later this week, I'll file a piece that revisits my eight questions posed before the show. There are two versions of my podcast with James Sinclair: a shorter ten minute version, and a much longer, unfiltered director's cut. I've also issued a SuccessConnect event review podcast with Jarret Pazahanick.
Image credits: photo of James Sinclair during our podcast taping, by Jon Reed. Photos of Mike Ettling provided by SAP.
Disclosure: SAP is a diginomica premier partner as of this writing. SAP paid the bulk of my travel expenses to attend SuccessConnect.