Five takeaways from PepsiCo on moving SAP HR to the cloud

Profile picture for user pwainewright By Phil Wainewright July 3, 2017
Five takeaways from PepsiCo's global head of HR operations in the wake of rolling out SAP SuccessFactors to 260,000 employees earlier this year

PepsiCo receives award at SuccessConnect EMEA 2017 370px
In February this year, food and beverage giant PepsiCo went live on a single global instance of EmployeeCentral to provide core HR for more than 260,000 employees. Shakti Jauhar, Senior Vice President of Global HR Operations spoke about the project at the recent SuccessConnect conference in London, where he became the first recipient of the Klaus Tschira award, established to recognize SAP customers who achieve notable innovation in HR.

PepsiCo is a $62 billion revenue enterprise operating in 80 countries, with 22 brands that each generate over $1 billion in revenue. It made the decision to move its HR systems to the cloud in 2012, when it was already midway through a project to implement an on-premise instance of SAP HR. Here are five takeaways from Jauhar's comments on stage.

1. The need to standardize

Like any large organization facing a world "full of volatility, uncertainty, complexity and ambiguity," as Jauhar puts it, PepisCo needed to get better visibility of its HR operations.

A few years ago PepsiCo had over 70 HR platforms across the globe — and you can imagine what that means. We were collecting data, we were managing that data, it was really difficult to harmonize data and make it available to the people who needed it.

This is just 70 HR platforms, I'm not even talking about all the platforms we had for performance, for learning, for every other process in HR. It was just really impossible to manage, and so in a nutshell we were having difficulties in putting that data together.

2. A tough decision to go cloud

The journey towards a single global system began in 2010, with the selection of an on-premise SAP HR and payroll solution. This was initially rolled out to 110,000 employees in the US and Canada. But it soon became clear this should not be extended to other countries, says Jauhar.

In 2012 we saw a very strong trend towards HR applications being on the cloud. We realized that if we spent, over the next two or three years, a ton of money in deploying that on-premise solution across the globe, by the time we got there, in a couple of years after that, we'd be obsolete. So we had a tough decision to make.

As you can imagine, we'd spent a lot of money on the on-premise implementation. But when we looked at the market, there was not a single platform that was really ready for prime time. So we had a choice to make. We had to balance what was good for PepsiCo in the long term and how much risk are we willing to take. There was more risk, the balance was kind of tilted, but as you can imagine I mulled over this for a long time before making that recommendation.

The decision to go with SAP SuccessFactors and its EmployeeCentral platform was finally signed off on 24th December that year. There were just hours to spare before Jauhar set off that evening on a family vacation, he recalls:

As the plane was taking off, that's when it dawned on me, 'Oh God, what about my career if this whole thing goes wrong?' But after the first drink, I forgot about that. It wasn't about me, it was about what is the right thing for the organization.

3. Leadership support is crucial

The implementation went live in February and is just coming out of the 'hypercare' phase of stabilization that SAP performs with customers after a launch. The scale of the project was such that it could only succeed with the support leadership at both companies, says Jauhar.

I want to say for the record — and this is not because I'm here at the SuccessFactors conference — this was important because this wouldn't have been possible without full support from the leadership teams at PepsiCo as well as the leadership teams at SAP and all these folks who supported this deployment across the globe for over two years.

Keep in mind this was not just EmployeeCentral, we were doing data harmonization, process harmonization, deploying call centers and back office centers while we were deploying the system.

4. Implementation is just the beginning

Now that the global system is live, the work begins to realize all the potential that now opens up, says Jauhar.

This has opened up a ton of doors for us. We will enhance our global management of talent, we will enhance our analytics capabilities, among all the other things we will do with it.

The other aspect of this is, we are now able to harness the new HR innovations that come through with all the new startups and with all the new innovation in HR. Now it is much easier to harness that.

That's where we are — there's a lot to do.

5. Be ready for change

Asked what advice he would pass on to others embarking on a similar project, Jauhar says not to underestimate how much change you're letting yourself in for.

Digital transformation is an exciting journey, but remember you have to be ready for change — constant change. It isn't a one-time thing, it's a journey.

Second, this is not about technology. The journey really is about significantly enhancing the experience of the user, and at the same time doing things differently — thinking differently. Because if you want to do exactly what you used to do before, on a cloud platform, it's not really going to work. So just fasten your seat belts.

[UPDATED to correct PepsiCo's annual revenue, which was misstated as $22 billion in the original copy].