Tag Archives: blue sky

Stack ranking, one of the worst ways to approach an already flawed idea

There’s a pattern here, Vijay posts up something on HR and I feel compelled to reply but end up writing far more opinionated rubbish than I should…

http://andvijaysays.com/2013/11/26/stack-ranking-it-doesnt-have-to-be-evil/

Nice post Vijay! But I will disagree.

Comparative employee rating (also known as stack ranking, vitality curves, rank and yank…) does not IMNSHO lead to useful or helpful results. In the case where enough employees are available to make bell curves a statistical likelihood (which I think would mean a huge number of employees and a huge variation in management and employee prowess which would most likely indicate a failed recruitment process, rather than a diverse company) then the likelihood that it would be possible to accurately compare one employee with another is very limited, Stack ranking only (doesn’t) works when it is possible to compare the employees. Which means the employees likely know each other, which means it’s probably in their own interests to screw each other’s performance. Check out the well publicised story at Microsoft – http://www.vanityfair.com/business/2012/08/microsoft-lost-mojo-steve-ballmer – under heading “The Bell Curve”.

“If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, two people were going to get a great review, seven were going to get mediocre reviews, and one was going to get a terrible review,” said a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.”

As I have previously mentioned I think the whole idea of performance reviews and ratings does nothing to help the employees, rather it just helps identify where good and bad management is occurring in the organisation. When we start linking review scores to payment, it gets even worse. Why? Because employees then start linking (even more strongly than they do already) their salary with their perceived self worth. Then when for whatever reason a large pay increase is not possible, the employee values themselves less. In the worst cases of this I have come across organisations where the employee contracts state that a performance review rating of 5 equates to n% of salary bonus payment, whilst a 4 is slightly less, and so on. The organisations have fixed salary/bonus budgets, so in order to pay out, they adjust the employees’ performance rating down (very rarely up!) so that the budget is met. Excellent employees are told that they are just “good” because there isn’t the budget to pay them if we tell them that they really are excellent.

I believe that there is a place for strongly objective reviews of employees, it’s the dark side of performance management. It’s that work that you need to do to be able to fire a disruptive or underperforming employee without having your arse hauled through the courts for unfair dismissal. Probably not an issue in the US I hear, but certainly a consideration in countries where the law is a little more friendly to employees. However, to drag all employees through a similar procedure when you don’t intend to fire them in the end, is not ideal methinks.

crystal ball

 

Peering into the future, short and longer term

Given my thoughts (and of course I haven’t a lot to back that up) that the only real positive value of current performance reviews is to evaluate the effectiveness of the management teams, I suggest that we remove the soul crunching and mainly pointless reviews and replace them with alternative ways of checking manager effectiveness. Google appears to have been doing a good job of this with its Project Oxygen and 360 reviews of managers – read the excellent HBR article http://hbr.org/2013/12/how-google-sold-its-engineers-on-management an excerpt which quotes one of the Google manager which illustrates the value of the program is below:

“I was surprised that one person on my team didn’t think I had regularly scheduled one-on-one meetings. I saw this person every day, but the survey helped me realize that just seeing this person was different from having regularly scheduled individual meetings. My team also wanted me to spend more time sharing my vision. Personally, I have always been inspired by Eric [Schmidt], Larry, and Sergey; I thought my team was also getting a sense of the company’s vision from them. But this survey gave my team the opportunity to explain that they wanted me to interpret the higher-level vision for them. So I started listening to the company’s earnings call with a different ear. I didn’t just come back to my team with what was said; I also shared what it meant for them.”

This approach appears to be working at Google. Perhaps too well! A Google full of managers rather than leaders would be almost as bad a place to work as Yahoo for me. However, the concept of 360 reviews providing actionable areas for improvement, I think, is something that isn’t quite so blue sky. This is an idea we’d be better off implementing right now. I think there is a clear difference between “management” telling you that you could do better in areas compared to the team that you manage telling you that you could improve.

Looking to the longer term, I think it will not be far off where we can use data that we would not have considered analysing previously (social network graphs, semantic and sentiment analysis of work communication, external to enterprise group and social sentiment, etc.) to give us hints as to whether employees are more or less productive, motivated, stretched, likely to leave, etc. What is more, predictive analytics will improve in the HR space (hello HANA and comparing huge sets of data across multiple organisations available due to SaaS set up of the HR tools and therefore comparable data sets). We should start to be able to get that data and the predictions about how an employee is going to act in time to do some real time/preventive management (hopefully). This is going to be far more valuable than the formalised soul destroying performance appraisal process happening once every n months.

I’d go as far as to suggest formal reviews only exist because we have this feeling that we need to have something “objective” to use to manage our people. However, in reality the best/happiest/most productive workplaces are going to be those where the subjective views of the employees are that they are being well and fairly treated. I think we can do an awful lot more in our workplace to help our employees be happy and productive. And most of that improvement isn’t going to come from paying our employees more or telling them where on a scale of 1 to 5 they scored this year. Perhaps we like to think that an objective review feeds a subject view, I don’t think it does (or if it does, it’s rarely going to be positive.)

Edit – to try to clarify a few points here I wrote yet another post  To rank or not to rank, ‘cos that won’t work in the real world will it?

 

Organisational Charts, is there a better way forward?

What does your company’s organisational chart look like?

a) the Eiffel Tower,

b) a bowl of spaghetti?

SuccessFactors Professional Edition – a thought provoking trial

I’ve been trying out the SuccessFactors Professional Edition (SMB market) software recently (and no, this is not a review of it, that’s coming later (maybe).) It gave me a moment’s pause to think. Does the organisational structure at my company actually resemble a tree (an upside down one I guess) at all? The SuccessFactors software has a great organisational structure visualisation tool (far nicer than the Nakisa one IMNSHO), but it’s all about visualising a traditional hierarchical organisational structure.

Different types of structures

At the same time I was thinking about this, I happened to read the supposed “Valve Handbook for New Employees“. On page 4 (I’ve included the link, if you haven’t read it, I can recommend it, fascinating stuff and far more than just the bit I’m talking about here) it describes the structure of the organisation.

valve_org_chart

It makes a point:

 “Hierarchy is great for maintaining predictability and repeatability. It simplifies planning and makes it easier to control a large group of people from the top down, which is why military organizations rely on it so heavily.”

Like Valve, I don’t see the organisation that I work for being particularly militaristic. I grew up as an “army brat” and therefore have a very healthy (in my eyes) disregard for any kind of imposed authority. Someone telling me that I must do something in a certain way, is almost a guarantee that I’ll try to find a different way of doing it. I try to treat the people I work with like I would like to be treated. Telling someone to do something is pointless, explaining to them why they should do something – that’s more like it.

I’ll digress from my main point here for a little bit, because a random memory has just sparked, and it’s sort of relevant. When I was a new grad starting out in the big wide world of SAP HR consulting all those years ago, my boss at the time hauled me out of the clients where I was shadowing and learning, and into the office. For one week I helped the office admin team file expense reports, collate time sheets and put together invoices After that, although I may never have been the best at getting my expenses in on time, when they did get in, they were very clearly and neatly arranged. Why? because I had learnt that doing so was a simple task for me, but made the life of the admin person so much easier. Because someone had taken the time to show me why I should do something in a certain manner, I was very happy to do it.

Hierarchy and innovation, not great mates

In their employee handbook Valve go on to say:

“But when you’re an entertainment company that’s spent the last decade going out of its way to recruit the most intelligent, innovative, talented people on Earth, telling them to sit at a desk and do what they’re told obliterates 99 percent of their value. We want innovators, and that means maintaining an environment where they’ll flourish.”

I’ll put my hand up right now and admit that Discovery is not an entertainment company, despite it sometimes being very entertaining to work here, yet I’ll completely agree with the sentiment of it being an absolute innovation killer to tell people exactly what they must and must not do. To me to provide the sort of environment that people are going to thrive in means everyone having a say and everyone moving forward.

Such a dynamic (yes my description and substitute whatever smanky term you want to use instead) way of doing things cannot, I believe, have a non-dynamic organisational backbone.

So let me try to put that on paper for you

I tried to draw a simple map of the relationships between a few of the employees in our company (disclaimer, I didn’t stop to think too long about who is linked to who very hard here, so if you’re on this chart and I didn’t link you correctly, sorry, it isn’t a real org chart because there wasn’t a whiteboard involved.)

org+structure

when I tried to add just one more employee (Karsten) it just got far too messy:

org+structure2

My point is, that as a small company, we just don’t fit into the traditional hierarchical organisational structure. And to follow on from the point made by Valve, I don’t think it is in the best interests of our organisation or staff that we do.

Scientific interlude to counter excess HR fluffiness

Another digression (sorry) even evolution (Darwin’s tree of life) isn’t consider a tree these days, it has been recognised that due to the transfer of genetic information from and through viruses and bacteria there is an awful lot of our genome that doesn’t come from our direct ancestors, but from other species. It’s called horizontal gene transfer (HGT) and has been found to play a major role in forming species. To use this analogously, I should suggest that who you are working with, who influences you and who you influence are more important to who you are than the person that you supposedly report to.

Back to HR (or HCM, or whatever…)

Now I don’t think that either Discovery or Valve (or Dawin’s web(?) of life)  are unique in this. I think the days of the hierarchy are numbered, and what is more, we are inventing and deploying the tools right now that will be its undoing.

Tooling up for the revolution

Enterprise social networking, whether using tools like Jam, Streamwork, Yammer, Google+ (we use this a LOT internally, it’s free, simple and powerful!) or even going more external with tools like Twitter, LinkedIn, and, so help you, Facebook is clearly in vogue. It should be a simple matter to leverage these tools (along with email ) to find out who is talking to who. From this we would have a clearer picture of who is talking to who, how often and in what formats. We could use this data to help us consult the right people. We already do this in many ways, but imagine having a system that could help us. In the same sort of way that GMail prompts you to include certain people in an email based on your past emails but that would also check the content of your message (I know this sound horrendous to some of you, but I’m just imagining stuff here, not planning for an actual solution, bear with me). The possibilities of how we could capture and utilise the connections between our employees to add value to the business are only just starting to be explored.

I’d push the analogy that I’m trying to make so far as to say that communities of interest are the new org units of enterprise. Although you might not send a leave request to be approved by your local ketchup appreciation group (I used to read the USENET alt.ketchup group at uni for a laugh, how the world has changed! I can’t even find a link to it now.) You are more likely to check that your vacation isn’t going to leave the project teams you are working with in the lurch, rather than checking with the team with whom you are theoretically assigned but haven’t worked with for the last 6 months.

When it comes to handling career goal planning, I think that we need to be encouraging everyone to be part of the process.  (I happen to agree with Prof. Culbert about the usefulness of performance reviews, but strongly believe that goal setting is a great way to understand how to get to the next level, in a positive way.) 360 type reviews (where we reference and review with the people we are working with, rather than an arbitary “manager”) of the goals that we are setting allow ourselves allows us to help ourselves and our teams understand where are heading,  without the soul-sucking negativity associated with most performance reviews. For such a distributed process, there is no benefit to a rigid structure where person A conducts the review for person B, C and D. Again I see great potential in the use of social communication tools to share and organise and optimise these processes.

Full circle

So back to my original musing, what does my organisation look like? I don’t think I know yet, but I think it’s going to be fluid. If I want to be part of a successful innovative company (and who doesn’t) I think it need to be able to change shape depending on how and why I’m looking. And my view of the organisation should be able to change that shape without me needing spend days of constant restructuring.

And to finally relate that to something SAP

Returning to my thoughts about the SuccessFactors Professional Edition product and its use of strict hierarchical structures. I don’t think that these do fit with how many SMB companies are choosing to operate today. Yet, I can see how a SaaS solution that is planning to integrate “social” into everything they do (one of the strong messages from SuccessConnect) will possibly get me there a lot quicker than an onPremise solution will. I hope that by posting this up people will read this and start to think about how we can start to leverage the tooling that SAP is providing to be more creative, dynamic and successful. SuccessFactors people, you have a real opportunity to create something in this space, please let’s build something awesome.

As per always, these are my own personal views, and do not necessarily represent those of the company I work for. I purposely take a line which is at times controversial and contrary to many people’s beliefs. I don’t think I’m correct, it’s just that no-one has convinced me otherwise yet. This blog was originally published at http://scn.sap.com/community/erp/hcm/blog/2012/07/09/my-organisation-looks-like but I thought it really ought to be here too. Partly inspired by Vijay’s blog about talent being unmanageable, and my thoughts on what does that mean about talent being managers. What I’d want to point out is that I see a future coming where out HRIS system may mean the end of people managers as we know then – thus solving the conundrum of how do we manage talent and/or should talent be managers.

 

 

References: in a list to make life easier for you


Valve Handbook for New Employees

http://www.successfactors.com/small-business/professional-edition/overview/

http://www.scribd.com/doc/90526695/Valve-Handbook-for-New-Employees

http://www.quora.com/Social-Media/What-is-a-Smanker (my own adaption)

http://www.newscientist.com/article/mg20126921.600-why-darwin-was-wrong-about-the-tree-of-life.html?full=true

http://www.newscientist.com/article/mg20126923.000-editorial-uprooting-darwins-tree.html

http://mashable.com/2012/06/24/social-media-workplace-study/,

http://apcmag.com/why-social-media-in-the-workplace-is-not-the-enemy-business-benefits-of-staff-usage-.htm

http://byresearch.wordpress.com/

http://gmailblog.blogspot.com.au/2011/04/dont-forget-bob-and-got-wrong-bob.html

http://english.stackexchange.com/questions/1269/is-it-bear-or-bare-with-me

http://en.wikipedia.org/wiki/Community_of_interest

http://www.nytimes.com/2011/03/02/opinion/02culbert.html?_r=1

 

Who is this real ME?

This post is a response to the thought provoking post that Raj Sundarason posted on SCN – Identifying the Real Value of ME

In that post Raj talks about how:

“We need to embrace the concept of the “IDENTITY of ME.

Step 1: We need to recognize the different elements of My Identity (ME)

Step 2:  To scale and be successful we must find a way to tap into the value of ME

Step 3:  The Complete ME requires an integrated enabling infrastructure”

That grab of the bullet points of his post does not do it justice – go and read it yourself! But it will work as a nice framework for my response.

Recognising the social or not ME

I would suggest that the layers that make up an individual are very varied. In the same way that we see ridiculous personality profiling:

personality graph1

We can generate similar breakdowns on the factors of their identity:

personality graph2

 

You should note that these graphs were generated using random numbers in a spreadsheet, and mean absolutely nothing! But I bet you could recognise some people you knew looking at the data there if you looked. And here is where we have to be very, very careful. We take into any discussion about what makes up identity some very strong views of what defines identity is that are heavily influenced by the people that we surround ourselves with. A person who spends much of their time online (like myself) will naturally be more inclined to think about the online social interactions that take place. A person who is never online (yes, there are a few of those left) is more likely to think about person to person interaction. Even what makes up an identity is very much up for debate, is your community credibility part of your identity? (probably) or is it a result of the social and professional contributions? (probably). Whilst the 5 big personality traits are pretty well agreed (although putting them in a radar graph is a complete abuse) the points that make up an employee’s identity aren’t quite so well understood (as far as I know. There are probably hundreds of PhDs in sociology which discuss that and they probably even have some sort or acronym that is universally accepted to represent the different factors… But I don’t know about it so we’ll just assume that it doesn’t exist for the sake of a good story 😉 )

So to my point here. When we consider leveraging the power of an employee’s identity we need to consider that for different people this will need to be achieved in different ways. Whilst I think and agree that in many situations the general result is the same, if a strategy only addresses one aspect of an employee’s identity then the end result will vary wildly in the same way that identities are made up in wildly different ways.

Getting to the value of identity

So how do we actually use identity to give our business value? Well firstly I think we need to consider what we would loose if we do not recognise the value that an employee brings that is above and beyond their mandated position description. Perhaps this is what people talk about when they blather on about “cloud DNA” and how worried they are that Lars is leaving SAP. Personally I think that’s tummy-rot and one person will rarely have such an impact, no matter how strong their identity. But it does give a nice example of how we need to value and assign value to our employees by thinking about their identity in the wider sense.

So the next question must be, if we can see value in identity, how can we grow that value? To answer that question with another, does all identity growth equal value? Certainly in some areas, but not in others. If your employee is a passionate political advocate, they may well be growing their identity but also at some point you may find that the passion/identity conflicts with your business growth. I’ll use myself as an example. I’m quite passionate about environmental issues, I fear for the legacy we are leaving our children in the way that our planet is being abused. It’s quite possible that this will conflict with potential work that my company might partake in.

Identity has value, but it also has risks, leveraging one and recognising the other will take skill. Which brings me nicely to the final point.

Integrated analysis environment

I agree with Raj that by figuring out which parts of an employee’s identity can be leveraged towards business growth a company has the opportunity to create great wins. An employee who feels that their whole identity is supported by the company is going to be far more loyal and likely to produce results/recommendations/inspire others than one who feels that their company just doesn’t understand them.

To this point companies will need to be very careful in attempting to leverage the identities of their employees. Again I will use myself as an example: If my company asked me to start tweeting references to a new solution that we were marketing I would be very resentful. Why? Just read my thoughts on anti-social social media. I would move camp very quickly from feeling that my company was supporting me and was aware of what I was doing that was helpful to a view of “you just don’t understand!”

It’s like the return to work legislation here in Australia, you don’t encourage your employees to return to work, you support them. In the RTW situation it’s due to legal nuances that can stop you getting fined millions of dollars, but in general terms if you can support your employees to leverage their identity for your business cause, rather than putting any pressure (intended or not) then you’re on a winner. Supported employees are less likely to feel that you misunderstand them and more likely to join in (even if it’s not something they would have done without the support.)

But before you can offer support, you’d better understand where your people are and what they do and what makes up that diverse mix of identity in your population of employees. Thus the need for, rather than infrastructure to enable, infrastructure to analyse. Helping your people to be great online bloggers for your company makes no sense if your people aren’t interested in being near a computer once they leave the office. Likewise, targeting your employees to help recruitment at the next trade conference they attend is pointless if they will be avoiding any social contact whilst they are there.

In the race to use the connectedness and influence of our employees towards the good of the company, the first companies that are able to effectively analyse where their employees are at will have a huge advantage. I agree with Raj that we must also measure the effectiveness and dollar returns of the methods and processes that are put in place to leverage the identities, but this is pointless without understanding the base that we are manipulating  supporting.

To the end of analysing the identity make up of your employees, we are entering a phase where social network analysis is a real possibility within a company. Whether this analysis is through scanning email conversations for semantic meaning and the senders, recipients and cc’s used as nodes in an influence map. Or it’s through direct analysis of outside-of-enterprise relations with employees encouraged supported to upload their contact lists into gamified social referal solutions. The challenges with privacy will be the first obvious hurdle, but if Facebook has over a billion users then there are at least a few people who don’t care that much… Look out for the social media disclosure statement in your next employment contract, and I’ll bet your employer will be doing a lot more with your details than just monitoring your Klout score!

Summary to a long winded ramble that could have been composed in a pub on a Friday evening (but wasn’t)

Raj, I hope I added some value/response to your post! In summary, yes I agree, leverage the identities of your employees to a) build a better workplace for them and b) return better result for your company. And yes, I think that companies that will be able to do this will have a huge advantage. But I think the first and more important step is to start understanding who your people are outside of their current work personas. Understand the identities that you actually have, and once you have that information you will be in a better place to start thinking about how or even if you can use that information.

 

 

Oh and time management

Can’t believe I forgot…

I completely forgot something in my BS post yesterday!

SuccessFactors cloud based time entry and time management

As I told the SuccessFactors team when I met with them in Las Vegas last year, “So when are you announcing the purchase of a time entry suite?”.

To me it’s seems crazy that SuccessFactors cloud payroll still relies on third party time entry and evaluation software. The cloud payroll solution (as it is SAP Payroll) is more than capable of doing time evaluation, it’s just that there isn’t any way of getting the time data into the solution (short of custom builds mimicking a CATS data entry ALE.)

So my prediction: SAP or someone else will, before the end of the year (2013) build out a simple time sheet entry and approval process that connects to the SAP cloud payroll system to allow time entries to be processed within the cloud based SAP payroll engine. My guess is that Employee Central will be extended to store this information as part of the solution to allow for reporting on it.

In the first iteration the solution will not be tightly integrated to Employee Central. By mid 2014 I’d guess that administrator and employee entry screens will be part of EC with a set of mobile applications (provided free of charge) to enable time data entry and approval. The final icing on the cake will be an iFlow which takes that information back into any onPremise or Cloud Finance system for use in billing/project costing and whatever else you might want to use CATS data for.

Please note, that although I have chatted to the SuccessFactors teams about these dreams of mine, I’ve not been given any official feedback that they might or might not be a reality! So these are still safely in the realms of predictions that I’m going to be totally wrong about!

I wonder which prediction I’ll be proved wrong about first!

 

 

blue sky

Blue sky thinking

The other day I was chatting with someone in 140 character snippets about some of my thoughts on the things that may come to pass. I’d also alluded to my thoughts in much the same space at the “cloud” panel at the SAP Inside Track day at Melbourne (kindly hosted by the nice folks running the Mastering SAP Technologies conference.)

So I thought that rather than just let those words vanish into the air, I’d instead write them down so that sometime in the future someone would have the possibility to point out how wrong I was with absolute certainty.

SaaS solutions and enhancement

I am a strong believer that companies have, and will continue to have a need to build system based processes that are different from company to company. The idea that they will all adopt the same solution because it is “best practice” and the cheapest to use and manage is, to me, very unlikely. Companies will continue to change, vary and improve those processes that they believe bring special value to their business. In many businesses (but certainly not all) I believe that the area that they will need to innovate on is “people”. As repeated by Mark Souter at the recent Mastering SAP HR & Payroll conference and potentially originally by Eddie Barrett from Deloitte (I can’t find any earlier references than 2008!) “The war for talent is over, talent won.” Companies that don’t innovate above and beyond the offerings that SaaS providers give them will lose a competitive edge.

Right now, I’d say that adopting a “vanilla” SaaS HR product (especially one that is currently rated as “market leader” – if you haven’t seen the tweets or don’t get the references then the SuccessFactors team not been doing its job properly 😉 ) would probably give most companies an edge over their competitors, but this will not endure long term.

The thing that has made SAP so well loved by enterprise, has been its ability to allow for enhancement to the vanilla “best of breed” model. Now we all know of cases where the addition to the vanilla was more cod-liver oil than raspberry jam flavoured and the resulting mess has been a support nightmare, but this is not always the case.

Cloud SaaS solutions will naturally evolve (as they aim to replace the on premise models that we have been so used to using and enhancing) such that we will be able to write our own business logic into them. In many cases this will be more configuration than code. And I’m sure that we will see much more care taken with the underlying core of the solution so that it can’t be broken as badly as many on premise solutions have. (After all, one hopes that we’ve learnt something from all these years of wasted effort.) But unless the cloud solutions offered by SAP allow for enhancement, then someone else will build cloud solutions that can be enhanced (natively) and SAP will be either forced to purchase them or lose the enterprise market.

I see SAP HANA Cloud PaaS as the first real step on this journey of SAP SaaS enhancement. I’m fully onboard this train, and I see it accelerating pretty darn quickly.

Running a hosted legacy enterprise solution and offering it as “cloud” is pandering to the uneducated or at best a stop-gap solution.

Ok so this isn’t so much a prediction as a rant. I think any software vendor that offers both a standalone on-premise install of software and a cloud version that are identical in function do not have true cloud software on their hands. The agility of cloud based software should be in its ability to scale, be elastic and to take advantage of the capability to spike to big resources to do amazing things. That sort of agility can’t be used by software that must work within defined hardware limits. If the software is supposed to function equally well in both scenarios, it clearly hasn’t been built to take advantage of the cloud (and never will be able to!)

Current batch process based time and payroll processing is an anachronism and will be replaced.

If SAP aren’t busy building a HANA based payroll with a skunkworks team somewhere, someone else ought to. (If anyone reading this wants me to help form such a team…) With the power of HANA to close to instantly calculate the impacts of any change in circumstances of an employee and resolve their payments for the next n-years, there should be no need for a “pay-run”. Pay would already have been run! Payroll processing would instead be a consolidation/audit process where data entry was checked and variations explained (part of current processing) but the bit where the system was offline for hours to enable the processing would no longer be required. No-SQL has offered this tantalising possibility several years earlier, but the idea of having an eventually consistent payroll by using a map-reduce type approach would have been enough to make most auditors suffer cardiac arrest (much as both ideas might be appealing, you can see why this hasn’t been adopted.) With HANA offering a fully consistent SQL model and the possibility of near real-time evaluation of results there is a new option. Add into this mix the ability to scale up to a cloud sized resources with the ability to elastically scale as demand requires and the possibilities start adding up. Imaging being able to model people movements in your enterprise and have the exact dollar amounts that this would mean. Rostering optimisation would become much less of an art and much more of science.  The space that SAP ceded to third party time management and rostering solutions (such as workbrain) would be ripe for competition, if the payroll and time management functions that currently are batch based became either on-change calculated or close to real-time available.

SAP’s current payroll system is “world-class” I don’t think anything else can do payroll in so many countries. (At least this is what I’ve been told and I haven’t seen convincing arguments otherwise.) But it is based on an architecture that was designed for systems that had less computing power than the desktop computer that I’m writing this blog on (sorry not using my tablet today 😉  ). If SAP want to retain their world class ranking then they need to innovate and rebuild. I’m pretty sure that there is a little team at the very least throwing ideas around on how to achieve that. I predict that by 2017 we will see a HANA based cloud payroll and time management solution(whether built by SAP or a partner, I’m not sure) that will put the current SAP on premise based solutions to shame.

Cloud ERP – same, same but different.

With the possibility to “enhance” the cloud, will come the wider desire for ERPs to be fully cloud based. It doesn’t make sense for any organisation to have to worry about IT infrastructure when cloud offerings are available. I’m just waiting for an analytics firm to write some software which figures out which organisations are still using their own email servers and then starts discounting their share values due to their inherent technical stagnation. (Am I being too harsh here? I’m not sure.) I predict that a HANA based cloud ERP solution will be available for SAP customers by 2020 which will have more functionality than the on-premise solution. In the run up to this, each LOB solution will have a SAP HANA cloud based solution built or purchased and adapted that offers as much functionality as the current on premise model. The work will be in the integration of all the LOB cloud solutions so that they can work as a cohesive ERP.

It is on the work towards a cohesive solution where I believe that SAP spent worthwhile money on SuccessFactors. The SuccessFactors BizX suite including SAP Jam and Employee Central aren’t in anyway built in a homogeneous manner by the same team using the same data model. Rather they are a collection of heterogeneous best-of-breed solutions sewn together to make an even better whole. It is the experience and ability of the SuccessFactors team to take heterogeneous solutions and make them appear as a homogeneous whole to a user that is valuable. (You could argue that they could do a better job, but like Einstein famously said, kissing and driving fast cars at the same time ain’t that easy. As far as I’m concerned it’s a lot nicer than other stuff I’ve had to work with recently.)

Now, I’ve heard some fairly vocal people argue that having a good object based data model that allows for easy cross-component use is essential for any to-be successful SaaS solution. I disagree. It’s how it works for the end user that counts. And the thing is, no matter how beautifully you design your solution, there is always going to be someone that build a little part of it better. If you can’t purchase/partner with that amazing start-up and bring them into your system, well, someone else will. A couple of amazing start-ups later and the most amazing system (from the end user point of view, which is the only one that counts) isn’t the beautifully designed one, it’s the one that can bring all the best bits together, no matter who built them or how they built them or what data model they used.

Blue Sky thinking – starts with BS.

I may be completely wrong with my thoughts. I’ve never considered myself to be a futurist – sounds far too wanky for me. So I’m certainly not very scientific about how I’ve formulated these ideas. But I do think we are on the point where the enterprise software market is turning. And it’s turning towards the cloud.

Or these thoughts could be just a load of wishful BS.