Ahmad Ludin

Competition for the HCM Customers

In Uncategorized on June 26, 2009 at 8:22 PM

Let’s face it;  the basis of todays economy is competition. The result of the competitive forces is better products and services in the form of value to the customer. Micheal Porter, the Harvard University professor who studies competition, defines value as
Value is the ability to meet or exceed the needs of customers, and do so efficiently.
SAP is facing alot of competition in the Human Capital Management area; more specifically in the talent management realm and in the way software is delivered to the customers. Recently, Siemens AG picked SuccessFactors for their global talent management inititive. This is the largest client for the SuccessFactors; more interesting is the fact that Siemens AG have been big SAP Shop. One wonders why Siemens did not stay with SAP and chose another vendor that deploys the softwars in the clouds as a service. I believe the answer to this is:
  1. The Software as a service (SaaS) model is more attractive to not only small but large and complex enterprises as well
  2. The best of bread web based vendors are providing a good balance of form and function,  in other words user friendliness is not sacrificed at the expense of rich and indepth functionality.
  3. Total Cost of Ownership as a value to the customer is more important than ever before and SaaS vendors are addressing this in a much better way than the traditional software players.

As Thomas Otter noted in his blog,  “no vendor likes to lose at home“, this pace of competition is a good news for HCM customers and it will be interesting to see what SAP and others will do in response.

  1. you think SAP will start adopting SaaS to enhance its competitiveness in HCM field?

  2. SAP is already in the SaaS space with their product called: SAP Business By Design. In Talent Management area is the area where SAP is coming short when compared to Taleo, SuccessFactors. The only player that provides SAP platform based Talent Management Northgate Arinso and its EuHReka on Demand product.

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