Payroll Buyers Guide
Payroll Lab Payroll Blog The SAP and Oracle HCM Software Debate

Micah Fairchild Making Sense of the Great SAP/Oracle HCM Software Debate

4 stars Average rating: 4 (from 54 votes)
 By Micah Fairchild

SAP versus Oracle—Messaging versus Reality

When trying to keep pace with both SAP and Oracle HCM and payroll solutions, it can sometimes feel more like the two are engaged in a more of a political battle than a software competition. In fact, beyond the political rhetoric, there are a number of striking similarities. Two major competing parties which aren't vastly different from each other? Check. Said two parties taking up all the air in the room even though other alternatives exist (and, yes the irony isn't lost on us that with this blog post we're contributing to the banter)? Check. The two parties are in a constant battle to 'one up' the other in the public's eye? Check.

Oracle and SAP, the two largest enterprise software vendors in the HR and payroll software market seem to be locked in a perpetual state of battle which leaves each one of these companies coming out with what feels like daily press releases. Of late—a stream of releases from SAP with grandiose announcements about HANA, then in turn a stream of releases from Oracle with announcements about Fusion. Next, it was SAP with its purchase of SuccessFactors (SFSF), then it was Oracle with Taleo; all bringing us current to SAP's recent integration plans announcement for the SuccessFactors acquisition (which itself triggered a press conference response from Oracle and Taleo executive). To be sure, none of these announcements are small; in fact each one represents (at minimum) millions and often billions of dollars of invested time and resources that both companies have dedicated to driving future revenues.

And in a world where software technology innovation and the electorate's voice have together started to craft new purchasing paradigms, both Oracle and SAP should at least be lauded for their continued efforts to stay relevant and drive increased HR and payroll software value for customers. However, one can easily get the impression that the media banter is simply a veiled attempt to get the better of their opponent. So, in true fashion, let's see if we can't take these latest announcements and put them into both context and business sense. After all, voters have a right to know all the facts about politicians; and we feel customers should receive that same courtesy. Here's what we can surmise as the announcement dust begins to settle …

The Truth About SAP/SuccessFactors

SAP's acquisition of SuccessFactors (SFSF) captured the media buzz. While this acquisition was hardly an industry game changer, it nevertheless cast light on SAP's new integration strategy that will affect current and prospective customers. In a nutshell, the announcements were a broad-stroke painting of SAP's intentions to take current talent management investments (in SAP ERP HCM and Business ByDesign) and transition them to the newer SuccessFactors framework. While for the moment, SuccessFactors will remain an independent SAP company; as SAP's announcements make clear, plans are on the fast-track to make deep integration happen between these two HR software applications. If SAP had ever been lukewarm as to its HCM software solutions, it's clear that those days are behind them given the amount of time, energy, and considerable resources that are being thrown at the SuccessFactors initiative. Specifically, here's what we know:

  • SAP appears to be phasing out the SAP ERP HCM solution. While a commitment of support has been given until 2020, the fact is that SAP will not be delivering significant innovations for this HR software system beyond what has already been planned (e.g. mobile functionality, HANA in-memory analytics, and an improved user interface/user experience).
  • SAP's heavily hyped and burgeoning Career OnDemand is no more and will be essentially picked clean for any potential components not seen in other solutions.
  • The SuccessFactors Employee Central will become SAP's go-to cloud HCM product—a unified core HRMS and talent management software solution delivered from the cloud. Current and/or potential customers of either of these solutions (SF/SAP) however should recognize that regardless of resources, this is a lengthy endeavor—even if SAP already has a 51-country head-start on payroll.
  • Mobile HCM and social tools (for both SuccessFactors and SAP) are a decidedly gray area which the company references, but provides few details for. As such, prospects and customers requiring robust functionality within these areas should pay close attention over the coming months to determine whether these capabilities receive necessary planning and investment.
  • Business Intelligence (BI) for SAP's new solution remains an intricate and complex effort. Specifically, the company looks to integrate SuccessFactors Inform, Business Objects, and HANA to forge a new HCM analytics creation—an exceedingly difficult endeavor that involves overlapping feature sets; varying technologies; on-premise and SaaS delivery combinations; and the death of one or more solidly performing BI solutions (most notably the SAP Strategic Workforce Planning system). However, if and when this BI offering becomes available, it may in all likelihood be the single-best human capital analytics software solution in the market.

The Truth About Oracle/Taleo

Similarly, Oracle cascade of press conference highlight several key points that current and would-be customers should take note. First off, whether Mr. Larry Ellison truly cares about current Taleo customers or not, one thing is certain—he wants to keep as many of them as possible. Perhaps that's why there is far less carnage than typically happens after a large-scale software company acquisition such as this (especially for Oracle). While it was suspected that Oracle acquired Taleo for the company's recruitment software technology (and customer base), it's become clear from Oracle's recently released roadmap, that more feature sets will be used from Taleo than just recruiting. Specifically, here's what we know:

  • It appears as though Taleo's Recruiting, On-boarding, Performance (with added functionality from what the company calls 'unification' with Oracle Fusion), and Learning & Development applications will form the base of Oracle's cloud HCM solution.
  • The Taleo Compensation Management software will be killed off in favor of leveraging the considerable compensation solutions that Oracle already possesses.
  • Oracle has plans for on-going support for those smaller companies that are currently using Taleo Business Edition (TBE)—a base of about 4,300 customers; as well as Taleo Enterprise Edition (TEE).
  • While adept at managing the technical debt and numerous product lines that they have incurred to date, Oracle's agreement to support Taleo Business Edition and Taleo Enterprise Edition nets yet another code base to maintain—a problematic (albeit common) issue especially considering the smaller size of a sizeable portion of the Taleo customer base.
  • Oracle has given no indication as to when these changes will be taking place nor whether priority will be given to 'plugging in' Taleo as company executives called it; or simply letting Taleo operate as is/where is.

It's clear that both of these enterprise software titans are seeing the competitive threat of Workday and other emerging growth cloud HCM vendors (though SAP is the only one so far to actually admit this). While no numeric comparison is available with SAP, Oracle's Fusion HCM has only slightly more than 50 customers signed (which are mainly small to mid-sized companies) versus Workday's 280+ customers, many of which are in the 15-20K employee range (granted Workday has a considerable cloud HCM and payroll head-start on both SAP and Oracle). That said, both Oracle and SAP appear to finally be taking the strategic steps necessary to closing this gap; a verity that will likely lead to even more announcements. In fact, even now rumors are swirling that suggest Oracle's not done acquiring companies for its HCM software suite. Others say SAP will follow Oracle's lead from its Apps Unlimited days—keeping various pieces of legacy or antiquated software in perpetuity. The only thing that is for certain is that the battle between these two behemoths is far from over.

There remains one more, truly pressing, question open for discussion…if Oracle and SAP were running for office, what would their campaign songs be? For my money, I'd say that "Let's Stay Together" by Al Green would be SAP's (for their efforts to maintain their market position); "At Last" by Etta James would be Oracle's (for the fact that after 6 years in the making Oracle Fusion has finally happened); and for good measure (and equal representation for the 3rd-party candidate) "Do You Believe in Magic?" by the Lovin' Spoonful would suit Workday well. End

How would you rate this article?   

Implementation Category
 Filed In Categories: Payroll Vendors
Project Teams Tag
 Tags Tags: Oracle, Taleo, SAP, SuccessFactors
 Permalink Permalink:
Author  Author: Micah Fairchild
 Share Share:    Bookmark and Share
Payroll Software





While for the moment, SuccessFactors will be an independent HCM software company that is only affiliated with SAP; as SAP's recent announcements indicate, plans are on the fast-track to make deep integration happen between these two HR software solutions. If SAP had ever been lukewarm as to its HCM offerings, it's clear that those days are behind them.



Follow Us
Payroll Lab