HR on Cloud (SAP SuccessFactors) is primarily known as an HR Suite provider that caters to large enterprises (LEs). However, it is slowly but surely, gaining momentum in the SMB enterprises.
How do we define a small and midsize business (SMB)?
It is crucial that before we start our exploration of HR on cloud and its applicability for the SMBs, we first have a common understanding of what we consider a small and midsize business (SMB).
Gartner defines SMBs by the number of employees and the amount of annual revenue they have. The attribute used most often is the organization’s employees. Small businesses are usually defined as organizations with fewer than 100 employees, while midsize enterprises are those having 100 to 999 employees. The second most popular attribute used to define the SMB market is annual revenue. Small business is usually defined as organizations with less than $50 million in annual revenue; a midsize enterprise is defined as organizations that make more than $50 million but less than $1 billion in annual revenue.
Do SMBs face similar types of HR challenges as large enterprises?
SMB enterprises have different types of HR and HRIS challenges when compared to large enterprises. This is due to its size, lack of resources (number, types of resources, turnover), the skill set of resources, and above all, the lack of budget.
Most of the small and midsize businesses (SMB) would have started off being very small. They would have picked various off-the-shelf, disjointed software along their journey. Hence it becomes a real challenge for these organizations to determine the right HR software to run HR and Talent management processes.
These organizations need an HR system that is best in class, easy to implement, flexible, and can grow with the organization. Yes, we should add to the mix affordable and easy-to-maintain as well. Unlike other ERPs where you have various solutions for different sizes of organizations, HR on Cloud (SAP SuccessFactors) fits into a small organization with 50 employees as easily as it would, with large organizations having more than 200k employees.
A growing presence in SMB HR on Cloud market
Although SAP is known for being the provider of ERP systems that cater to vast global enterprises, SAP SuccessFactors is making its presence felt in the crowded SMB HR on Cloud market as well.
SuccessFactors has been around for more than 15 years in the Talent Management space. SAP acquired the software in 2011. Since then, it has become the fastest-growing cloud product within SAP’s wide range of cloud products and services. As of today, it has 6500+ customers across the globe.
According to SAP, SMBs make up 80% of the company’s customer base. That is also one place in the market that offers the most Greenfield opportunities and is growing rapidly compared to the large enterprise space.
SAP is committed to packaging and pricing SAP SuccessFactors as their HR on Cloud solutions to suit the SMB market.
Finally, with SAP SuccessFactors, SAP proves that there is undoubtedly an HR system that’s the right one for every organization.
10 reasons why SAP SuccessFactors is the best HR on cloud software for SMB enterprises
In the earlier part of the blog, we discussed the market situation and where SAP SuccessFactors falls in the scheme of things. But as an SMB customer, all that you would like to know is how this can help you, how much time it is going to take to implement, how much training is required to train your staff, the flexibility of the tool, support, cost, and other such aspects. I will be highlighting below the ten compelling reasons for you to consider SAP SuccessFactors for your business.
Size Does Matter
In 2017, SAP’s revenue amounted to about 23.5 billion euros. A significantly large amount when compared to its competitors in the SMB marketplace. You may ask, why does that matter? It does, as SAP has significant leverage over its HR on Cloud competitors in regards to R&D dollars invested in SAP SuccessFactors products.
They can do so not only because they have more revenue but also because they sell the same software for the large enterprise market as well. So as an SMB enterprise, you are taking advantage of this investment coming your way at a fraction of the cost to you.
Today, you may or may not care about the underlying technology. Still, as you grow as an organization, it would be increasingly important to you that the underlying technology is stable, safe, reliable, and scalable. One such example is the use of in-memory database HANA in SAP SuccessFactors. This is the same database that is used by multi-billion dollar organizations to run their entire business globally. So upfront, you know that you are in safe hands.
Before we move on to the next reason, another aspect that we would like to highlight here is the embedded HR Analytics. SAP Analytics Cloud is a large enterprise-grade Analytics tool capable of doing business Intelligence, business planning, and predictive analytics that is available to you for reporting purposes. We shall expand upon this more later in the blog.
Global Presence and Compliance
In today’s business climate, rapid change is inevitable. Throughout the various business changes and globalization, organizations are constantly under pressure to be compliant.
When we talk about HR Compliance, there are four main key areas, i.e., Payroll, Benefits, Risk & Safety, and Recruiting.
Areas of Compliance
The regulatory landscape has changed, with an increasing number of workforce laws, regulations, and agency rules applying to labor forces around the globe. SAP has issued a significant number of regulatory changes across the more than 90 countries that SAP actively monitors.
Having tracked the number of directly related core-HR legal changes throughout the world, SAP has seen a 22% increase over the last four years (see the attached figure). These various legal changes span wage and hour regulations, a multitude of report requirements, and anti-discrimination and union laws and amendments.
This surge in regulation has surpassed the ability of most SMB organizations to track, manage, and comply using their existing resources. The cost of non-compliance is just too high a price for the organization’s reputation and finances. Hence you need an HR on cloud system for SMB organizations that come fully complied, out of the box.
SAP SuccessFactors out of the box solution complies with all existing regulations as well as international laws like GDPR, Turkey’s data protection law, etc. Therefore, helping SMB organizations to save cost and mitigate the risk of non-compliance.
Flexibility – Start Anywhere, Go Everywhere
What the SMBs most want is not a lot of features and functionalities but a way to grow their business by leveraging new capabilities while minimizing the risk. The mantra here is that digital HR transformation doesn’t happen in a day but occurs at the organization’s own pace and ability. So no ripping and replacing of existing software and infrastructure or retraining of staff but rather the replacement of what is needed and when it is needed. You are the boss, and it is your call. This is the one significant difference between SAP SuccessFactors and its competitors. SuccessFactors allows you to start anywhere (where there is an immediate need) and goes everywhere (grow with the business).
SAP SuccessFactors’ phenomenal growth has been primarily spurred because it has a set of comprehensive tools that appeal to a broad set of HR functions from hire to retire and also because of its ability to address the HR needs of a variety of industries within the same software.
This repertoire distinguishes SAP SuccessFactors from its competitors that focus on one HR function like Core HR or Talent Acquisition. A large number of partners are also adding various extensions to the standard product. These include apps that are readily available in the SAP App Center for purchase, with out-of-the-box integration with the core SAP SuccessFactors product.
Please click here to read the second part of the blog.