What is SAP SuccessFactors?
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Published: 8 December 2023
Contributors: Molly Hayes, Amanda Downie 

What is SAP SuccessFactors ?

SAP SuccessFactors is a leading cloud-based system for human capital management (HCM). The platform is designed to help organizations optimize their workforce management, from talent intelligence and workforce analytics to succession and development planning.   

The software-as-a-service (SaaS) system is one of several modules offered by SAP, one of the most popular enterprise resource planning (ERP) vendors in the world. The flagship human resources suite was designed to centralize and streamline nearly every aspect of the HR management process through its entire lifecycle, including:  

  • Onboarding, recruitment and retention  

  • Performance management, metrics and people analytics  

  • Compensation management, payroll and benefits administration  

  • Time and attendance  

  • Talent management, succession planning and hiring  

  • Learning and professional talent development   

Like some other SAP products and modules, SAP SuccessFactors is primarily cloud-based but in cases requiring on-premises data storage, the software can be deployed as part of a hybrid cloud model. The software can be used alone or in tandem with other SAP products, such as SAP CRM for customer relationship management or SAP SCM for supply chain management.

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History of SAP SuccessFactors   

SuccessFactors was initially founded in 2001 by the San Francisco-based Lars Dalgaard. The company went public in 2007. In 2011, SAP acquired SuccessFactors for USD 3.4 billion in a merger that was widely understood to represent the ERP giant’s long-term investment in the cloud.1  

According to SAP (link resides outside ibm.com), the HR solution is currently used by over 12,000 companies in more than 200 countries. In recent years, the company has placed an emphasis on human experience management (HXM) over HCM, pointing to the importance of employee experience in a rapidly paced and increasingly digital business environment.2   

Key features of SAP SuccessFactors

SAP SuccessFactors’s HXM suite is built to manage nearly every aspect of the HR process. In addition to core HR functions like payroll and benefits, the platform facilitates advanced employee experience management with tools for work-life balance assessment and succession planning. Using SAP SuccessFactors solutions, managers can also gain increased insight into workforce trends.  

Key features of SAP SuccessFactors include:   

Compensation: SAP’s SuccessFactors Compensation platform helps managers build and organize compensation programs, automating and simplifying employee rewards. 

Continuous performance management (CPM): Using SuccessFactors, managers can have continuous visibility into employee activities, providing timely feedback on pertinent topics and questions. Using this system, employees can mark achievements that are then linked to performance and development goals.   

Employee Central: SAP SuccessFactors Employee Central is SAP’s human resources information system (HRIS). It allows organizations to standardize HR processes, manage user profiles and organizational charts and administer benefits. The HRIS includes self-service tools and employee alerts.  

Employee Central payroll: SAP SuccessFactors's cloud-based payroll management system automates the payroll process and provides advanced analytics, reducing errors and ensuring payments are handled in a timely way.   

Employee Central Service Center: Using the Employee Central Service Center, employees have direct access to their organization's HR experts and personalized policy information from any device.  

Learning: Organizations use SuccessFactors’s AI-powered learning management system (LMS) to create customized engagement scenarios and surface new employee development opportunities.   

Onboarding: SAP’s onboarding software simplifies the process of bringing on new hires, providing dashboards and customized trainings alongside built-in electronic forms.  

Performance and goal management: SuccessFactors's performance and goals tools provide advanced analytics for measuring team productivity and the opportunity for ongoing feedback, improving employee performance.   

Recruiting: Organizations use SAP SuccessFactors Recruiting to attract, identify and hire talent. The software’s applicant tracking system and automated systems integrate with other data streams, allowing managers to track both the short- and long-term effects of recruiting efforts.  

Reporting and analytics: SuccessFactors features advanced HR analytics for accurate and timely intelligence, allowing managers to answer workforce-related questions quickly and uncover broad HR trends.   

Succession and development: Using SuccessFactors's succession planning tools, organizations can identify promising internal candidates and objectively assess employee performance, developing key talent.

Work-life: Using SuccessFactors's work-life assessments and dashboards, employees can track their well-being and complete activities to maintain healthy practices at work. These human experience management tools are also available to managers, who can use them to collate anonymous reports and compare data across different departments.   

Benefits of SAP SuccessFactors

Like other SAP ERP apps and modules, SAP SuccessFactors allows organizations to unify multiple business processes into a single system with a single user interface. The platform’s HCM suite features AI-enabled functions and analytics that are particularly useful for midsize or large organizations handling vast amounts of employee data.

With the SuccessFactors HR system, businesses can engage in more effective workforce planning. Among the key benefits of SAP SuccessFactors are:  

Cloud-based scalability: As a cloud-based platform, SuccessFactors’s HR system is particularly scalable. HR and employee data can be accessed from anywhere, promoting flexibility and mobility.  

Continuous improvement: The platform monitors and enhances employee achievements, providing recommendations for professional development and surfacing talent for effective succession planning.  

Performance analytics: SAP SuccessFactors’s advanced HR analytics allows decision-makers to respond to workforce needs in real-time and uncover buried insights, enhancing productivity.  

Streamlined processes: SAP SuccessFactors brings the entire HR lifecycle to a single platform with a single user experience, allowing organizations to visualize disparate workflows. 

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1 SAP to Acquire SuccessFactors for USD 3.4 Billion, All Things D, 3 December 2023

The Rise of HXM (link resides outside ibm.com), SAP