Over the last 3 years, I have had an amazing opportunity at SAP to work in the business process integration area related to the red-hot HR and cloud ERP space. SAP under Christian Klein is boldly moving forward with its cloud strategy, innovating at cloud speed, and delivering on the promise of the Intelligent Enterprise i.e., bringing the best-of-breed business applications like SAP SuccessFactors, SAP S/4HANA, SAP Fieldglass, and best-of-suite solutions together to help companies steer customer experience (CX) and employee experience (EX) in real-time and meet or beat stakeholder expectations.
Here are my high-level observations and outlook of the HR and cloud ERP space going into 2022:
1. “Every transformation is a people transformation”
I have heard two incredible leaders, Jill Popelka and Meg Bear of SAP SuccessFactors say this, and I buy into it. The world is operating at a time where every industry is being disrupted and every company that wants to compete is undergoing a massive transformation. Business continuity, cash flow, and enterprise agility to adapt to the changing customer demands, exacerbated by the pandemic, are top of mind for all the c-level executives. The pandemic has made it abundantly clear that the front office and back office needs to be digitally connected. Now more than ever digital transformation projects are being catapulted to the top of the priority list and enterprise workloads are moving to the cloud at a breakneck speed.
When you look at the very core of each transformation project, and you peel away the layers, every transformation is a people transformation. No digital transformation at a company can happen without its people. Additionally, we all know that people with talent are a huge competitive advantage for any company – big or small. Talent can significantly influence the growth trajectory and success of a company.
Against this backdrop, the business outcome that is expected of the chief HR officers (CHROs) is to be able to deliver exceptional total workforce experience that keep people engaged, inspired, and performing at their very best. The move from human capital management to the more strategic human experience management (HXM) is now well acknowledged by HR leaders and industry pundits alike as companies across all industries turn more people-centric. The high market traction for the SAP HXM suite is a great proof point and it is setting our customers up for success in 2022 and beyond.
2. The COVID-19 pandemic has shined a bright light on the HR function
The uncertainties caused by the pandemic are very human and so it has brought the CHROs into the spotlight. This is very similar to what the financial crisis of 2008-2009 did for the CFOs and the dot-com bubble of 1999-2000 did for CIOs. Yes, other members of the c-suite like Finance and Supply Chain remain important but all eyes in the boardroom are certainly on the CHRO. The HR leaders who are shining the most today know how to help their companies navigate and thrive amidst the pandemic and all the dramatic changes it has triggered.
These superhero-CHROs are bold, have a justifiable swagger, and are successfully redefining their roles at their companies including contributing to strategic decision-making while working closely with the CEO and the Board. They aren’t happy just managing the HR business function. They are interested in taking on cross-company responsibilities and partnering up with their CEOs. A great example of a superhero-CHRO is Kathleen Hogan of Microsoft. For details, you can read this blog on her interview with Jill Popelka at a recent SuccessConnect event.
Microsoft under Satya Nadella has quadrupled its value over the last couple of years and recently breached the 3 trillion-dollar market cap. In Nadella’s book Hit Refresh, he talks about empathy and changing the company culture, and I’d venture to guess that Hogan and her HR team had quite a bit to do with it. Note: Microsoft is powered by SAP SuccessFactors and many other mission-critical SAP business applications from our broad portfolio.
3. Leena Nair as CEO of Chanel
I read the news about Leena Nair being appointed as the new CEO of the iconic brand Chanel on December 17th, 2021, with much interest. She is a real trailblazer and was the former CHRO at Unilever. She hails from Kolhapur, India, my ancestral hometown as well, and so her appointment as CEO further piqued my interest. This appointment is huge in the world of HR as it is rare for Boards to consider and appoint CHROs as CEOs. It has indeed shattered the previous norms and glass ceilings for HR leaders. It opens possibilities and provides opportunities for upward growth for CHROs and HR professionals to aspire for and reach new heights.
4. HR technology is core and will continue to play a pivotal role
Today technology is foundational for success, and we are almost daily reminded of the famous Marc Andreessen quote from a decade ago – “Software is eating the world”. Technology is enabling CHROs to be very efficient with the blocking and tackling of the HR line of business (LoB) including managing their total workforce and building closer ties to the rest of the LoBs e.g., finance, procurement, IT, sales at their companies. Additionally, having data and insights at their fingertips is helping them amp up their game as demanded, with rigor, during these current pandemic times. CHROs can now have those strategic conversations with their peers across their business and importantly with their CEOs to take care of the most pressing talent and workforce issues, build the workforce of the future and drive the company forward.
5. RISE with SAP is just what the doctor ordered
As companies look to truly transform and move their workloads to the cloud just having Software as a Service (SaaS) or Infrastructure as a Service (IaaS) is not enough. They need a more holistic offering and a trusted partnership. SAP’s answer is RISE with SAP including RISE with SAP for HXM. It is Business Transformation as a Service (BTaaS) and it bundles both software and services together. It is an appealing offer for companies in their transformation journeys. They do not have to go it alone. As mentioned in SAP’s Q3 financial announcement in October of 2021 we had over 300 companies sign up for it in that quarter alone.
Overall, I believe it is a great time to be in the HR space. The future is bright and holds a ton of promise as companies become more purpose-led, bring EX and CX together and reach for their digital transformation nirvana.
Here’s to your successful business transformation journeys and let us all hope we have more CHROs turning into CEOs in this new year and this decade.