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AltaFlux Corporation is an enterprise cloud technology consulting services firm. We help clients to automate, transform, and optimize their business processes.
The decision to purchase an HR technology solution like SAP SuccessFactors is rarely one you make in haste. Likely, you’ve spent the better portion of a year evaluating multiple solutions before reaching your decision. You’ve identified your business objectives and gained buy-in from your executives. Now all there is left to do is implement, right? Wrong.
Selecting and implementing a solution like SAP SuccessFactors is just the beginning of your journey. We like to educate clients by using the metaphor that in purchasing SuccessFactors, they’ve bought an elephant. Now you must consider what it takes to feed the elephant.
Aside from licensing and implementation costs, there are several other things to factor in when budgeting to maintain SAP SuccessFactors. Based on our 12+ years of SuccessFactors experience, we’ve compiled a list of costs that clients may or may not consider as part of overall maintenance costs to ensure you’re successful and maximizing the value of your investment.
First things first. Every major HR cloud technology purchase, including SAP SuccessFactors comes with a recurring licensing model and cost. Typically, longer term commitments or plans will provide the most cost savings. If you can commit to a three (3) or five (5) year contract, there will generally be a discount associated with that longer term commitment.
Things to Consider When Purchasing Licensing
SAP Preferred Care can be bundled with your licensing agreement and offers services from the SAP team that comes with additional perks. Think of SAP Preferred Care like an extended warranty or additional insurance. SAP Preferred care is designed to help you maximize the value you get from SAP cloud solutions and facilitate successful cloud adoption across your business. Depending on the size of your organization, a designated customer success manager would be assigned to your account to help accelerate your return on investment and enable you to meet your cloud strategy goals through regular check-ins and road mapping exercises. More info on SAP Preferred Care can be found on the SAP website, or by reaching out to your SuccessFactors Account Executive. From a cost perspective, SAP Preferred Care is typically 22% of your overall licensing spend.
Implementation costs are a one-time expense based on the scope of the implementation (number of modules, complexity, timeline, etc.). Though it's a one-time expense, it can vary drastically depending on your approach to the project. We often educate clients on the crawl, walk, run approach, where “crawl” may be as simple as implementing out-of-the-box functionality with no customizations. “Walk” may include slight customization, and “run” may include customization and all the bells and whistles of a solution. There’s no right or wrong way to approach implementation as it’s unique for each organization, just know that the implementation cost will typically reflect the effort.
It’s important to consider integration costs when planning for implementation or support of SAP SuccessFactors modules. For example, Recruiting clients that integrate with a third-party system like ADP should consider integration costs as the data has to come from the third-party system. Clients must budget to pay an implementation partner to build the integration and the third-party vendor to support the integration and/or adjust their existing system to support SuccessFactors if necessary.
Re-implementation or Rework
It’s not uncommon for clients to have to re-implement or rework configuration based on their rollout strategy. Having an end in mind when developing your roadmap and throughout the implementation of each module may save you some grief in the long run. For example, many SAP SuccessFactors clients start with talent first, and add Employee Central later. If you know that you will ultimately implement Employee Central in the future, you can implement the talent modules with any core HR considerations in mind to avoid major rework in the future (and potentially avoid additional implementation fees).
Additional reading: The Insider’s Guide to Implementing SAP SuccessFactors
Having the right people on your team is a crucial aspect of maintaining any HR technology, especially SAP SuccessFactors. Whether your resource strategy is to manage with internal resources, third-party support, or a blended model, this is an aspect many clients often overlook as part of their maintenance strategy.
When thinking about resources, think about these three (3) factors:
Just because SAP SuccessFactors is in the cloud, doesn’t mean it runs on autopilot. And simply because you are on an annual performance process and access the system once or twice a year doesn’t mean the system should be left alone in the interim. SAP SuccessFactors releases a ton of innovation twice a year that clients can take advantage of (read more about release management here) to enhance their processes and user experience. If you’re not maintaining the system on a regular basis, it’s easy to fall behind.
We recommend at least one internal resource who is responsible for managing the system (for at least a portion of their time). Keep in mind that if it’s a split role, their HR/business responsibilities may take priority over the system maintenance. System administration is as important as any of the other costs or decisions that you make. If you’re going to invest money in this product, and not plan to invest or budget to maintain it, you’re not doing the system justice.
Love them or hate them, SuccessFactors partners are available to provide support. Whether you choose to engage a third-party vendor to fully support your SuccessFactors solutions, or if they act as an extension of your team, entirely depends on your organization’s needs. There is not a one-size fits all formula to supporting SAP SuccessFactors.
To determine whether you need to engage with a third-party support vendor, you must evaluate your internal bench strength and ask whether you have the appropriate amount of people and decide if those people have the right skillset(s) to manage the various questions and needs that will arise. Whether you have one system administrator or one administrator per module, the need for a backup may occur due to vacations, lack of cross-module knowledge, resource bandwidth, etc.
Should you decide third-party support is required, and you don’t have an idea of your current burn rate (the hours you exhaust per month on SuccessFactors support) we recommend budgeting, at a minimum, 5-20% of your full-time equivalent per module. For single module installs or modules like Performance, Compensation and Succession, we recommend an average of 5-10% since those cycles typically happen once or twice a year.
Aside from serving as a backup to your internal resources, another reason to consider engaging a third-party support vendor may be from a logistics perspective – time zone coverage, global requirements, etc.
What if we have Preferred Care and third-party support?
Many midmarket and large enterprise clients leverage both SAP Preferred Care and third-party support for various reasons (resources, bandwidth, skillset, etc.). When asked the best way to capitalize on both partnerships, we advise clients use Preferred Care for more strategic conversations related to product and roadmaps, in addition to it being an escalation channel with SAP support. Preferred Care can often conduct exercises like assessments and health checks, and when it comes time to implement those suggested changes, we would recommend using your third-party support partner to make those updates or changes.
At some point in your SuccessFactors journey, you may discover the need to compliment the functionality with add-on solutions. Examples of this can be a background screening provider or video interview solution to enhance your recruiting and onboarding process, or a content provider for learning management.
The cost associated could include both licensing and implementation through that specific vendor. Keep in mind that SuccessFactors has partnerships with many third-party tools that can easily be added to your licensing agreement, but if a partnership doesn’t exist, you’ll need to facilitate a contract directly with that third-party vendor.
Finally, let’s not forget the fun stuff! Conferences, certifications, and user groups are all ways to expand your internal knowledge of the SuccessFactors product and gain lessons learned from other organizations. Here’s a breakdown of some continuing education resources and cost.
SuccessFactors User Groups
As you can see, there are several things to consider beyond selecting and implementing SuccessFactors that will make an impact on your overall success. Having the appropriate budget and resource strategy will ensure you’re keeping up with the latest and greatest functionality to gain the most of your solution(s).
Still have questions on on-going maintenance cost? Give us a shout! We’re happy to take a deeper dive and discuss your unique needs.
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AltaFlux Corporation is an enterprise cloud technology consulting services firm. We help clients to automate, transform, and optimize their business processes. We have expertise in leading Enterprise Cloud Platforms, such as SAP SuccessFactors, Dell Boomi, Microsoft PowerBI, WorkForce Software, and Benefitfocus. Learn more about AltaFlux (+)