Compliance stuff.

Wrote this on the plane on the way back from Sweden. They speak better english than anywhere else in the world, even England.  

I spent the last six months of 2005 working closely with the Virsa systems and the Virsa team. For my sins I managed the relationship between Virsa  EMEA team and our field organisation.  Virsa is in the right place at the right time. Jasvir Gill and his team are really on the ball.  I wish I had some shares.

It is a great example of how SAP’s ecosystem model can work well. The partner gets to leverage the SAP sales channel and brand, reaching a bigger and better target audience. SAP gets to market with a solution quicker than we could have done by playing catch up. The customer wins because they get the support and the integration commitment from SAP, yet the focus of a niche player.  I’m looking forward to seeing this ecosystem model grow with other organisations. We are still learning  a lot from working with Virsa about how to make a small company leverage the SAP machine.

Compliance is going to be big and just get bigger. SOX is just the tip of the iceberg. People that understand the legal issues and the technology solutions are going to be in serious demand. As the laws get more complex and demanding, technology will need to play a much greater role in policing, warning, optimising and reporting on compliance. (I hope so as I’m the middle of a the world’s longest lasting PhD on the relationship between law and enterprise applications.) I’m keen to share ideas with others working on compliance related issues, either from a law or technology perspective. Let me know what you think about the convergence of enterprise risk and compliance

Those boring things that SAP has always been pedantically disciplined about, audit, security, authorisation, rules, workflow, access control and so on have suddenly become trendy. In the past it was sometimes seen as “German” overengineering, especially in the sales cycle.  Audit information systems and internal controls weren’t cool things to demo. Now they are. Thanks messrs Sarbanes and Oxley. Keep it coming.

There is lots of good stuff out there on the SAP community. Check it out.  hug an auditor today.

Some thoughts on SAP’s competitive advantage and Germany

The ongoing workers council discussions at SAP  prompted me to write this, without really thinking what to do with it.  Reading a couple of blogs and many newspaper articles made me think it might be worth posting here. (my blog is all of three days old, so I cant be too picky)

Again, my views, not those of my employer.

I figure if Jeff in the US can write about it then I might as well too. 

SAP isn't about to be unionised, just that a union (the metalworkers union, go figure)  is pushing for SAP to have a formal workers council like just about all other German companies and german subisidiairies (IBM for instance) with more than 5 people and a dog do.

 More than 90 percent of employees voted  against the idea, but the German law states that three employees can ask for a works council to be voted in. (dumb law?). .

 This article. covers the story in English with some minor errors..  Lots of the non-German blogs don't really get the German company law stuff.  (sorry Jeff)

 There is lots of German press coverage

My main thoughts are on the broader "Germanness" thing and SAP

Continued globalisation is clearly key for SAP's long term success, more and more revenue comes from outside of Germany, and more and more development will take place in Asia, Eastern Europe and around the world. Our board is clearly right to search the world for the best talent and bring them to SAP. If we are to succeed we need the best developers, sales people, consultants, marketeers,  administrators and managers at SAP, irrespective of their background or nationality. We need new ideas, we need to be challenged by people with other experiences, views and concepts. What worked before will not necessarily work in the future. The Austrian economist Schumpeter's "creative destruction" thesis has never been truer than today, in our industry especially. Bangalore, Palo Alto etc bring new ideas, clearly we need to be part of the world's major innovation clusters.

In Walldorf we hear a lot about this need to be "global" and some employees based in Walldorf feel uneasy about the perceived powershift to Palo Alto and elsewhere, and the relative ease in which those that used to work at Oracle, PeopleSoft or JD Edwards have moved across to SAP, hailed as the new messiah, or at the least as the new VP.

I'm neither American or German, so I'm something of a spectator of this "americanisation" angst.  I moved to SAP in Germany from Africa at a time when all emails were in German, and as a foreigner you learnt quickly that you needed to invest in understanding the German culture if you were to succeed at SAP. It was a big investment learning German (still trying)  and figuring out how the Germans function (also still trying). Ordnung muss sein was one of my first sentences. It was also fun.

I've also lived and worked in America, so I have some idea how that functions too. I understand the most of the rules of baseball.

As SAP continues to globalise though, I think it is worthwhile to pause and think back to what has made SAP the success it is. A big part of that success comes from that very "Germanness" that is now perceived by some as unfashionable and irrelevant.  Discipline, debate, deliberation, diligence, a focus on detail, a healthy skepticism of "marketing blah-blah", consensus, thorough execution, and a strong ability to self-criticise are key to SAP's success to date.
Many of the world's greatest industries were founded within 30 minutes drive of SAP. The first car drove from Mannheim to Pforzheim, or there abouts. Soon after that Benz built the first car garage in Ladenburg. Friedrich Engelhorn's BASF, the world's biggest chemical firm, is just across the river. Many of the world's great philosophers and mathematicians were German: Gauss, Reimann, Hilbert, Jacobi, Kant, Runge, Hegel, Marx and so on. More recently,  MP3 is a German invention. SAP is part of a long line of German innovation.
SAP's german roots are part of its success and its long term competitive advantage. We should not ignore them. As we grow as a global company, we shouldn't forget that  innovation and engineering are at the core of SAP's success. At the same time, we need to be open to new ideas from abroad and from people from other companies, and adapt to those new ideas and ways of working. Other great German brands, although global, leverage their German heritage. Vorsprung Durch Technik, for example.
But Max Weber, another famous Heidelberger , wrote of "The passion for bureaucratisation drives us to despair."  and the "the iron cage of bureaucracy".

I know which Germany I prefer. The SAP and the Germany that attracts people like me is the Germany of innovators, not of stagnators. Those that fear globalisation will not find safety in further bureaucratisation. To compete, innovate and grow we need less rules, not more.

As the TV campaign notes, "Du Bist Deutschland"  Wir auch SAP.

looking at other HR tech blogs

As I'm new to this blog thing, I figured I ought to surf around a bit and see what else is out there in the HR technology space. two that caught my eye were Michael Specht's and the Yankee Group analyst Jason Corsello The Human Capitalist :cool name. 

An excellent source of HR press releases and updates is Christian Acosta's website. He did his doctorate on HR technology, and now works with me at SAP.

I'm also impressed with this wordpress software. I'll just need to figure how to make the RSS stuff work and I'm in business.

technorati tag:

HR and Finance

I have been following HR trends and theories for the past 15 years or so. Working at a leading software company, I’ve spent considerable time crafting product messaging and linking technologies to these themes. Selling and consulting about HR technology is an interesting place to observe the ebb and flow of HR trends, waves and fads. In the past few years, shared services, HR as a business partner, becoming strategic, jettisoning administration, outsourcing, Talent Management,  HR transformation and other buzz words have resonated throughout the HR space, not just in the US; but world-wide.

The Ulrich business partner model is now at the core of many HR department plans. It is rare today that I meet an HR organization that isn’t doing some form of shared service restructuring, or “transformation project”. The mantra of “strategic” HR is on the lips of most HR management.

“We need to add value to the business and drive the organization of the future.”

  • “The HR head should be the trusted advisor of the CEO”
  • “We must become more analytical, and measure ROI and link HR activities to profitability or growth matrixes.”
  • “Performance management must link to organization success and individual success”
  • “How can we win the war for talent?”
  • “We must benchmark”
  • What should we be called?

Consulting firms point to diagrams of pyramids inverting admin into strategy. BPO providers articulate how outsourcing can reduce the administrative burden and free up the space and resources to “Be strategic”. Technology promises to reduce administrative drudgery and slash transaction costs. We are busy in HR, aren’t we, changing our world for the better?

HR- under huge pressure to validate and prove it adds value. HR: underinvested and undervalued, but fighting back. HR, on the move – transforming. HR, wrestling with a changing agenda, reinventing itself and becoming “business focused”, “integrated” and linked to the “bottom-line”. Some HR departments have gone as far as to re-brand HR as “Human Capital Management”. Software products have been quick to follow.

Somehow, HR often manages to see itself as unique, having different challenges from the rest of the organization, requiring unique solutions and processes. People outside HR often look on in bewilderment, wondering what it is that keeps HR so busy.

I recently received a major jolt. I’ve have started to collaborate with a new team looking at Chief Financial Officer challenges and issues. Key current top topics are:

  • Getting more out of financial shared services
  • Beyond compliance
  • Transforming from administrative to value added financial services
  • Enterprise performance management
  • Accounting for intangible assets (IP, Brand and People)
  • Becoming the trusted advisor of the line and the executive team.
  • Building for the future.

I recently saw the Wharton executive program, “The CFO: Becoming a strategic partner” featured prominently on their website. Books and journal articles abound promising to “transform it (the finance function) from a numbers-cruncher into a strategic partner to the business.”

The most recent issue of the CFO magazine was devoted to Human Capital. With articles such as “What’s wrong with finance training” and “The new Human-Capital Metrics.”

In the German “Controller” magazine a recent article explained how HILTI had integrated HR type metrics into accounting reporting.

I have been asked to give a talk on “People issues for finance”- to provide guidelines for finance functions developing learning programs to cope with the switch to shared services and business partnering. It is worrying that they are asking me, and not their own HR teams.

It is seldom that I see HR and Finance willingly talking to each other. Even at business school the HR folks and the Finance Folks would hang out at different ends of the library or even the bar.  The accountants would play hooky in the organization management classes, and the HR folks would avoid “quants” and accounts like the plague. Relationships or liaisons with bean-counters were frowned upon. Their jokes weren’t even funny.

Odd then: The top challenges facing the Head of HR are almost exactly the same as those facing the Head of Finance. Perhaps it is time that Finance and HR sat down together and shared some ideas. HR folks might be able to teach the finance folks a bit about the people issues in performance management, and who knows, just maybe they could help you figure out how to build a convincing ROI case for your talent management strategy. 

You might even come up with some joint strategies. Measuring the value of “Human Capital” is interesting to the accountants too. Sarbanes-Oxley isn’t just a finance thing. You may agree it seems dumb to build two shared service centers to handle first level support. You may realize that accountants are people too. If you think back to business school, there was that one person in accounts who was patient and explained depreciation without seeming depreciating, and who was able to write a sensible paragraph on organizational culture. Organizations need more of those people, and less of a silo mentality.  He or She is probably a CFO now.

HR and Finance are not castes. Its time for some inter-marriage.

Banking and HR Technology….

 Banking and Human Resources:  some parallels.
Banks, like many of us, were caught up in the internet hype of the late 1990’s. Online banking promised to revolutionize all forms of banking, removing the need for branches and such like. Traditional banks and insurance companies launched internet only banks. The high street bank branch was doomed, it seemed.

Banks now realize that retail banking requires a multi-channel approach. Not all customers are the same, and not all banking processes are equal. Banks today deliver a multi-channel experience. It may make sense to do a simple bank transfer online, but I may wish to talk to someone on the phone about my mortgage, and I’d like some face to face advice from an expert on balancing my investment portfolio or setting up as an independent contractor.  Also, a 25 year old graphic designer is likely to have a different channel mix from a pensioner, although the silver surfer community is the fastest growing of all.

Banks have become very sophisticated in managing this multi-channel approach. It has taken a number of years to get the balance, and as new technologies emerge, the model needs re-balancing.  The best banks though, know that managing the channel model is the key to cost management, customer satisfaction, and ultimately, profitability.

I’m of the view that HR needs to do the same. In talking with many companies today, I can segment them into three groups.

Technophobe: Self service is not for us. Our managers and employees want to deal face to face with HR. ESS (employee self service)  and MSS (manager self service)  is just pushing work to the managers, they should get on with managing not self service.

Technophile: With ESS, we don’t need HR anymore. Managers and employees can access the system 24-7  and do everything online themselves.

Technorealist: We deploy a mix of interaction models. We use the web, the phone, email and face to face meetings; depending on the type of services, the customer receiving the service, and our cost model.

I don’t expect the bank teller to advise me on whether invest in a hedge fund, and I don’t expect a hedge fund advisor to transfer money from my current account to pay the electricity bill. Why is it that some companies seem to think that the HR generalist, who processes my sick leave form can advise me on building a high performance team, and can help me structure a compensation plan that will retain my top performers?

The dissonance between work and home continues to grow. Most of your employees are familiar with eBay, Amazon, Yahoo, Google and so on. They can submit their tax returns online, pay parking fines, congestion charges and even do online banking.

ESS is not the answer to all HR questions. But neither is an HR generalist on every corridor. The best HR functions today work like the best banks do. They understand the customer demographics, and the service demands, and deliver the most convenient service at the price point that makes sense. They provide efficient transactional services, accurately and cheaply, with a minimum of fuss. And they provide advice and guidance when it really counts.

quaero or eurogoogle????

There is a lot discussion the moment about Quaero, sometimes called eurogoogle…… Nicholas Carr’s blog provides a good launch point  Many condemn this “government intervention into the free-market.” and to contrast “old Europe” with “American entrepreneurship” For instance in the International Herald Tribune 

The US software industry owes much more to the US government that many care to mention.  It is easy to forget that the software programmer profession developed to service the
US government’s desire-need for defence system programmers. (the sage air-defense project) It is well known that the Internet grew out of US Defense Advanced Research Projects Agency projects.
Lawrence Lessig and many others argue that the internet’s basic open design principles wouldn’t have been built otherwise. The Defense Advanced Research Projects Agency can hardly be described as two guys in a garage or even a free-market institution. 

To quote from its web site. The Defense Advanced Research Projects Agency (DARPA) was established in 1958 as the first U.S. response to the Soviet launching of Sputnik. Since that time DARPA’s mission has been to assure that the U.S. maintains a lead in applying state-of-the-art technology for military capabilities and to prevent technological surprise from her adversaries.”  Adam Smith’s invisible hand indeed.

A leading computer industry historian, Martin Campbell-Kelly noted

 “The likely prime reason for U.S. software supremacy is a paradoxical one –government support for the industry. The paradox arises from the fact that, although the United States is non-interventionist in principle, in practice it promoted the early industry massively by creating a market for computers and software through programs such as the SAGE project, the Department of Defense’s ADP program, and the NASA program, to mention only the largest..”  check out his book Martin Campbell-Kelly, From Airline Reservations to Sonic the Hedgehog: A History of the Software Industry, MIT Press, Cambridge Mass., 2003.   

If the goal of the new search engine is to safeguard “European cultural heritage” then a billion € seems cheap. 

But building long term technology leadership requires a long term investment in basic and applied research, not just speeches from embattled politicians. The Americans keep telling us (europeans??) we need to learn to be entrepreneurs, but I think we could do with some lessons in Government spending first. Less cows more code.