IBM and SAP Integration: The Latest HCM Software Partnership

IBM and SAP Partnership: An Unlikely Marriage or a Force to Be Reckoned With?

sap-ibm-integration-partnershipHundreds of startups have entered the HCM space over the past few years. The goal is often to help companies rethink traditional processes and innovate different areas of talent and workforce management. Some of these providers achieve significant growth and profitability. Others do not. It’s hard to pinpoint exactly what drives success of a new HCM player but partnerships certainly play a significant role. Successful startups seem to have a willingness and openness to integrate and partner with a wide range of companies- even competitors. These relationships can help providers enter a new market segment, expand their suite of products or gain access to talent and ideas. Partnership and integrations are helping to define the future of the entrepreneur.

So, why wouldn’t the same be true for larger, more traditional players? Why wouldn’t these same relationships drive product leadership and vision and growth? Yes, it’s true that most of the “big guys” partner and integrate with the “small guys” to help round out their product portfolio. But very few partner or offer integrations with their competitors- companies that have overlapping product suites. IBM and SAP are challenging this model. This week, the two companies announced they will begin cloud-to-cloud product integrations starting with SAP’s Employee Central (HRIS) and IBM’s Talent Acquisition Suite. Although the two companies have had a strong alliance for 40 years, the news of this new level of integration and partnership came as a surprise to many of us.

Below are a few thoughts on what this acquisition might mean for HCM.

What This Means for the Market

  1. The Customer Comes First. Solution providers have been saying this for a long time. But how often does it truly happen that a provider thinks about the customer needs before its own business needs? This partnership does seem to be about the customer…providing companies with better data, stronger solutions and a more positive experience.
  2. You Don’t Have to Do It All. For so long, many of the large HCM providers have been going to market with a comprehensive suite. Checking every box of every single product to claim they do it all. What IBM and SAP’s partnership says is “we do some things well and we are going to partner with providers that do other things well to give our customers the best.” It’s honest.
  3. Services and Software Go Together. Companies today want both services and technology from the same provider. This partnership with IBM’s history of services and SAP’s commitment to HCM technology reinforces this message.
  4. An HCM Leader This level of integration will certainly change the HCM landscape and gives IBM and SAP a chance at the leadership position. Time will tell how this relationship will resonate and if the focus on the customer will stay in place.

-Madeline Laurano, VP and Principal Analyst, Brandon Hall Group

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Madeline Laurano