The majority of firms, maybe even the vast majority, use HR as for defensive purposes. When enforcement and risk mitigation are HR’s primary concerns, it’s pretty hard to make the case that more business-y functions belong in the Department. (See last week’s The Limits of HR
).

There is no ‘proper’ role for HR. As a staff function, it’s more likely to be a reflection of the company’s culture than it is to be the driver. The SuccessFactors segmentation works when client cultures are sales driven or growth centric.

That means a several things for SuccessFactors:
1. That they will be competing directly with Mercer, Watson et all for business that expands beyond traditional HR roles;
2. That the size of their addressable market is diminished by their core value (Business Execution)
3. That the alignment with SAP is particularly imperfect (which is likely to be the reason that this positioning is rearranged)
4. That they have a greenfield opportunity beyond the HR market.

All in all, I like the prospects for SuccessFactors success but don’t think
they really grasp the challenge and complexity of the SAP relationship. Not
very many companies have been able to convert success in HR to success in
other dimensions of the organization. They are more likely than most to
succeed.

But, it won’t be because they institutionalize “Business Execution” across
the HR Market. It will be because they begin to establish beach heads in
other administrative functions. (In other words, they are charting a path
that looks like the way that Saba should be marketing itself.)