SAP Software Integration Brings in the Contingents

Managing contingent labor should be a whole lot easier now that SAP has integrated SuccessFactors and Fieldglass.

“When SAP acquired Fieldglass last year, it was a big deal,” said Chris Dwyer, vice president of operations for Ardent Partners, an advisory firm in Boston. “It made it possible for total talent management to become a reality.”

It took 18 months, but in November, SAP announced the two systems had been officially integrated, which means users can now upload all of their contingent labor data from Fieldglass into profiles in SAP SuccessFactors Employee Central, enabling HR leaders and management to get a single view of the workforce. “This integration will bridge the gap between full time and external employees,” said David Ludlow, group vice president of SAP Labs. “From a human capital perspective, these two worlds are finally coming together.”

This is a huge step for contingent labor management, Dwyer said. In most companies, contingent labor is managed by the procurement team, separate from the human resources team and human capital management systems.

That leaves HR leaders in the dark about who’s doing the work, what they are being paid, and what talent and expertise they have in their network. These challenges are compounded by contingent labor compliance laws that bar things like performance reviews or creating contractor databases to track the work that these nonemployee workers do. “There is so much information on both sides of the house,” Dwyer said. “They need to be able to blend it to make better talent decisions.”

It is especially important considering the rapid growth of contingent labor in the workforce. Ardent’s research shows that the percentage of the workforce that is contingent has grown to 35 percent in 2015 from 15 percent in 2009; and Dwyer predicts that number could hit 50 percent by 2019.

That’s exactly what SAP is promising with the integration. It will allow companies to manage their total workforce under a single, centralized capability, while still keeping contract and employee labor distinct. Every one of our customers is concerned about bringing these two worlds too close together,” Ludlow said. “So we purposely kept some separation between the two groups.”

For example, establishing contracts and making payments are still the responsibility of procurement. Contractor data are also tagged so there is a clear distinction between the two groups, however that data can now be viewed side-by-side with full-time labor so companies will be able to see where their talent lies, and to analyze talent data more holistically. “It eliminated the gray area.”

This holistic view will allows companies to do things like determine the best experts for projects, analyze annual spending on contract vs. salaried employees, and to search for knowledge experts across the entire talent network. “Now HR doesn’t need to call procurement every time they have a question about a contractor,” Dwyer said.

Though he cautions that this won’t be a plug-and-play solution. While the systems are integrated, the data in each looks very different. “It will take time to cleanse and classify the data, and then to figure out what reports you need and what the output looks like,” he said.

And somebody will need to spearhead this effort. Dwyer noted that no single person is in charge of merging these two disparate worker groups, but someone will need to start that conversation. Ideally, HR will reach out to procurement and finance and get the ball rolling as they have the most to benefit from this integration.

“Talent is evolving, and HR needs to do what it can to find and engage all sources of talent, whether full time or contract, so they can respond to talent needs as they arise,” he said. “It will take time, and there are still a lot of questions, but in the end it is going to be awesome.”