PepsiCo’s Mid-Project Move from SAP On-Premise HCM to SuccessFactors

October 07, 2016 by Craig Powers

PepsiCo is going through a company-wide transformation, and Shakti Jauhar, SVP of global human resources operations and shared services at the food, snack and beverage giant, is focused on updating HR technology and processes as part of that transformation. That push includes installing most of SAP’s SuccessFactors modules, including Employee Central as the core HR system of record, in 80 different countries. The HR change is based on six key concepts: business agility, strategic workforce planning, the pursuit of readiness, gathering and using data, the learning organization, and talent management stability, according to the PepsiCo executive.

“You can’t just pick up what you are doing today and move it into the cloud,” Jauhar says during a presentation at the HR Technology Conference and Expo in Chicago this week.

Before PepsiCo even began thinking about implementing SuccessFactors, it had embarked on a project to implement SAP HCM on-premise in 2012. The company began with the U.S. and Canada, rolling out “vanilla” HCM on-premise for 120,000 employees before deciding it wanted to make a change and move to the cloud for over 250,000 global employees.

“We flipped from SAP on-premise to Employee Central,” says Jauhar. “If we continued to implement [SAP on-premise HCM] around the globe, we would be obsolete before we were done.”

With that motivation, PepsiCo began a project to roll out SuccessFactors to 78 countries outside of the U.S. and Canada, which hadn’t yet rolled out the HCM on-premise. The organization is now working on implementing Employee Central and most other SuccessFactors modules in the U.S and Canada with a target date of January 2017, save for payroll, which will remain on-premise. The payroll will be connected to Employee Central.

SuccessFactors does have productized integrations for connecting to on-premise SAP systems, but Jauhar says those don’t always meet every specific need.

“Not all requirements will be met with productized integrations—you will have to work on that,” he explains. “My advice is to do these [integration] requirements right up front—and give SAP and system integrator teams enough time to do this.”

For example, Europe has tougher payroll laws than most regions. There, Jauhar says PepsiCo consolidated payroll to one or two providers and used Dell Boomi to interface—all of this work required going through government councils for approval. “It can be done, data privacy can be solved,” he adds.

The Five Phases of HR Ops Integration

Moving from one large project to another so soon wasn’t without its challenges. As part of an overall processes change to go along with the SuccessFactors project, Pepsico established an HR operations group to bring together the disparate teams who have previously worked on the department functions—combining the new HR operations with existing HR.

This meant dealing with the “five steps of integration,” Jauhar says. First up is “denial” or the belief that HR operations won’t make HR better. “We already manage [HR processes], why do we need [HR operations]?” was a common question. Then there is “hidden rejection” where employee is passive aggressive in their approach to the new operations team and new software implementation.

Next comes the “occasional leap of faith,” and that’s where Jauhar’s team had to find individuals who were buying into the new software. “You work with them to move the needle on adoption,” he says. Then, there is the “quest for confidence” when employees become willing to embrace the move.

Finally, the fifth phase is “holistic awareness” when employees realize that change isn’t going to happen overnight.

How did PepsiCo move through these five steps? Jauhar says it required a “tremendous amount of work.” Showing business value was key, as well as setting the right, achievable and relatable goals. Talent is also important, and PepsiCo has an all-comers approach when it comes to hiring for HR operations. Jauhar says most people in the organization don’t have backgrounds or education in human resources.

“How do you find [the best talent]?” he asks. “It is hard, but you have to find those people who are jumping through hoops and want to do something new.”

In the end, the most important thing for PepsiCo was to keep in mind that the HR transformation journey was not just about new technology.

“This wasn’t just about the system, this was about how we operate HR globally,” says Jauhar. “Our team is really smart and we are going to redo HR in a way that works best.”

Photo at top of article: Shakti Jauhar of PepsiCo (right) speaks with Mike Ettling, SuccessFactors president (left), at the HR Technology Conference and Expo in Chicago