I, for one, have never liked humans being referred to as “Capital” or “Resources”; so, when Amy Wilson, Executive Vice President of Products & Applications Engineering for SAP SuccessFactors introduced HXM to replace HCM, I was intrigued. Most of my colleagues just seemed confused.

I think we’re confused for two reasons. One, it’s unclear if HXM is a new product. What does it mean? How do customers get it and how will it be licensed? Two, how big and important is this experience management thing for HR really? Does the investment in this technology make sense?

In conversations with Wilson, SAP SuccessFactors President Greg Tomb, and Chief Revenue Officer Stephen Spears following the keynotes, I had a chance to gain some insight.

HXM: Human Experience Management

Here’s what I understand about HXM:

  • HXM is not a new product.
  • HXM describes a platform of solutions (that would have formerly been called HCM solutions).
  • HXM aims to look at our functions—recruitment, onboarding, talent management, development etc.—from a holistic single-process perspective rather than in separate siloed modules.
  • In the HXM platform, experience data drives every module—from Employee Central and Employee Central Payroll through Recruiting, Onboarding, managing, developing, and compensating employees.
  • The secret sauce that has been added to the old HCM platform is Qualtrics for experience management and the marriage of X and O data.
  • Licensing for Qualtrics is separate from the rest of the SAP SuccessFactors products—at least for now. I think it’s safe to say that there may be packages in the future that include some Qualtrics standard reporting metrics in much the same way as SAP Analytics Cloud will offer some analytics baked right into processes in SAP SuccessFactors.
SAP SuccessFactors HXM Qualtrics
Amy Wilson presents how formerly separate HR modules integrate in the HXM Platform, with O and X data as the foundation of the Intelligent Enterprise. Photo courtesy of SAP SuccessFactors

What is X and O Data, You Ask?

To understand HXM, you need to first rewind to SAP’s $8 billion acquisition of Qualtrics at the beginning of this year. Qualtrics, the pioneer in experience management software, analyzes sentiments or the experience of customers and employees. This is “X” data.

We already have tons of “O” data – that is, Operational data – in our HR systems. By applying experience data to our HR operations, we can understand the root causes of employee dissatisfaction or misses in our processes.

Example. During the SuccessConnect keynote, Jay Choin, Executive Vice President of SAP Qualtrics, gave an example of how combining X and O data improved Qualtrics’ recruiting performance. Operational data showed that women had an 11% lower acceptance rate than any other group. Why? The experience data revealed the answer:

(1) female candidates were only interviewed by males, which gave females the impression that Qualtrics did not have a diverse workforce;

(2) females had a set of decision factors completely different from what Qualtrics was promoting to candidates and that impacted their acceptance decision; and

(3) who extended the offer mattered—the hiring manager was much more effective than the recruiter.

Knowing these three gaps allowed Qualtrics to adapt their behaviors and increase acceptance rates among female applicants.

HXM is Relevant Beyond Recruiting and Retention

The concept of employee engagement has been around since the 1990s but gained steam in the 2000s as studies identified a link between engagement and profit. Add to that the threat of a growing talent shortage, and the idea that employees must be engaged really took off.

Gallup polls show that 70% of employees would quit their jobs due to poor experiences at work. That disconnect from executives to employees is clear, as 69% of CEOs believe they are delivering a superior employee experience. Only 34% of employees agree.

But it’s not all about motivating and retaining talent.

We live and work in a fishbowl today where both positive and negative experiences are quickly exposed through social media. Glassdoor reviews are just one source of negative publicity. Workers—like those at Amazon—can expose a company’s unpleasant side, resulting in brand boycotts by consumers.

How Seriously Should We Take HXM?

What employees think and feel has been measured through survey data in the past. The thing is this: what happened with the survey data has been a little less clear. When experience data from surveys, however, is applied to operational elements, we can define a clear path to change, we can demonstrate that our humans matter beyond being just capital or resources.

The voice of the employee can be loud and clear in the marketplace and that puts employees in the driver’s seat with HR—in ways in which unions never mastered. Employers who take HXM seriously will have a competitive edge, not only in talent management but in business profitability as well.

Finally, this concept of HXM is the ultimate integration solution. Customers who were accustomed to the intricate integration of the SAP ERP on-premise, decried the lack of integration between the SAP SuccessFactors modules. HXM will deliver a new user experience that, for once, allows individual HR processes to function without interference or conflict from related HR processes but at the same time seamlessly integrates the processes in the user experience.

Watch the SuccessConnect keynote replay to hear Amy Wilson explain HXM.