SAP on Tuesday announced it had made a multimillion-dollar investment in Nakisa, a Canadian developer of software applications used to visualize employee depth charts and develop succession-planning strategies.
In addition to the cold, hard cash, SAP also inked a global reseller agreement to sell Nakisa's OrgManagement and SuccessionPlanning applications (renamed as SAP's Talent Visualization by Nakisa) as part of the human capital management (HCM) (define) module within its core ERP (define) software suite.
The investment, which SAP said is between $1 million and $10 million, was funded by the SAP NetWeaver Fund, a $125 million war chest set aside by the German software firm to invest in companies and applications built on and supported by its bedrock NetWeaver middleware platform. Since its inception in May 2006, SAP has now made a total of five similar-sized investments in companies including Questra, ArisGlobal, Visiprise and Conformia.
Roughly one-quarter of SAP's 43,000-plus customers are running SAP's HCM application, SAP said.
"Our customers are looking for end-to-end solutions and ISV services are a critical component," Kevin Ichhpurani, vice president of SAP's Global Business Development group, said in an interview with InternetNews.com. "We're committed to open ecosystems of ISVs that can contribute to the platform. Were looking for gaps in the 28 different industries we service that we can fill with our partners through these investments."
SAP found a gap that Nakisa could fill in the human resources department.
Its OrgManagement software is a multilingual, Web-based data visualization and modeling application that connects to a company's HCM and ERP systems and displays the employee information as an organizational chart, directory or floor plan. Its SuccessionPlanning application provides analytical tools to help companies make hiring decisions and develop real or hypothetical succession planning programs for top-level executives.
Talent management and, especially, succession planning have become increasingly important to large companies in the face of increasing compliance standards and the costs of on-boarding and off-boarding employees in the enterprise. For publicly traded companies, succession planning is considered a corporate governance issue because shareholders have a right to know of all material information that may affect a company's current and future performance. Havingor not havinga plan in place to replace a superstar CEO when he or she moves would surely have an impact on the company's performance.
"We're seeing huge growth in the talent management area," Ichhpurani said. "Employee retention is becoming more and more important and we're really feeling a push from our customers for succession planning solutions."
Last year, a study by the Society of Human Resource Professionals (SHRM) found that companies spend or lose an average of $4,745 for each new employee hired. These costs include time spent by recruiters and managers sourcing and screening candidates, time and costs spent training new hires and all the other minutiae required to get new employees up and running so they can actually do their jobs.
In June, BearingPoint and Oracle launched an On-Boarding and Off-Boarding Diagnostic application to streamline the process. The software incorporates business process management and human capital management applications through Oracle's Fusion middleware in a service-oriented architecture (SOA) to bring clarity and structure to a process that impacts multiple business units within every enterprise.