Can Qualtrics Transform HCM Into HXM?

SAP said goodbye to Human Capital Management and is embracing Human Experience Management. HXM is basically HCM in the cloud with Qualtrics’ experience management system added into the mix.

Both co-CEOs seem to be convinced of Qualtrics. Jennifer Morgan has been travelling to SAP’s business partners all over the world with Qualtrics CEO Ryan Smith in tow. After Christian Klein had visited Qualtrics in Utah, USA, he came back praising the company’s spirit, performance and functionality.

In theory, Qualtrics seems like the ideal addition to HCM. There is only one problem, however, and it was Christian Klein himself who brought it up: Qualtrics’ programming model is highly complex, making a traditional integration with SAP’s systems almost impossible.

Qualtrics is doing its own thing

Qualtrics’ revenue is increasing and showing no signs of stopping – especially since Qualtrics’ sales teams now have easier access to SAP customers.

Ryan Smith said he was on cloud nine, mentioning during SAP’s special Capital Markets Day in November 2019 that since SAP acquired the experience management company, he has been talking to more top executives about his product than in the ten years that came before.

For SAP customers, the metamorphosis from HCM to HXM will only turn out to be another eternal construction site. There won’t be an easy fix for the integration. Consequently, customers will have to create their own interfaces.

Meanwhile, Qualtrics will remain successful – but without any attachments. Even though SAP acquired the company, Smith, Morgan and Klein still all talk about Qualtrics like a separate entity. This will result in Qualtrics leveraging the vast SAP ecosystem to its advantage without really being part of the community or its parent company.

I’m convinced that if SAP goes down this road – trying to incorporate Qualtrics’ experience management into HCM to turn it into HXM – it will fail. And then, SAP will announce another round of consolidation and layoffs to stay competitive at the expense of customers.