Based in Germany, SAP is an Information Technology and Digital Communication company with 107 thousand employees and $31 billion in revenue. As a global leader in enterprise applications and business AI, SAP stands at the nexus of business and technology. For over 50 years, organizations have trusted SAP to bring out their best by uniting business-critical operations spanning finance, procurement, HR, supply chain, and customer experience. SAP's skills transformation journey shows a step-function improvement of SAP’s operations, competitiveness, employee engagement, and customer success. Combining strategies for gaining buy-in from complex stakeholder groups, and efforts to sustain and maintain the skills taxonomy are central to SAP’s Skills Transformation journey.

Approach and Actions

SAP’s skills taxonomy governance model is built on three pillars: leveraging data, streamlining maintenance processes, and executing change management. A data-driven approach played a critical role in eliminating biases toward existing taxonomies within individual business units. This involved rationalizing over 6,000 skills to fewer than 2,000 by removing inactive and low-utilization skills, unifying three proficiency scales into one, benchmarking against industry standards, and using Generative AI to identify overlaps and similarities. For instance, project management skills across teams were consolidated using similarity scores derived from Large Language Models.

To streamline maintenance, ensure consistency and maintain a skills based-focus, SAP established a centralized process for maintaining a unified skills taxonomy and modernizing the global job architecture. For instance, a global program team was set up to spearhead the transformation at organization level. Reporting to the Chief People Officer, this team included representatives from major business lines to ensure alignment on a centralized skills taxonomy.

Gaining buy-in was equally critical and involved early engagement and demonstrating value. A program team comprising of ‘skills library owners’ from each major business line was initially tasked to create a unified vision and ensure active contribution. SAP also emphasized the individual and organizational benefits of maintaining skills in its Human Capital Management system. Using market and internal examples, organizational leaders were shown how a robust skills taxonomy could enhance competitiveness and customer success, while employees were shown its impact on their learning, growth, and compensation. SAP avoided overly defining a skills-first experience, recognizing the skills-first approaches thrive when employees are open to explore how skills transparency affects their learning opportunities and career development.

The sustained adoption of the skills taxonomy relies on two key areas: pilot projects and robust technology infrastructure. SAP initially focused on driving adoption through a specific use case, such as learning plans for workers and organizations, before scaling to broader applications. To maintain relevance, SAP built an intelligent framework that updates the taxonomy two to four times a year. Broad adoption across business units is crucial to ensuring sustainability. Furthermore, SAP acknowledged the need to maintain and continuously evolve its skills and associated systems and transitioned the skills taxonomy from a program within HR to a permanent function with a dedicated team that continuously evolves it as a product or solution.

Key Lessons Learned 

SAP's approach to skills transformation highlights the importance of organization-wide transformation and change management. This includes proving the value of skills transparency initially via learning recommendations, while planning to expand to other use cases such as strategic workforce planning and talent acquisition etc. A key driver of success for change management was championing the vision through a network of champions representing each major line of business.