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The company, which specialises in enterprise software, human resources (HR) and data analytics technology, will ensure that only technicians in Europe will have access to potentially sensitive data held in its cloud datacentres, if companies demand it.
The move follows a growing focus by businesses on data sovereignty, as awareness of the risks of state surveillance and regulatory pressure to safeguard data increase.
SAP said it is not enough to guarantee data security by storing data in European datacentres if businesses have to turn to the US or Asia for technical support, which might expose their data overseas.
Thomas Otter, a group vice-president for product management at SAP’s HR software operation, SuccessFactors, said a number of organisations use the service to guarantee that their data does not leave Europe.
“There is a lot of talk about privacy laws and data protection laws tightening up. People are focusing on where the server and software live. You can have your sever in Paris, but if your support person is in Tunisia then your data might as well be in that country,” he said.
The company took a decision in 2015 to “beef up” its European support services offered out of Hungary, for companies that had concerns over data protection issues.
“If there is a situation where we need a person from outside Europe to support a particular product – for example, if there is a programme developed in America that needs support – we ask the customer’s permission for that engineer to do that work, so most of the work can be done in Europe,” he said in an interview at an industry conference.
The question of data sovereignty has created particular headaches for multinational companies with employees in Russia, following the introduction of a law that requires companies to store all data on their Russian employees in datacentres in the country.
“Let’s imagine for a moment that China passes a similar law, that Brazil passes a similar law,” said Otter. “What does that do for the long-term architectural model of companies’ HR systems?”
From Russia with love
SAP has worked closely with a number of large multinationals to develop technology that will store HR data in a Russian datacentre, then automatically replicate it to HR systems outside the country.
“The data is still in Russia, but if the Russian government wants to subpoena the data to get access to it under Russian law, they have access,” said Otter, during an interview at HR Tech World Congress in Paris.
Around “half a dozen” multinational companies have been testing the technology, which will eventually be offered by SAP more widely to other businesses that keep HR data in Russia.
Brexit may lead to ‘Privacy Shield’ agreements with Europe
The prospect of Brexit may lead to further data protection challenges, which might include the need for the UK to negotiate Privacy Shield-type agreements with countries in Europe, to permit the free flow of data between states.
“In the past three years, there have been three major potential disruptions to HR technology in Europe. The first one was the Scottish referendum, the second was the threat of Greece exiting Euro and the third one is Brexit,” said Otter.
The most interesting case, said Otter, was the threat of Greece leaving the Euro and adopting its own currency.
SAP had to work out how to re-develop payroll systems operating in Euros, with technology capable of paying salaries in a new currency, in a matter of weeks.
With Brexit, its too early to say what the consequences might be. Otter said SAP discussed the matter with regulators worldwide, and would be ready to adapt its services to meet the legal changes that would follow Britain leaving the European Union (EU).
“At the moment, it’s pure speculation what the impact of Brexit would mean,” he said.
How SAP is using HR technology to improve diversity
SAP is redeveloping its HR technology in a drive to help businesses improve the diversity of their workforce.
The company has made it a strategic priority to use its technology to help companies ensure that they do not discriminate against male, female or employees from ethnic minorities.
“We are going through every single product and asking how it helps with diversity,” said Otter.
Part of the mission is for SAP itself to recruit more women and ethnic minorities into its own workforce, in an industry that has historically been dominated by white middle-aged men.
The company is using machine learning software to analyse job descriptions for phrases which may deter women or diverse ethnic groups for applying for jobs in the technology industry.
“If 70% of people apply for jobs are men, you are never going to have a diverse workforce,” said Otter.
The same technology can also be used to detect unconscious bias in the way managers perform annual performance reviews.
“Men write differently about male colleagues than female colleagues and women write differently about male colleagues. We have the ability to detect that bias and interact with it before it happens,” said Otter.
The software is capable of detecting patterns in employee absences which may indicate that some groups are being treated differently to others.
For example, if a women has been receiving consistently high scoring performance reviews until she goes on maternity leave, and then finds she receives low performance reviews afterwards, that is a clear appraisal issue, said Otter.
Otter points out that many of the most influential people in IT were women, but they have been “airbrushed out of history”.
Women, for example, were responsible for writing the software the drove the moon landings, were responsible for the development of the car industry, and for writing the first computer programmes.
“We want to make an industry that is inviting to women and minorities and celebrates entrepreneurs and innovators,” said Otter. “We need to admit the problem and fix it ourselves in the software industry.”
The company is working with an advisory board of 12 businesses to help it tackle diversity. “I want it to be an industry our wives and daughters work in it,” said Otter.
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