When it comes to payroll, SAP Customers have choices. This quick guide details the different variations and how to make the best decision with SAP HRIS technology.

Historically, Human Resources  was a back-of-house function with sympathetic counselors and a box of tissues at the ready. Today, HR (SAP HRIS) is part of the C-Suite, often referred to as the leaders who manage a company’s most important assets, its employees.

Without human resources management, companies would not be able to effectively recruit and keep employees, improve and enhance the organization, and they wouldn’t be able to maintain a healthy, accepting workplace culture and environment. Human resources management is so important to organizations that many call this department the heart and soul of a business. Emily Pribanic HR Tech Why Human Resources Management Is Important For Every Organization 2019

SAP Human Resources was launched as a module in 1986, and its world-class complex global payroll solution became the industry standard. The intricate design and its ability to calculate time, including retroactivity and global currency conversions, made it the solution for large employers.

Historically, Human Resources was a back-of-house function with sympathetic counselors and a box of tissues at the ready. Today, HR is part of the C-Suite, often referred to as the leaders who manage a company’s most important assets, its employees.

Without human resources management, companies would not be able to effectively recruit and keep employees, improve and enhance the organization, and they wouldn’t be able to maintain a healthy, accepting workplace culture and environment. Human resources management is so crucial to organizations that many call this department the heart and soul of a business. Emily Pribanic HR Tech Why Human Resources Management Is Important For Every Organization 2019

SAP Human Resources launched as a module in 1986, and its world-class complex global payroll solution became the industry standard. The intricate design and its ability to calculate time, including retroactivity and global currency conversions, made it the solution for large employers.

Since the acquisition by SAP of SuccessFactors in late 2011, the Human Resources and Payroll landscape began a major shift that continues today. It began with the word ‘cloud’. The picture above depicts my experience with the messages that came from SAP SuccessFactors regarding the movement to the cloud.

That messaging changed, sometimes becoming heavy-handed (in the image above, see ‘lighter’ messaging starting in approximately 2019 with ‘SAP is Cloud First but not Cloud Only’).

At the keynote of the SAPinsider HR2017 event, SAP shared cautionary tales of Kodak, Borders Books, and Blockbuster, expressing the sentiment, ‘Do not get left behind!’ and asked customers to commit to being ‘All in’.

It’s fair to say that the adoption of cloud technologies in the HCM and Payroll arena has been slower than in other areas of business. Payroll itself seems to be the last module to move to the cloud with other HCM functions like recruiting, learning management, and general HCM (SAP SuccessFactors Employee Central) leading the charge.

SAP SuccessFactors has continued to innovate and adapt to the marketplace, as shown in my timeline. Over time, it has been adaptable when facing resistance, continuing to give customers options to extend their investments, while providing a path to innovation.

SAP SuccessFactors has listened to customer feedback and adjusted its messaging (see Image 02 above) as well as its offerings (see Image 06 below). The ability to adapt and offer creative solutions, while embracing the latest technologies for continued advancement, remains a hallmark of SAP.

Let’s not get hung up on the word ‘cloud’

Putting sensitive employee data in the cloud could be a barrier for customers, but my belief is that reluctance is less about security– as we have all become familiar with storing and accessing our personal data in a cloud world – and more about understanding how day-to-day systems would process, who would maintain them, and the change to the organization and employee experience. Added on to that was the understanding of new licensing models and the deployment of a new front-end for HR in the cloud, leveraging SAP SuccessFactors Employee Central.

Whether it was a security concern or a resistance to adopting a new procedure, protocol, or system landscape, marketplace acceptance and adoption of the new SAP SuccessFactors cloud faced skepticism. It was not a simple transition to understanding, and the variations in the use of the word ‘cloud’ or ‘hosted cloud’ made it more confusing.

SAP SuccessFactors want their account teams and partners to provide tailored recommendations. To do this, they provide various enablement materials, including presentations, a decision tree, migration paths, and discovery questions.

The intent is a journey that makes sense for the customer based on their needs.

For some customers, it makes sense to start with Core HR and leave payroll on-premise. For others, a full cloud transformation is preferable.

As detailed in my timeline, I’ve documented how SAP SuccessFactors has accommodated its customers by offering different variations for their digital transformation. They’ve added new options over the years, including models for Talent Hybrid, Core Hybrid, and the new H4S4 option, available in Q4 2022 (see sample below).

Changing terminology and support ‘end dates’ have challenged customers, and key benefits and opportunities for innovation were lost.

Below, I provide a simple, high-level understanding of the more popular options for SAP SuccessFactors HCM and Payroll solutions. There is no ‘one size fits all’, so I hope that you start with the basics and work with your SAP AE and/or partner to develop a transition plan that works for you.

The five most common options for SAP SuccessFactors Payroll

If you are still reading, you’re either looking for the best payroll in town, or you’re one of the existing ~ 9,500 SAP Payroll customers planning their next steps in their HCM Digital transformation. Starting in Q4 of 2022, SAP customers will have at least five options for world-class SAP Payroll, as detailed in the table below. I say ‘at least five’ as there are so many more options for customers, including outsourcing their SAP via Partners and other creative solutions. However, the most common ones I’m asked about are below.

Future product: Next generation cloud payroll from SAP SuccessFactors

Whenever I engage in discussions with customers about their options for payroll, I am always asked about the next generation cloud payroll from SAP SuccessFactors. SAP SuccessFactors is building a next generation cloud payroll, but it will not be widely available anytime soon and is not listed as an option here. There have been no formal announcements regarding SAP SuccessFactors’ next generation cloud payroll and any mention of it has been simply a reminder that there is ongoing development that continues in this area. SAP SuccessFactors is innovating in all areas, every day, and cloud payroll is no exception. Those curious about it can review this blog: SAP SuccessFactors Next-Gen Cloud Payroll.

How should an organization decide on their path for digital HCM transformation?

As I mentioned before, there is no ‘one size fits all’ solution as each company has its own needs, drivers, protocol, and directives. What we can look at is the motivation for the organization. For example, are they committed to innovation? Do they want to take advantage of the latest improvements that SAP SuccessFactors has to offer? Do they wish to outsource their hosting? Have they outgrown their database?

To get started, SAP SuccessFactors publishes a guide that is helpful in decision making available here: Human Experience Management: Considerations for Migrating from SAP® ERP HCM Payroll to SAP® SuccessFactors® Employee Central Payroll