Moving your HCM to the Cloud? Key Considerations
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Key Takeaways
⇨ Organizations must prioritize cloud-based HCM solutions, like SAP SuccessFactors, to improve efficiency, scalability, and adaptability in response to evolving market conditions.
⇨ The end of mainstream maintenance for SAP ERP HCM on-premises is approaching, prompting companies to transition to more future-proof HCM solutions to avoid operational disruptions.
⇨ The SAP Customer Evolution program offers specialized tools and guidance for transitioning from SAP ERP HCM to SAP SuccessFactors, including the SAP ROI Calculator to evaluate costs and benefits.
“People” are a most crucial part of any company, just as profits and products. Any company’s success depends as much as on its people as on its core business processes. However, this requires companies to hire, train and provide the right sets of tools to their employees to drive a company’s productivity, innovation, and growth.
SAP ERP HCM, in the past, has played a crucial role in managing core HR, Payroll and Time management operations for organizations, however, it has associated complexities when it comes to HR operations like hiring, onboarding and managing talent in general. But organizations are increasingly understanding the benefits of moving their HR operations to the cloud.
Cloud is not just transformation, but it is transformative. From reducing architectural complexities to streamlining business processes, cloud has been instrumental in improving organizational efficiency, productivity and most of all agility and speed for organizations to adapt to fast changing market/economical conditions .
Modernizing operations through digital transformation is a game changer especially for Human Capital Management. For HR, transitioning from on-premises HCM solutions to cloud-based solutions like SAP SuccessFactors not only provides streamlined data management, advanced analytics and insights, scalability and easy access, but it also allows greater customizations and integrations and is a cost-effective option for organizations.
Key considerations for moving your HCM to the Cloud
End of mainstream maintenance of SAP ERP HCM on-premises: Depending on the version of your installed Enhancement Pack, the end of mainstream maintenance is in 2025 or 2027. Thus, as the end of mainstream maintenance for SAP ERP HCM on-premises solutions approaches, it becomes increasingly urgent for organizations to transition to a more future-proof HCM solution. A couple of considerations are important to take into account for your decision making:
The overall Strategic direction of SAP is cloud. Full stop. That is also reflected in the investment strategy for HCM solutions:
- With SAP SuccessFactors HCM, SAP is making significant, future-oriented investments that address the latest HR trends, deliver innovation to rethink and reimagine human capital management.
- With SAP HCM for SAP S/4HANA, SAP’s investment focus is on providing continuity for existing HCM on-Premise customers that cannot or won’t move to SAP Successfactors solutions before the End of Mainstream Maintenance of their current HCM on-Premise solution.
SAP HCM Core private cloud edition for existing HCM on-premise customers: For existing SAP on-premises customers needing or wanting to keep their existing HCM solutions, because they prioritize their ERP move to the cloud first, SAP offers SAP HCM Core Private Cloud Edition. This aligns with an ERP-led MOVE strategy, such as RISE with SAP, that allows organizations to modernize without disrupting their established processes, whilst keeping their HCM processes as they were for Core HR, Payroll and Time management to not obstruct the larger ERP move to the cloud.
This bridges the way for businesses that want to take a phased approach to address immediate (ERP) needs while putting a base in place on which the organization can then build further capabilities going forward. But in contrast to the speed, innovation and agility the move for ERP to SAP S/4HANA brings, for HCM this is only very limited.
Whilst benefitting of the move to the private cloud with the services provided by SAP, at the same time the HCM systems’ architectural design limits the ability to respond to fast-changing organizational requirements, as that is basically the same as it was in HCM on-Premise and therefore doesn’t take away the commonly experienced pain points of HCM on-Premise such as deploying effective Employee and Manager self service, mobile solutions and or changes to the existing processes and workflows.
Streamlining the journey to the cloud
SAP SuccessFactors Employee Central provides flexible, global core HR functionality that does help meet the expectations of your people and the needs of your organization.
To support customers in understanding and transitioning from SAP ERP HCM to SAP SuccessFactors HCM, SAP Customer Evolution for HCM aims to provide specialized tools and services to support your move. It lays down a clear path for customers by defining the value of SAP SuccessFactors HCM, understanding its capabilities, the transition and migration process, based on a product mapping that fits your organization and driven by an “MRI” of your current HCM on-Premise installation analyzing the results of the Readiness Check for SAP SuccessFactors solutions and the SAP ROI Calculator for moving from HCM on-Premise to SAP SuccessFactors.
Developed in cooperation with external agency (Enterprise Strategy Group) and based on based on customer interviews, industry benchmarks and customer research, the SAP ROI Calculator takes into account hardware, software implementation costs, maintenance and support costs and potential process improvement and productivity gains.
Find the SAP ROI Calculator HERE.