AJ Whalen, Senior Research Analyst, HR, SAPinsider spoke with Imran Sajid, Director HXM Solution Marketing, SAP during an SAPinsider webinar on Thursday, May 7, 2020 to review the findings of a recent SAPinsider benchmark study that looked at customer payroll strategies and practices – including the solution landscape and technologies they use – to understand the top issues facing payroll organizations and executives. Following the webinar Whalen and Sajid answered questions from the audience. Q: Can you talk a little more about SAP’s plans to support SAP Human Capital Management for SAP S/4HANA, on-premise edition until 2040? A: Initially, in a 2018 announcement, SAP indicated that we planned to deliver SAP Human Capital Management for SAP S/4HANA in early 2023 with a commercial requirement to carve out to run HCM in a separate instance (you’ve probably heard the term sidecar). Based on feedback from customers SAP made the decision to allow customers to co-deploy SAP HCM for SAP S/4HANA in a single instance SAP S/4HANA environment, and this will be supported until 2040. We plan to have SAP HCM for SAP S/4HANA delivered in Q3, 2022, which is sooner than previously indicated in our 2018 announcement. I want to clarify that this isn’t a new HR or payroll product, this is very much what you have now. This is your existing code base and we’re just going to do some enhancements, take advantage of the fact that you’re on a HANA system, and identify how that can work better with payroll. SAP’s blog provides more details on the solution and our overall strategy.   Q: Do you think a decent portion of the registered object enhancements that you discussed during the webinar could have been handled through a custom rule or object instead? A: I do. In many cases, if you look at our on-premise customers, they might have implemented this 20 years ago and some of those standard configuration objects and flexibility probably weren’t there. They may not have had as many business add-ins when they first did it, so I think people either had to, or in some cases just didn’t know of a better solution. You could absolutely revisit those and move them to a more standard object. If you haven’t made the business case of moving to ECP it’s always a good time to just try to standardize. The more you can standardize and get to less code conflicts, the better. A more standardized system is nothing but a good thing from a long-term ROI point of view.   Q: How has COVID-19 impacted the pace of change in payroll and how does that affect the business case of moving from on-premise to EC Payroll? A: People are using this time to evaluate. Customers are facing different business challenges, such as needing to hire a lot of people and quickly get them into their landscape so they can be paid. Depending on the processes that a business currently has in place, that can be painful or it can be somewhat streamlined. SAPinsider’s State of the Market: Payroll and Its Impact on Cloud HR benchmark report reveals that process performance as an efficiency is one of the top things driving respondents’ payroll strategy. Companies still have to pay their employees regardless of the type of transaction that’s occurring, but they’re doing it with fewer resources or remote resources. This is causing companies to really look at the technology they have and consider where there is room for improvement. Customers are also looking at their technology overall. We’re in a new normal so we’re seeing a pause as people adjust to their current landscape. Furloughing employees, for example, is something that some businesses haven’t had to do in 10, 15 years, so they may not have those furlough actions in their landscape. In this case they’ve needed to quickly add those in and test them on a mass scale. I think this could impact the business case for moving from on-premise to EC Payroll, as well as the fact that right now many businesses are experiencing processes that are not streamlined and that are causing a lot of errors and prompting companies to revisit priorities. That may mean adjusting the existing system and optimizing it for some companies, while for others it means looking at how they can take a holistic approach to their business case, including looking at recruiting processes, core HR, and processes for hiring, because payroll is not in a silo. Starbucks, for example, has changes their compensation model. The company is paying people even if they’re not working. That has an impact on how things come in from a time and attendance standpoint and feeds over to payroll. It’s difficult to answer to provide an answer to this question right now because it’s likely different for every business.   Q: What is the best way to get our arms around planning for a move to ECP? Is it through our SAP account rep, accounting partner, learning hub? A: There are different layers to this answer. From a technology standpoint I think a good way to get your arms around a move is looking at standardizing. If you have custom objects look at how you can move that. From a more strategic standpoint, start looking at some of the decisions that need to be made. It’s always important to get insights from your consulting partner as far as making that business case.   Q: What is your take on the findings in SAPinsider’s report? A: SAP has also seen the trends that are outlined in the report; payroll isn’t the first one--it’s more likely the third one in a wave of three between talent, core HR, and payroll. The results show that. I’m not surprised by the report’s findings. I think there are a lot of terrific details in the report. Download the report to:

• Learn where HR and Payroll organizations are with respect to companywide payroll function ownership, processing strategies, and technology adoption
• Understand the factors that are driving customers to adopt new payroll platforms, including cost mandates, business process goals, and efficiency targets
• Learn which payroll platforms – on-premise, cloud, or fully outsourced – customers are considering and which process improvements and tools are helping them meet efficiency goals