Global Human Capital Management (HCM) implementations are becoming more common as companies begin to find more and more ways to use HCM intelligence data worldwide. However, even for the most experienced SAP professionals, the prospect of mobilizing global resources across time zones, countries, and languages for any purpose can be daunting.  

You can decide what the best route is for your organization by reviewing the pros and cons of three typical rollout approaches. I’ll help you define the key success criteria for your implementation.

Types of Implementations

There are three general approaches to a global HCM implementation:

1. Big bang – all countries/all modules at once with single go-live
2. Phased by functional area – all countries go live with a small, focused scope of modules
3. Phased by geographic locations – selected countries phased in by regional clusters or other defined grouping

You can also mix and match strategies from each of these approaches to further meet your organization’s requirements.

Big Bang

A big bang strategy is often the first strategy organizations consider, although it can be a high risk approach depending on size and scope. I recommend that only very small global organizations that are looking for simple data structures or a scope-limited global footprint consider this type of implementation (Table 1). Organizations typically take several shortcuts to mitigate cost and risk. However, many times they make the following scope and or cost analysis decisions without realizing the full impact on the project management and delivery: 

• Forcing a single global language and texts such as English
• Grouping country configuration within molga 99 or regionally into larger country codes (MOLGA in SAP)
• Heavily limiting scope to core HR (Personnel Administration [PA]/Organizational Management [OM] for example) and ignoring data conversion and ABAP development needs
• Heavily limiting testing and training efforts

Table 1

Pros and cons of a big-bang rollout

In my opinion, a big-bang strategy should typically be avoided by all but the smallest organizations and should be avoided completely by large organizations.

Phased Functional

A phased functional rollout (Table 2) is typically a fitting strategy for organizations that:

• Are aiming to baseline core SAP ERP HCM data globally for reporting and business intelligence analysis
• Are not able to consolidate payroll or time systems globally in tandem in the short term due to contract terms, risk tolerance, or other reasons
• Are not well aligned in general HR processes globally yet
• Have a highly fragmented (or otherwise complex) business systems architecture globally and need to first focus on consolidation of primary source systems and data  

Table 2

Pros and cons of a phased functional global rollout

Phased Geographic 

A pure phased geographic rollout is a less common primary strategy, but typically becomes a secondary strategy in a phased functional rollout for medium and large organizations faced with trying to implement global HCM systems and having to consolidate payroll, time, and other dependent processes and systems in parallel (Table 3). The usual scenario is that one or more major regions of the organization are searching for new solutions in other functional areas and this is rolled up into the global HCM initiatives. 

It also occurs in organizations in which the global headquarters country is not the largest region in terms of headcount or revenue generation and the larger region implements HCM to satisfy its own local needs. Even in this instance I recommend the solution also be globally scalable.

Table 3

Pros and cons of a phased geographic rollout

There is no one-size-fits-all approach but the general preference for medium and large organizations is typically one that is a hybrid of a phased functional and phased geographic approach led by a pilot rollout in a major region.

Glocal Design

The SAP ERP HCM system implementation should be preceded by global HR process design at least in a very basic form. Some common parts of HR are much more easily globalized partly or in full than others in a functional and technical design:  

• Basic HR functions: hire, terminations, leave, transfers
• Limited benefits plans
• Bonus schemes
• Base salary and wage schemes
• Talent Management (recruiting, learning, performance management, succession planning)

There are also areas that are almost hopelessly regional and country specific (local):

• Net payroll: taxes, legal pay elements
• Benefits
• Time evaluation

• Forms and reports (such as pay stubs, compliance reports, or performance reports)

Define Reports and KPIs

Define the global key performance indicators (KPIs) that are usually among the key business drivers at an executive level. Besides creating valuable reporting for the company, this gives you an additional guideline of what information should be gathered with the global HR system. These are some common ones:

• Internal transfers
• Turnover
• Average duration of hire/employment
• Diversity
• Service years
• Length in position
• Internal/external
• HR per employee ratio
• Percentage of voluntary turnover (and reasons)

Global Template Design

Several articles related to global SAP ERP HCM template design are available on SAPexperts, including the following:

• “Considerations for Defining an SAP HCM Global Template”
• “Avoid Global Implementation Pitfalls with a Well-Defined, Strategic Global Template”
• “6 Tips for Going Global with Extra Savoir-Faire”

The template design should focus on the core configuration of SAP ERP HCM related to PA, OM, security, and technical naming conventions.

At the very basic level, the data template should support all local legal compliance needs through employee-type groupings and employee-specific location and legal entity designations. In SAP terms that mean globally agreeing on use of, and a set of values for, employee group, employee subgroup, personnel area, personnel subarea, and actions data elements primarily. Finally, the SAP ERP HCM data design should support those KPIs and global reports defined in the previous step.

Template Localization

Localization refers to the process of determining country-specific needs and gaps with the global scope and supplementing the global design with a country-specific design. The key activities performed during localization are:

• Localization workshop to create the country-specific business blueprint. The functional experts and country leads are in charge of coordinating and leading the session. Specific subject matter experts (SMEs) are expected to participate during these sessions.
• Customizing: Local functional expert should be in charge of the regional/country specific configuration with guidelines from the core team, which is responsible for the design and development of the global template.
• Data migration: Local resources should coordinate, verify, and provide the data for data migration. The core team should provide detailed instructions and templates.
• Training: Local functional expert should provide training sessions based on core team materials and additionally, is expected of them to cover the country specific matters.
• Testing: Local and core teams work together during unit testing and integration testing. Local functional experts should formalize the user acceptance testing, coordinate sessions, and provide assistance.
• Go-live preparation and support: Assist the country during the transition phase.

Leverage Global Delivery

It’s easier to globalize certain roles than others. Below is a list of those items best suited for centralization during and after implementation:

• Building global prototypes and  templates for the rollout
• Configuration of business processes
• Project-related development of Forms , Reports, Interfaces, Conversions and Enhancements (FRICE) and workflow
• Technical installation of SAP software and Solution Manager
• Authorization and security 
• Data migration
• System migration (OS/DB, Unicode)
• Technical administration
• Post go-live application management
• End user documentation

Critical Success Factors

Here are some factors that lead to a successful rollout:

• Involved executive sponsorship is required.  Otherwise the compromise (or lack thereof) between global HR organizational leaders on policy changes becomes problematic.
• Efficient and well-communicated global change control process among workstreams
• Do not offshore “too much.”  Recognize the tradeoff between cutting costs on development and increased local workload. Effect of time zone differences on time to completion is almost always underestimated.
• Because ABAP developers and Basis support are most mobile and active globally, be sure to focus particularly on staffing these roles effectively and then closely monitoring delivery.
• Be careful not to make the design so complicated that small countries have an incentive to circumvent the system and enter things directly in the local Payroll systems (if not on an SAP system).
• Remember you are implementing a foundation, not delivering all requirements for all countries and all users. Stick to what is truly legally required. Put "nice to haves" and streamlining in a subsequent phase.
• Don’t forget the change management effort in the planning and execution before go-live!