Efficiently Handle Mergers and Acquisitions in SAP HR

  • by Satish Badgi, HCM Consultant
  • June 15, 2006
Depending on the nature of a merger or acquisition (e.g., company or line of business level), the challenges differ. I’ll outline several common scenarios in the HR submodules and tell you how to prepare for them.
Key Concept

While planning for a merger or acquisition, you should create a deliverables document to manage the process in SAP R/3. The document should analyze the structure of your enterprise and HR system and include several elements, such as a description of the legacy environment. Also, incorporate a blueprint document that establishes the actual migration of employees and data. You should follow a normal SAP HR blueprint format with more details about the legacy environment.

A technical document should cover data conversion, mapping, and cross-walk tables. The cross-walk tables (reference tables between SAP and legacy systems) are relevant for migrating enterprise, payroll, and organizational structures, as well as other employee groupings. Finally, a transition management document should contain a plan to merge the two employee populations. The transition management teams can utilize the SAP HR system as a common ground since SAP is the system of record in the post-acquisition phase.

Many SAP clients face the challenges of acquiring a new company or taking over a new business unit in their existing setup. Sometimes they have to assist a company that is acquiring them. Typically the HR and IT departments carry a large burden during this process. I’ll explain how to prepare for mergers and acquisitions, specifically addressing Personnel Administration (PA), Organizational Management (OM), Benefits (BN), Payroll (PY), and Personnel Time Management (PT).

The two merging organizations are likely to have different ERP environments, as shown in Table 1. On one end of the spectrum, both companies run SAP; on the other end, the merging environment may not even have a centralized ERP system. Your challenge in bringing the other environment to SAP HR/PY increases greatly if the merging environment is non-ERP with no centralized IT and HR processes.

Satish Badgi

Satish Badgi has been helping clients implement SAP ERP HCM and payroll for more than 15 years. He has been involved with large full-scale SAP ERP HCM and payroll implementations using the breadth and depth of SAP modules. Satish works for a large management and systems integration consulting firm and handles global payroll for clients. He has published two books on SAP payroll, Configuring US Benefits with SAP and Practical SAP US Payroll.

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