Your Guide to Moving from SAP ERP HCM On Premise to the SuccessFactors Cloud: Concerns and Considerations

  • by Satish Badgi, HCM Consultant
  • July 13, 2016
When companies are deciding whether to transition their on-premise SAP ERP HCM system to the SuccessFactors cloud platform there are many complex scenarios that should be considered before making a final decision. Using two different on-premise scenarios, and evaluating the drivers of the transition, learn about the different factors that should be weighed when moving to an SAP SuccessFactors cloud environment.
Learning Objectives

Reading this article, you will learn:

  • About the options for moving on-premise SAP ERP HCM to cloud HR (SuccessFactors)
  • Key points to consider before and during the transition
  • How to handle challenges that arise when moving from on-premise SAP ERP HCM to SuccessFactors modules
Key Concept
Traditionally, SAP ERP HCM implementations are more IT driven, rather than being focused on the end HR processes. However, HR teams want implementations to be more HR-process focused. The transition from on-premise SAP ERP HCM to cloud-based SuccessFactors does just that. SuccessFactors’ easy-to-use processes, mobile apps, and analytics help HR teams create an employee-friendly HRIS platform. This transition helps save the IT costs while creating the desired HR-centric platform.

Many companies that are running SAP ERP HCM on premise are evaluating their options to transition to the SuccessFactors cloud platform. These implementations include combinations of core HR, Talent, Payroll, and Benefits as well as Time Management modules and functionality. This decision is driven by various considerations in individual business cases, such as gaining newer cloud technology, reducing IT costs, providing a better employee/user experience, adopting leading business processes, reducing traditional in-house maintenance (such as SAP ERP HCM Support Packages), and reducing the number of customized solutions that are required.

HR and IT leaders have obvious concerns about undertaking such a large transition project, and they are apprehensive about the impact of this change and its effect on budgets. Where there are applications such as Payroll, Benefits, and Time Management in scope, there are concerns about the impact on employee critical functions (for example, ensuring that payroll is delivered accurately and in a timely manner).

These considerations and challenges can have an adverse impact on timelines and plans for the transition. Some standard questions, such as What? Why?, When?, and How? need to be answered before moving to the cloud. The current landscape of SAP and non-SAP HR applications also drives the answers and decisions made during this transition.

I discuss two different scenarios for moving to the SAP SuccessFactors cloud:

Scenario 1 – Transitioning all SAP ERP HCM on-premise applications and modules to a cloud HR system. This scenario covers the options for moving all on-premise modules such as core HR (typically employee master data with associated organization structures), Talent, Compensation, Payroll, Benefits, and Time Management to the cloud. I discuss the available functionality in the cloud and the options that are available. (You need to continue to check release notes since SAP continues to enrich the functionality with every quarterly release.)

Scenario 2 – Moving only core SAP ERP HCM on premise to the cloud, with a combination of third-party and outsourced applications and modules—for example, using outsourced Benefits and Payroll systems or using a third-party Time Management application in conjunction with core HR. In this scenario, I discuss the integration aspects and options available including potential in-sourcing of some of the applications.

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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