The Future of SAP HR

There has been a lot of buzz in the SAP HR world around new and innovative solutions such as SuccessFactors, HR Renewal, Fiori, ESS/MSS, and the newest version of SAP’s ERP system, S/4HANA, which will replace ECC6 going forward.

SAP has repeatedly told us their strategy – simplify everything. They have released SAP Simple Finance and plan to release SAP Simple Logistics soon, with other simple innovations on the road-map. But what about SAP Simple HR, or SAP Simple Payroll? We don’t see that on any road-map. S/4HANA does include stripped down HR master data functionality to support the finance and other ERP modules, but that’s it – nothing transactional.

Does SAP plan on delivering more HR functionality in S/4HANA in a Simple innovation pack? The short answer is, no.

We can see as far back as July 2014 where SAP alluded to this fact with a page on their site entitled “SAP and SuccessFactors – Run Simple“. They made it quite clear in the video that SuccessFactors is the future of SAP HR. In addition to this, Mike Ettling, president of SAP HR Line of Business, has recently stated that “SAP SuccessFactors will be the default HCM and payroll solutions for S/4HANA”.

What does that mean for companies running core SAP HR on premise? Well, it means that until 2025 you have no problems. ECC6 will be supported under standard maintenance agreements with SAP until then. Thereafter support will get more expensive with extended maintenance agreements. So no, there isn’t a huge rush to move to the cloud just yet. Unless of course you consider where SAP’s development efforts are now focused – let’s just say it’s not core SAP HR.

Innovative solutions in the SAP HR space are going to be delivered through SuccessFactors. Bugs and minor improvements will still be delivered to core HR until 2025, after which it will stagnate completely. Consider as well the increasing demand of the workforce with regards to access to information and consumer grade apps.

Yes, you can stay on core SAP HR for the next 10 to 15 years, but that’s only true if you don’t care to innovate and deliver huge value to your employees and shareholders, which SuccessFactors will more readily be able to provide in a shorter time-frame, with vastly improved user experience and significantly higher adoption rates.

Core SAP HR is still an extremely robust solution and, combined with solutions such as Fiori, HR Renewal and SuccessFactors hybrid deployments, it still offers a huge amount of value.

In South Africa where SuccessFactors Employee Central Payroll is not yet supported, there isn’t really an option to run purely on SuccessFactors. Depending on your existing landscape and functional requirements, a hybrid or side-by-side approach is the way to go.

If you need advice on how to simplify your HR business in the cloud, give us a call.