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SAP ERP HCM Software Review

 

An Independent SAP HCM Software Review

In reviewing the SAP ERP HCM software solution, certain issues came out early on that require further illumination—specifically when it comes to the deployment options that are available. To start, while SAP is making in-roads towards the "cloud" in its Business ByDesign solution (reviewed separately), prospective customers should recognize that the SAP ERP HCM software is an on-premise (legacy/client-server) system. This HR system can be "hosted" by either SAP or a partner in a remote data center, but that "hosting" is still for on-premise software (and for an additional managed services fee).

Further, a hosting arrangement for this on-premise software ultimately translates to the fact that the subscription model isn't followed (i.e. customers must make a large initial purchase of a traditional software license(s); must ante up for annual maintenance fees; must pay an outsourced data center management fee; and must still handle future software upgrades—which are often intensive, costly, and time-consuming). On top of those issues, customers leveraging the hosted option are given their own separate database instance of the software—a fact that negates claims (and IT economies) of multi-tenant architectures (such as seamless vendor managed upgrades and frequent per annum release updates). All that being said, "hosting" can indeed remove a certain amount of the internal IT labor needed to manage the application (and shared hardware in the form of servers and related IT infrastructure can lead to some economies); however, the advantages of SaaS cannot be fully realized.

As for the payroll and HR software functionality itself, the SAP ERP HCM is broken down into 4 overarching modules: Core HR and Payroll, Service Delivery, Talent Management, and Workforce Analytics.

Core Human Resource and Payroll Software

Focused on standardization and consolidation of workforce-related core processes and data onto a single platform (while adhering to local regulations and other compliance), SAP's Core HR and Payroll software provides the following key functionality:

  • Employee administration: which automates basic, personnel-related data, and leverages a centralized database that enables employees and management to access up-to-date, consistent information that supports HR- and business-related decisions.
  • Organizational management: which manages and disseminates organizational structure and policy information, and provides position management as the building blocks for HR and talent management.
  • Global employee management: which supports processes involved in international employee relocation, including planning and preparation of global assignments to personnel administration and payroll for global employees.
  • Benefits management: which supports multiple and diverse plan options/definitions and allows the tailoring of individual employee benefit offers.
  • Time and attendance: which allow for effective time strategies and includes convenient time tracking, monitoring, record keeping, and evaluation of time data.
  • Payroll and legal reporting: which allows for complex payroll handling (for considerations such as national currency, multiple languages, collective agreements, and reporting) and support for legal regulations in 49 countries worldwide, facilitating compliance with regulatory and reporting requirements.

Talent Management Software

With functionality that is fully integrated with other HCM software and business processes, SAP's talent management software provides the following capabilities:

  • Competency management: which allows for the identification and optimization of business strategy-driven skills/competencies; the development of a competency catalog; and the definition of key competencies in order cultivate talent pools accordingly.
  • Recruitment (enabled by SAP E-Recruiting): which allows for comprehensive applicant tracking and reporting and access to the SAP collaboration platform (Streamwork) or linkage to job boards, recruiting-service providers, and internal systems.
  • Employee performance management: which allows for individual and/or team alignment with corporate goals and strategies; standardization of employee reviews and appraisals; and support for a performance-oriented compensation process.
  • Employee development: which allows for the creation/monitoring of short/long-term development plans for employees, individual/team development needs (through profile match-ups), and training plans.
  • Enterprise learning management (enabled by SAP Enterprise Learning): which provides blended learning experiences (web, virtual, classroom); planning/tracking/measurement of learning strategies/impacts; and instructional design tools for content tailoring.
  • Succession management (enabled by SAP Talent Visualization by Nakisa): which allows for talent pipeline identification and rankings; individual development plans, and key position identification.
  • Compensation management: which allows for the analysis, comparison (internal and external), and implementation of reward strategies, such as performance/competency-based pay, variable pay plans, and long-term incentives reward programs.

Service Delivery

Incorporating a broad range of interaction technologies, the Service Delivery module is focused on ensuring employees' maintenance of authorized information through the multiple channels of the Web browser, shared service framework, voice, mobile devices, and kiosk, for easy access to internal and external business content, applications, and services. Specific functionality includes:

  • Manager Self-Service (MSS): which provides managers with the information and application access for employee development, compensation planning (and approval), and budgeting.
  • Employee Self-Service (ESS): which provides employees (even if deployed globally) with the information, access, and tools to autonomously manage their own important life and work events.
  • Shared-Service Framework: which is a multifunctional framework that allows for the same architecture to be deployed in support of HR, finance, IT, service center operations, and other business functions.

Workforce Analytics Software

With 600+ predefined reports and 90+ pre-packaged key performance indicators (KPIs), SAP's Workforce Analytics software is one of the most sophisticated solutions available for identifying issues and developing actionable solutions for addressing those issues. Specific functionality includes:

  • Workforce planning (enabled by SAP BusinessObjects Strategic Workforce Planning): which allows users to leverage workforce demographic data for trend analysis; predefined reports for headcount development, turnover rates, and workforce composition; and ultimately link those analyses directly into headcount planning, budgeting, and key talent processes, such as recruiting and learning.
  • Workforce cost planning and simulation: which provides a) support for workforce cost-planning tasks, and b) access to a broad range of workforce-related data; to support accurate planning, facilitate simulated planning scenarios, and enable continuous monitoring of actual performance relative to plan.
  • Workforce benchmarking: which allows for the measurement of standard workforce processes and the comparison of those measurements with external benchmarks and internal operating thresholds.
  • Core HR and Payroll analytics: which allows for the measurement and analysis of typical core HR processes, (such as payroll processing, employee administration, time management, and benefits administration) and organizational features (such as structures, relationships, and attributes of jobs and positions).
  • Talent management analytics: which allows for employee skill/qualification analysis; recruiting process evaluation; learning program effectiveness measures; succession program assessment; cost-benefit analyses of employee compensation programs.
  • Strategic alignment: which a) ensures that business activities are in line with the strategic organizational goals and b) leverages a balanced scorecard framework (with predefined workforce scorecards) that can be integrated into department and individual management-by-objective (MBO) documents.

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