SAP HR Review

An Independent SAP HR Software Review

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

Such a hosting arrangement for on-premise HR software fails to achieve cloud benefits such as the software as a service (SaaS) or pay as you go pricing model. Instead, remotely hosting an on-premise application requires customers to make an up-front software license purchase, ante up for annual maintenance fees, compensate the hosting provider and still make investments for future software upgrades—which are often intensive, costly, and time-consuming. Additionally, customers leveraging the hosted option are given their own separate database instance of the application—a fact that negates claims (and IT economies) of cloud applications built on multi-tenant architectures, seamless vendor managed upgrades and frequent per annum release updates. All that said, "hosting" can 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 four primary modules: Core HR and Payroll, Service Delivery, Talent Management and Workforce Analytics.

Core Human Resource and Payroll Software

SAP's Core HR and Payroll software focuses on standardization and consolidation of workforce-related core processes and data into a single platform (while adhering to local regulations and other compliance) and 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 international employee relocation processes, 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 benefits.
• Time and attendance: which allow for effective time strategies and includes time tracking, monitoring, record keeping, and evaluation of time data.
• Payroll and regulatory reporting: which support complex payroll management (such as national currency, multiple languages, collective agreements and reporting) and support for legal regulations in 49 countries, facilitating compliance with regulatory and reporting requirements.

Talent Management Software

SAP talent management software is integrated with other HCM software and business processes, and offers the following capabilities:

• Competency management: which supports the identification and optimization of business strategy-driven skills and competencies, the development of a competency catalog, and the definition of key competencies in order cultivate talent pools.
• 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 aids individual and team alignment with corporate goals and strategies, standardizes employee reviews and appraisals, and supports performance-oriented compensation processes.
• Employee development: which automates the creation and monitoring of short and 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, and instructional design tools for content authoring.
• Succession management (enabled by SAP Talent Visualization by Nakisa): which aids talent pipeline identification and rankings, individual development plans, and key position identification.
• Compensation management: which supports the analysis, comparison (internal and external), and implementation of reward strategies, such as performance/competency-based pay, variable pay plans, and long-term incentive 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 anytime access to internal and external business content, applications and services. Specific capabilities include the following:

• Manager Self-Service (MSS): provides managers with the information and application access for employee development, compensation planning and approval, and budgeting.
• Employee Self-Service (ESS): provides employees with information, access, and tools to autonomously manage their own important life and work events.
• Shared-Service Framework: 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 over 600 packaged reports and over 90 key performance indicators (KPIs), the SAP 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): this allows users to leverage workforce demographic data for trend analysis; predefined reports for headcount development, turnover rates, and workforce composition; and ultimately link these insights directly into future headcount planning, budgeting, and key talent processes, such as recruiting and learning.
• Workforce cost planning and simulation: this provides support for workforce cost-planning tasks, and access to a broad range of workforce-related data in order to support accurate planning, facilitate simulated planning scenarios, and enable continuous monitoring of actual performance relative to plan.
• Workforce benchmarking: this aids the measurement of standard workforce processes and the comparison of those metrics with external benchmarks and internal operating thresholds.
• Core HR and Payroll analytics: this allows for the measurement and analysis of common 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: allows for employee skill and qualification analysis; recruiting process evaluation; learning program effectiveness measures; succession program assessment; cost-benefit analyses of employee compensation programs.
• Strategic alignment: this ensures that business activities are in line with the strategic organizational goals and leverages a balanced scorecard framework (with predefined workforce scorecards) that can be integrated into business unit and individual management-by-objective (MBO) plans.

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