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SAP HR Strengths and Weaknesses

Competitive positioning in the Human Resources software industry is highlighted with the following strengths and weaknesses:

SAP HR Strengths

  • As is the case with a small number of other HR software market share leaders, SAP has a brand weight and global coverage that should be recognized in most software selection projects. The company's 40+ years of experience and acquisition of SuccessFactors provide very strong HR and HCM domain expertise.
  • Software pricing is largely based on named users (not based on modules), which grants access to all or most modules and application functionality—a capability that can deliver significant increased value to those customers who also use or look to upgrade to SAP's Business Suite, ERP and/or financial applications.
  • Though also a weakness if not properly managed, the company's acquisition of SuccessFactors brings much-needed talent management software and cloud functionality into the SAP HCM software suite.
  • For organizations looking for robust talent management functionality, "SAP offers talent management capabilities that are native and integrated into the business suite product", says Gartner.
  • The analytics and data visualization capabilities that SAP's provides are very robust and capable of handling a wide variety of business intelligence tasks. Overall, HR business intelligence benefits greatly from related SAP products such as Business Objects and HANA.
  • In stark contrast to other large ERP and HR software publishers (namely Oracle), SAP's transparency when it comes to mistakes or areas for improvement is refreshing. For example, the company's "SAP Mentor" network is not only a go-to resource for implementation or troubleshooting advice, but also serves as a candid and critical gut-check for SAP due to the often dissenting opinions voiced. The fact that SAP not only tolerates but embraces a tough love policy is highly indicative of their push to listen rather than just dictate.

SAP HR Weaknesses

  • SAP HR software requires a significant up-front capital investment and lengthy implementation period, which in turn creates risk and extends payback periods and ROI.
  • Many SAP Business Suite customers have complained that the offerings in the base package must be supplemented with add-ons—a process that (per customer statements) can be exceedingly expensive.
  • SAP software customers also often frequently cite that the SAP solution is far too rigid, requires customers to change their business processes in order to accommodate the software, and requires too much SAP-insider knowledge when it comes to software configuration, changes or customization.
  • Business Suite customers have further complained in analyst reports and elsewhere that the extra functionality available with SAP software is not worth the added complexity and expense. A Gartner research report suggests that (outside of larger mid-market organizations) SAP solutions net higher "efforts and costs", particularly when clients incur customization and enhancements.
  • As the SAP HR software is largely a legacy, client/server technology, it may require a third party bandwidth aid (such as Citrix, Microsoft Terminal services or other VPN software solution) if used in a distributed or hosted environment in order to improve online performance. This does not apply to SuccessFactors which is a native cloud solution.
  • The technical debt that the company has incurred with its acquisitions is sizeable within the HR software suite. For example, the addition of SuccessFactors to the company fold means that the organization now has at least 5 human capital management (HCM) software architectures to support. Sooner or later, there will be HR product rationalization that will result in changes to existing customer solutions.
  • SAP has been absent of innovation and delivering a market category leading solution for an extremely long period. Not since the delivery of SAP R/2 in 1979 and the follow-on delivery of SAP R/3 in 1992 has the company delivered a market leading software or other product. Failing to innovate, and continuing to ride what is becoming antiquated technology, will ultimately contribute to a deteriorating business model.

Next: SAP HR Best Fit and Alternatives >>

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