Friday, March 15, 2013

The Role of SAP ERP HCM in a Cloud HCM Landscape

Last Monday and Tuesday I worked with four North American customers to plan their HCM road map for the next 4 years. Two of the customers are planning to move their core HR system to the cloud in two years. They said something very interesting  They have over a hundred integrations in place between their OnPremise HCM system and other OnPremise software systems. These integrations cost them millions of dollars to build.

So they wanted to keep the current SAP ERP HCM system as it it today, even when they move core-HR to the cloud and treat their existing HCM system as a HCM mini master. Uwe Simon, SVP of active global support and former head of HCM development at SAP was there as well and mentioned that doing this should not be a problem. I also discussed this with David Ludlow, the head of SAP SuccessFactors HCM solution Management and he thought there should not be any policy problems with this approach. This will save those particular customers over $5 Million each in implementation costs when they move Core HR from SAP to SuccessFactors.

When existing SAP HCM customers move Core HR to the cloud, their existing HCM system turns into a mini-master OnPremise, preserving their investment in integration with other OnPremise systems.


I wonder what our customers and partners think. Do you see any concerns?

PS: The diagram you see above is the architecture for integrating Employee Central with OnPremise HCM. The interesting thing is that the SAP HCM never actually goes away even when customers move Core HR to the cloud.

11 comments:

  1. Anonymous4:14 AM

    Hi Prashanth, thank you for sharing as this is really interesting. From a functional perspective my immediate thoughts were:

    - real time integration between SAP-SF could be essential depending on nature of other dependent integration/interfaces

    - will there be internal PA-Payroll integration issues if SAP OnPremise Payroll is maintained alongside PA mini-master as per your diagram?

    - configuration and general system maintenance effort should be considered depending on range and type of data required for the HCM mini-master, and how often changes might be required

    - customers may have questions on licence impact

    Although I am sure answers/solutions from SAP would be forthcoming to support customers in this situation, such a scenario essentially relates to dual systems and data integrity (including timely maintenance of data) would probably be foremost in my mind.

    Kind regards,
    Clementine


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    1. Clementine, Thanks for your comment. You are absolutely right. Many questions remain. However this sounds like a viable landscape. We will have to address technical as well as other practical problems.

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  2. What will happen to all the custom fields and info types, if HCM Core is reduced to a mini master. Will SuccessFactors be able to inherit these additional information fields/info types or will they stay in the mini master?

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    1. Klaus, You bring up an important point. Every customer will have custom fields and infotypes. The standard integration does accommodate such custom fields. If we run into new situations which require enhancement, we will have to address them to support customers. The cost savings is too big to not support it, in my opinion.

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  3. I wonder what will happen to all the development the customers did to their on-premise solution, e.g. custom fields and info types. Will they be inherited to the sf master data or stay in SAP HCM?

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    1. Klaus, Thanks for the observation. When customers use Employee Central as their Core HR system, Employee Central is the source of truth. So they will have to move information from all Core HR specific Infotypes to Employee Central.

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  4. Anonymous2:18 PM

    Hii prashanth

    Where does sap business bydesign sit in the larger scale of things .currently I work and support a large bydesign to sap hcm on premise integration project and I am keen to know whether byd ecc integration will be developed in the future by sap from a product perspective or is it left to the customer

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    Replies
    1. Harris, You bring up an important question. Since this is a policy question, it is best to bring this up with the ByDesign team. They will have the current updates.

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  5. No particular concerns, but just a couple of foot notes - or rather food for thought.
    We'll need to give careful attention to what data is maintained where, based on what functionalities are used by the customer and what toolsets are available.

    As in the case of EC payroll, or of On Premise payroll integrated with EC, there may be information types that will still be directly in the MiniMaster (even if maintainable from the SuccessFactors' tool through a mashed UI).

    I don't see why HCM would have to be "reduced" - it can behave as a mini master, while keeping all the legacy and historical information, and from the EC go live time, maintenance would switch to the cloud tool. During the configuration phase, custom fields and information can be designed to be added in EC, in a similar way as it has been designed On Premise.

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    1. Chiara, Thanks for your insight. Based on the comments from all the experienced colleagues including yourself, the above architecture looks like a plausible scenario as long as we take care of a few things.

      As you rightly pointed out, EC will become the source of truth and maintenance will switch to EC once this architecture is implemented. I am pretty sure you will be involved in a few such implementations in the future. Your expertise will be valuable.

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  6. SAP HCM has always been 'tricky' based on multiple databases/sources(PA,PD,PY). This just complicates that problem.

    Reporting - if be moved to BI, then we will need to see more information on how this will be done.

    "interfaces" "Staging Databases" - whatever you call them is messy and can be clumsy. I would be interested in seeing how SAP address this.

    Lastly - with the major concerns by some companies on data security, it does raise a few concerns - I wonder how Governments will respond to this?

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