Future-proof HR system landscape: first step into the cloud

Richter und Frenzel is one of the largest companies in its sector in Germany. The HR organization is set up centrally and is responsible for payroll accounting for numerous companies and around 520 personnel sub-areas - from large administrative locations to small branches with just a few employees. The demands on stability, pay scale logic and adherence to deadlines are correspondingly high. When Richter und Frenzel decided to move to the cloud, they deliberately opted for a pragmatic approach: the HR system. Not because efficiency gains were expected here, but because it is a system that has to run stably - and at the same time is well suited to gaining initial experience with cloud operating models. The plumbing, heating and air conditioning wholesaler with around 4,500 employees and a highly distributed location structure used the H4S4 transition as a technical milestone and as a pilot project for future steps towards the cloud.

Before the project, Richter und Frenzel was running SAP HCM on a release that was clearly getting on in years from a technical perspective. Although the system continued to function reliably for the users in the HR department, it was clear that a cloud move was not possible on this basis. The decision to make the transition was based on the overall strategy. With the conclusion of a Rise contract, the path to the cloud was mapped out - and HR was to be the first on-premises system to follow. „We deliberately wanted to start with HR because it is manageable compared to our ERP system,“ explains Manuel Mayer, Head of IT Integration Management and HR Systems at Richter und Frenzel. „However, in order to move to the cloud, we first had to be technically up to date - i.e. upgrade to ERP 8 and then the H4S4 transition.“ A clear expectation was important from the outset: the project should not bring any functional changes for the HR departments. Payroll accounting, processes and interfaces were to remain the same. The sole aim was to modernize the technical basis and develop the architecture in the right direction.

Readiness check vs. gut feeling

In view of an HR landscape that had grown over decades, the central question was: How resilient is the system really technically? The answer was provided by an SAP readiness check - a standardized analysis procedure recommended by SAP. The existing system was technically evaluated: programs used, custom codes, interfaces, potential risks with regard to the H4S4 transition. „We feared that the long history and the large number of customer-specific adaptations would make it necessary to revise the reports and code,“ reports Sarah Holmer, Team Manager Consulting HCM and Success Factors at FIS. „However, the readiness check showed that only a few adjustments were required for the Hana database - even if extensive customer-specific coding is available.“ For Richter and Frenzel, this was an important basis for their decision - and at the same time a confirmation of the previous system support.

Brownfield by conviction

Based on this analysis, the decision was clearly made in favor of a brownfield approach. The existing HR system was to be taken over and technically modernized - without re-implementation and without process conversion. „We have an HR stand-alone system without ballast from other modules. The readiness check was lean - so why start again?“ explains Holmer. The time factor also played a role. The transition had to take place within a clearly defined framework without jeopardizing the accounting operation. A complete rebuild would have meant additional work - without any added value for the objective. The project plan was deliberately kept pragmatic. No complex project structures, but clearly defined steps based on the monthly billing rhythm. The project was started immediately after payroll accounting was completed in order to have a sufficient buffer until the next critical phase. A central element was the system landscape with development and production systems - supplemented by a sandbox as a deliberate fallback scenario. „This meant we were able to act at all times,“ says Mayer, describing the situation. „If SAP notifications for billing had come at short notice, we could have reacted.“ There were several weeks between the upgrade of the development system, on which all tests were carried out, and the productive environment. The next step was only taken once the system had proven itself in the test. The actual lift-and-shift to the private cloud was also staggered - first for testing and later for production.

New cloud rules of the game

The biggest challenges were not in the SAP standard itself, but in the existing system environment. In particular, time management at Richter und Frenzel runs outside of SAP and is connected via interfaces. „This data has to flow back and forth reliably,“ emphasizes Holmer. „That was the most critical technical point.“ There was also the change in the operating model. Activities that could previously be completed quickly internally or by the operating partner now run in the Rise context via structured service requests to SAP. Whitelisting, approvals and technical adjustments require clearly defined coordination processes with the manufacturer. For Richter and Frenzel, this was precisely part of the objective: „We wanted to learn with a less critical system,“ says Mayer. „So that we are prepared for the really business-critical systems later on.“

Once the transition was complete, the desired result was achieved: nothing changed for HR users on a day-to-day basis. Processes, payroll and operation remained the same. „The system feels exactly the same as before. Only with the good feeling of now working on a current release in the cloud,“ says Mayer. Measurable efficiency gains were never the focus. Instead, the focus was on future-proofing, risk minimization and strategic preparation. „Not every IT project has to deliver tangible effects immediately,“ Mayer sums up. „Not every Windows update makes things better - but it is necessary. And that's exactly what this project was.“ At the same time, the modernized HR system landscape forms the technical basis for the introduction of SAP SuccessFactors at Richter und Frenzel. The aim is to map recruiting, onboarding and, in the future, employee self-services on a standardized platform. „We want one tool for everyone involved - for payroll managers, HR consultants, managers and employees,“ explains Mayer. The stable SAP HR basis in the Rise environment provides the necessary integration and operational security.

Integrated model

The collaboration with FIS played a central role in this. Richter and Frenzel have been supported in the HR landscape for around three decades - and it quickly became clear that this path would be taken together during the cloud transition. „We always felt we were in good hands,“ says Manuel Mayer. „Trust is crucial, especially in a transition like this - and it was there.“ An additional advantage was the close integration of project implementation and cloud operation via FIS and FIS-ASP. While FIS was responsible for the technical transition, FIS-ASP took over the operational coordination in the Rise environment - including coordination with SAP, management of service requests and support during ongoing operations.

„It noticeably reduces the coordination effort when everyone sits around the same table,“ says Mayer. „Anything else would be unnecessarily complicated.“ With the successful H4S4 transition, Richter und Frenzel has not only technically modernized its HR system, but also gained valuable experience - in the interaction with SAP in the Rise context, in new operating processes and in the internal organization of such projects. The first step into the cloud has thus been taken - deliberately calmly, cleanly and without risk.

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