On-prem versus cloud
With HCM for S/4 Hana, SAP is offering an on-prem variant from 2023, for which there is a maintenance commitment until at least 2030. Despite this option, the German-speaking user association DSAG has taken a critical and constructive look at the strategic direction of SuccessFactors in a position paper.
Based on a DSAG survey, there are concerns among existing SAP customers: Particularly for users in the public sector, the question arises as to how they can continue to map their HR processes with SAP software in a legally secure, compliant and requirements-oriented manner against the backdrop of existing legislation and the wide range of customer-specific requirements.
The latest DSAG survey on the future viability of SAP solutions for use in public administration found that many respondents have concerns about the following three issues.
Unclear legal framework: In the case of clouds that are distributed internationally and also extend across states outside the EEA, a legal basis is required for the transfer of personal data to third countries. One of the fears is that access to the cloud user's data by government and private bodies is possible and cannot be controlled.
Functional barriers: User concerns revolve around the lack of options for extending and modifying SAP SuccessFactors, as well as the lack of important functionality for the public sector.
These include, for example, personnel cost planning and travel management. The latter is now part of SAP ERP as an on-prem variant, but not a component of HCM for S/4 because SAP is strategically relying on the cloud solution Concur. IT security concerns: With regard to the use of a public cloud solution, around half of all public sector clients/service providers surveyed expressed IT security concerns with reference to the requirements of the German Federal Office for Information Security (BSI).
"Unresolved legal frameworks, lack of extensibility and functionality of the SuccessFactors public cloud solution, and data privacy concerns are barriers to moving to the cloud for our public sector member companies"
Hermann-Josef Haag, DSAG Board Member for Human Resources and Public Sector, explains to E-3 Magazine. He adds:
"As a user association, we therefore demand support from SAP so that public administration customers can continue to map their HR processes with SAP software in a legally secure, compliant and requirements-oriented manner."
More than 67 percent of the public sector clients and service providers surveyed rate a switch to a public cloud deployment as negative. However, 43 percent of all respondents rate a possible private cloud as positive.
The high proportion of "no answer" (around 34 percent) is remarkable. For DSAG, this suggests that a significant proportion of existing SAP customers have not yet formed a final picture of cloud models or that there are gaps in their knowledge or information.
Based on the public sector's broadly agreed stance on HCM product strategy, DSAG will influence SAP's cloud strategy for HCM.
The user association DSAG demands from SAP: "Cloud Only" is not an option for the public sector in Germany. A strategic approach for all processes continues to be on-prem solutions as a component of a future architecture.
Private cloud solutions in the sense of "private deployment" can be technically expedient, provided SAP opens up technical possibilities for customer developments and the legal and organizational framework conditions permit the use of a private cloud. However, the issue of modifications and maintenance still seems to be open in this respect. SAP also does not yet have a licensing model for this.
Between five and seven years must be planned for a changeover to alternative software solutions in the HCM area - depending on the scope and deployment. For this reason, decision-makers in public administration demand clear and reliable statements about the long-term SAP strategy at an early stage - current roadmaps from the SAP Support Portal are not sufficient for this.
DSAG will continue to work towards ensuring that future SAP solutions in the HCM area also meet the legal and functional requirements - including those of customers from the public sector in Germany - as far as possible.
The user association DSAG knows that a divergence between on-prem solutions that are no longer being further developed and modern cloud solutions would not be acceptable for public administration in the case of on-prem offerings that are available for a longer period of time.
