SAP HCM for S/4 Hana in the Shadow of the ERP Transformation

Human resources, and therefore SAP Human Capital Management (HCM), is often left in the shadows or even completely neglected, which is surprising given the critical business areas such as payroll or master data management. The fact that SAP's HCM product strategy requires customers to make a strategic decision with long-term financial and process-related consequences is often overlooked.

Continue as before with H4S4

The end of support for SAP ECC in 2027 (with extended support until 2030) also applies to HCM and should no longer come as a surprise to anyone. The usage rights for the SAP HCM Compatibility Pack will even expire at the end of 2025. This scenario is affecting more and more customers as part of the ongoing ERP transformation to S/4HANA systems. In principle, customers can switch to SAP HCM for S/4HANA (H4S4) or SAP SuccessFactors.

A change to H4S4 offers existing HCM customers continuity and secures investments already made. This is interesting for companies that have heavily customized their system with customer-specific modifications or have many components in use. At the same time, however, this increases the complexity of a change and the likelihood that a company will be affected by SAP's so-called simplifications. What does not continue to work as before, however, is the pricing construct. Before activating the business function H4S4 subsequent licensing is required. The new S/4HANA calculation metric is based on the number of employees processed. In reality, this means significant one-off costs for relicensing and higher recurring maintenance costs for many customers.

Effort and opportunity costs of switching to H4S4

The cost of a change depends heavily on the individual starting position and the desired target image. Compared to FI/CO, however, it is limited. Companies with SAP HCM ECC and without a HANA database face a longer and more complex path than those who have only implemented the business function H4S4 have to be activated. This raises the question of whether it is still worth going down this path at all. The advantage of continuity is also the biggest disadvantage of H4S4. After all, apart from the included employee user and the associated option of providing self services with SAP Fiori, the benefits are manageable. The major investments and innovations take place elsewhere, namely in SuccessFactors.

If you don't want to close the door to automated workflows, new possibilities in talent management and AI for your HR, there is no way around evaluating SuccessFactors. Especially as the decision does not simply have to be for one and against the other, but hybrid scenarios allow the best of both worlds to be used.

HR as the first mover of digital change in companies

With a hybrid approach at the latest, HR leaves the waters of ERP transformation and often points the way to a modern SAP IT system landscape. Processes with a high hygiene factor that prevent dissatisfaction but do little to increase employee satisfaction, such as payroll and time management, can easily be migrated on-premise to a modern SAP IT landscape. H4S4 be operated. At the same time, the current potential of the SuccessFactors Suite is fully utilized and supplemented with the SAP Business Technology Platform (BTP).

The most sustainable strategies are the result of cooperation between all stakeholders. It is therefore recommended that IT, HR and SAP partners come together at one table. The focus here is not on when the changeover to H4S4 but whether this measure contributes to meeting the requirements of the company and its employees.

How are you shaping the future of your SAP HCM?

Since the release of H4S4 HR Campus has already carried out the first activations of the business function and laid the foundations for various HR IT system landscapes as part of several preliminary studies. As an experienced SAP Gold Partner in both the on-premise and
We also provide holistic and unbiased advice on the cloud.

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