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

Many companies have already started the S/4 Hana transformation or are at least in the planning phase, but by no means all of them. The focus is often on the Finance and Controlling module and SAP Basis, as this is where the most far-reaching changes are taking place.
Esmir Davorovic, HR Campus AG
July 1, 2024
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This text has been automatically translated from German to English.

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.


To the partner entry:

HR Campus CI
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Esmir Davorovic, HR Campus AG

As an HR strategy consultant and project manager at HR Campus AG, Esmir makes a virtue of duty and sees the necessary S/4HANA transformation as an opportunity to prepare HR departments for the future. Experience from SuccessFactors projects and S/4HANA preliminary studies, as well as the critical questioning of habits, will help.


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Working on the SAP basis is crucial for successful S/4 conversion. 

This gives the Competence Center strategic importance for existing SAP customers. Regardless of the S/4 Hana operating model, topics such as Automation, Monitoring, Security, Application Lifecycle Management and Data Management the basis for S/4 operations.

For the second time, E3 magazine is organizing a summit for the SAP community in Salzburg to provide comprehensive information on all aspects of S/4 Hana groundwork. All information about the event can be found here:

SAP Competence Center Summit 2024

Venue

Event Room, FourSide Hotel Salzburg,
At the exhibition center 2,
A-5020 Salzburg

Event date

June 5 and 6, 2024

Regular ticket:

€ 590 excl. VAT

Venue

Event Room, Hotel Hilton Heidelberg,
Kurfürstenanlage 1,
69115 Heidelberg

Event date

28 and 29 February 2024

Tickets

Regular ticket
EUR 590 excl. VAT
The organizer is the E3 magazine of the publishing house B4Bmedia.net AG. The presentations will be accompanied by an exhibition of selected SAP partners. The ticket price includes the attendance of all lectures of the Steampunk and BTP Summit 2024, the visit of the exhibition area, the participation in the evening event as well as the catering during the official program. The lecture program and the list of exhibitors and sponsors (SAP partners) will be published on this website in due time.