5.4    Human Resources: SAP SuccessFactors

As part of the digital core strategy, SAP SuccessFactors is the default HR functionality of SAP S/4HANA. Mobile enabled with a modern UX, SAP SuccessFactors includes a complete set of core HR with payroll, tightly integrated talent management solutions, robust workforce analytics and planning, and social collaboration tools.

This cloud HR suite is a highly scalable SaaS solution that offers various ways to extend existing process functionality beyond what is available out of the box. Standard solution configuration capabilities are supported with the ability to create new objects and business rules with the Metadata Framework (MDF) and create new applications with SAP HANA Cloud Platform.

Further, standard integrations between SAP SuccessFactors and SAP S/4HANA are available to ensure that SAP SuccessFactors Employee Central is truly the next-generation core HR system of record for employee data.

Let’s look at SAP SuccessFactors functionality.

5.4.1    Employee Data

SAP SuccessFactors Employee Central is the core HR component of the SAP SuccessFactors solution. It captures employee and organizational data, and it’s built around the concept of self-service for HR professionals, managers, and employees.

SAP SuccessFactors Employee Central is an enterprise-grade, event-based transactional system with full workflow support. It includes position management, time-off management, global benefits, and reporting on employee and organizational data, as well as compliance and auditing. It also includes SAP SuccessFactors Employee Central Payroll, which is provided as an SAP-hosted solution based on SAP’s long established on-premise payroll engine.

5.4.2    Talent Management

SAP SuccessFactors has a broad array of talent management and related analytics functionality:

• SAP SuccessFactors Recruiting Management and SAP SuccessFactors Recruiting Marketing
  Together, these functions form a comprehensive recruiting solution that supports attracting, engaging, and selecting better candidates in an efficient way and then measuring the results or recruiting process. Recruiting Management is a mobile and socially enabled applicant tracking system that allows companies to select and hire the best talent faster. Recruiting Marketing is a social recruiting marketing platform that allows companies to attract and engage quality candidates via state-of-the-art social solutions, custom career sites, and analytics to measure efficiency of various recruitment channels used in recruiting marketing campaigns.
• SAP SuccessFactors Onboarding
  This solution for new hires and hiring managers improves time to productivity, job satisfaction, and new hire retention. It guides and empowers new hires to access SAP SuccessFactors solutions where they can fill in required new hire forms, access documentation, become acquainted with their new team, enroll and take initial training, set initial goals, and use social collaboration tools that will help them become familiar with the new work environment.
• SAP SuccessFactors Learning
  This is a comprehensive learning management system that supports social and mobile learning to ensure compliance and development of talent with enhanced learning experience. SAP SuccessFactors Learning enables managing, developing, and deployment of instructor-led, offline, and formal and social online training.
  SAP SuccessFactors iContent (a content-as-a-service [CaaS] solution) allows you to focus on learning quality and strategy while eliminating the need for hosting learning content and managing content infrastructure, as well as security, delivery, and updates of learning content.
• SAP SuccessFactors Performance and Goals
  This is a performance management and goal-setting solution that allows you to create an aligned and high-performing workforce. Goal management enables you to communicate company strategy, create meaningful individual and group goals across the company, and assign/cascade them to employees so that they can support company business goals and strategy. Goals execution and progress can be measured in real time. SAP SuccessFactors Performance and Goals delivers various types of evaluations, performance assessments, and performance calibration; it streamlines the performance appraisal process and helps managers by providing tools (writing and coaching assistant, legal scan) and content that ensure a meaningful and compliant performance review and feedback process. Employee performance tied up with business goals is measured and can be integrated with the company reward system.
• SAP SuccessFactors Compensation
  This is a comprehensive compensation management solution that helps to retain top talent by supporting a pay-for-performance strategy and process. Compensation management allows you to create reward budgets with flexible approvals workflows, and budget spending monitoring is supported by analytics. It also enables you to create compensation plans with various pay components, including basic pay, bonuses, and stock. Part of SAP SuccessFactors Compensation is the variable pay module that supports very complex bonus programs based on performance results from multiple employee assignments within the company. Compensation enables a pay-for-performance reward culture by supporting reward pay based on performance results. Compensation calibration helps to make better compensation decisions with the support of objective ratings and ultimately helps to retain top talent and increase employee productivity.
• SAP SuccessFactors Succession and Development
  This solution supports succession planning and career development planning and allows you to identify, develop, and retain talent throughout the organization.
  Succession management allows you to identify key positions in the organization and nominate potential successors for those positions while monitoring their readiness to fill the role. The objective is to plan for staffing changes and ensure the readiness of nominated successors. Career development planning allows you to create development plans, track development activities for employees and nominated successors, and align learning activities with identified competency gaps to ensure that employees and successors will be ready to take on new future roles within the company. It improves motivation with continuous development and career planning where employees can track their preferred roles and monitor their readiness based on the competency levels required to progress to the role. A comprehensive talent search engine, nine-box grid performance-potential matrix, and talent calibration are also provided.
• SAP SuccessFactors Workforce Analytics
  This is a comprehensive analytics and reporting solution that allows you to create reports and dashboards (with trend analysis) with aggregated data and with the ability to drill down to deeper levels of detail. It comes with a set of predefined metrics and KPIs across core HR and talent modules. Workforce Analytics supports reporting on external data sources and can be connected to multiple systems to create cross-functional reports and dashboards. These reports and dashboards can be delivered to managers and business leaders in the form of published reports and easily consumable insights with a combination of core HR, talent, and non-HR data. Workforce Analytics enables access to industry benchmarks so that companies using the solution can compare themselves with industry peers across various metrics.
• SAP SuccessFactors Workforce Planning
  This solution addresses an organization’s need to plan future workforce based on business need and trends. It’s a strategic workforce planning tool based on a long-term planning approach (as opposed to a short-term, operational planning approach) to match the required workforce to projected future workforce demand in terms of cost and skills. Based on available workforce data and benchmarks, the solution allows you to assess the company readiness to execute various strategies (i.e., talent and reward strategies), forecast the impact of business decisions (i.e., mergers and acquisitions, development of new product line), mitigate the risk, and take specific actions that the solution proposes from library of strategies and actions. Multiple what-if scenarios can be modeled based on set parameters to analyze the cost impacts. Predictive capabilities are available to support capability analysis in the context of current trends.

5.4.3    SAP SuccessFactors and SAP S/4HANA

From SAP’s perspective, SAP SuccessFactors (rather than SAP ERP HCM) is the go-forward human capital management solution for SAP S/4HANA and the go-forward solution for the HR category within SAP’s diversified cloud strategy. With adoption of the SAP HANA platform for foundation, integration, analytics, and application development, and with SAP Fiori for UX, the SAP SuccessFactors suite is the firmly established solution in the SAP solution portfolio and the future SAP S/4HANA road map.

SAP S/4HANA delivers significant simplifications and innovations as compared to the previous generation SAP ERP solution where the SAP ERP HCM component resided. At this time, SAP doesn’t plan to take the SAP ERP HCM component to the same simplification and innovation process, and there are no plans to invest in new functionality and innovations in SAP ERP HCM. SAP S/4HANA doesn’t have an on-premise version of an HR transactional system. However, it requires a simple set of HR data fields to support finance and other SAP ERP processes.

According to SAP, the current SAP ERP HCM portfolio will be updated and maintained until at least 2025, and SAP will continue to make double investments—minor on-premise investments and significant cloud investments. The SAP ERP HCM on-premise solution will be updated primarily within core HR localization, compliance, SAP Fiori unification, and UX areas.

The SAP SuccessFactors solution can be easily integrated from the data and process perspective with on-premise and other cloud systems via prepackaged and SAP-maintained integrations, predefined integration templates, and application programming interfaces (APIs) and custom integrations. Though customers have multiple options available for integrating SAP SuccessFactors with other solutions, SAP’s preferred solution for SAP SuccessFactors integration middleware is SAP HANA Cloud Platform, integration services. It’s an integration-as-a-service platform specifically designed to support integration of SAP’s range of cloud solutions with other on-premise and cloud systems. SAP is significantly investing in extending the range of prepackaged integrations to SAP cloud applications and other vendors’ solutions.

For companies using on-premise SAP ERP HCM that want to implement talent management solutions, SAP SuccessFactors is an obvious choice because no enhancements are planned for talent management on-premise solutions. For companies that want to implement an HR information system with SAP, SAP ERP HCM on-premise solution is still a viable option (i.e., it will still be tweaked for specific industry regulations, compliance localization, and language support); however, from the long-term strategic perspective, SAP SuccessFactors Employee Central is a safer route.

In the end, companies that want to implement SAP S/4HANA can use SAP S/4HANA deployed on-premise or with SAP S/4HANA Cloud. Companies choosing SAP S/4HANA as their next-generation business suite and that also require a human capital management suite will likely focus on the SAP SuccessFactors solution due to the current and planned SAP investment level and innovation in cloud human capital management solutions, as follows:

• Prepackaged integrations are available now so companies can connect SAP SuccessFactors Employee Central with SAP S/4HANA Cloud and SAP Success Factors Employee Central integration with SAP S/4HANA, on-premise edition. Integration capabilities are via SAP HANA Cloud Platform, web services, and SAP PO for SAP S/4HANA, on-premise edition, and via SAP HANA Cloud Platform and web services for SAP S/4HANA Cloud.
  Companies that want to implement SAP S/4HANA, are using SAP ERP HCM on-premise, and aren’t yet ready to implement SAP SuccessFactors can continue to use SAP ERP HCM, running in a separate instance or a single instance together with SAP S/4HANA. SAP has plans for prepackaged integrations to enable both scenarios.
• One SAP road map for SAP S/4HANA Cloud and SAP S/4HANA, on-premise edition, integration will likely expand in areas of employee integration, time sheet integration, total workforce integration with SAP Fieldglass, SAP SuccessFactors Employee Central, SAP ERP HCM, and SAP Ariba for the integration of contingent workforces. SAP also plans an interface for payroll postings to SAP S/4HANA Finance and an integration of supplier data from SAP S/4HANA to SAP SuccessFactors Employee Central to support the contingent worker assignments there.