Thanks to HR 2014 speaker Jeremy Masters — and all who posted the many, many questions that came in — for a great discussion on compensation management with SuccessFactors and SAP ERP HCM.
You can view all of the questions and advice from Jeremy in the chat replay or in the edited transcript below.
Sponsored by HR 2014 Orlando, March 11-14
Kristine Erickson, SAPinsider Online (Moderator): Welcome to today’s Q&A with Jeremy Masters on Compensation Management with SAP HCM and SuccessFactors. Great to have you here, Jeremy!
Jeremy Masters: Kristine, it’s great to be here today. Compensation is one of my favorite topics!
Moderator: A question to start off about compensation management generally: What are the key decision points when adding compensation management to the current HR technology stack – regardless of deployment model (on-premise or cloud)?
Jeremy Masters: Great question. Compensation is such a robust process. Some key things to keep in mind (regardless of deployment model) are:
1. How is the integrity of your underlying master data
2. The effectiveness/efficiencies around your approval and workflow processes
3. What is the ease of maintenance going forward with the solution (from both the HR and IT sides)
4. How do you handle important dates, like organizational freeze dates (or not) and other more employee level dates, like hire dates
These are just a few....
Comment From Guest: You mentioned “integrity of your underlying master data” – what do you see as the top 3 or 5 HR data items that can cause issues for an ECM rollout?
1. Wrong manager (poor position/org management)
2. Bad dates (adjusted service date, hire/rehire)
3. Wrong pay levels or bands
4. Wrong salaries (believe it or not!)
And so many more!
Comment From Noel: Is SAP really pulling the plug on SAP ECM support in the near future and pushing everyone towards SuccessFactors for Compensation?
Jeremy Masters: Hi Noel. No, SAP is not pulling any plug on any of its Talent Management functionality. There are still plenty of customers doing on-premise implementations. That said, the majority of investment will be on SuccessFactors Compensation and Variable Pay solutions. For on-premise, there will continue to be the Customer Connection program, which will consider minor enhancement requests from the user community.
Comment From Noel: Thanks Jeremy! Never got a clear answer for this anywhere.
Jeremy Masters: Yes, as you can imagine, it’s a sensitive topic that SAP is navigating.
Comment From Valerie: How are the SF Compensation and Variable Pay modules linked to core SAP HR? How can data flow between the two systems (SF and SAP)?
Jeremy Masters: Hi Valerie. There is already pre-delivered integration between SAP HCM and SuccessFactors Compensation. Look at this link from SAP Mentor Luke Marson, which sums it up nicely.
Comment From Deeksha Mittal, SuccessFactors: Hi Jeremy & Valerie. I am the product manager for the SuccessFactors Variable Pay product. As Jeremy said, we already have built-in integration between SAP HCM and Compensation. We are working towards an integration between Variable Pay and SAP HCM as well and it is definitely on the roadmap for 2014. By the end of 2014 (your next planning cycles), you should be able to take advantage of the integration between Variable Pay and SAP HCM.
Comment From Guest: If your company has never upgraded the HCM module – i.e., EHP0 – what would you recommend to upgrade to EHP6?
Jeremy Masters: If you wanted to leverage the latest and greatest for ECM in SAP, you should go for EhP5 at a minimum. There are not a lot of enhancements in EhP6 or EhP7 for ECM.
Comment From Kir Chen: Is it wise to have performance management on-premise with SAP HCM while compensation is on-cloud with SFSF? I presume there’s currently no pre-built integration now and in the near future?
Jeremy Masters: Hi Kir. Great to hear from you, as always, especially when you are halfway around the world!
There is currently no integration from on-premise SAP HCM performance management to SuccessFactors cloud. There will likely not be any since SAP/SuccessFactors is encouraging customers to use Performance Management in SuccessFactors. I would not hold your breath for that one, : ) so you will have to build it yourself.
Comment From Guest: Would you recommend using an implementation partner to upgrade from EHP0 to EHP6 or EHP7 for ECM?
Jeremy Masters: It really shouldn’t matter much, as long as you get to EhP5.
Comment From Guest: What is the current status or options for integration between SuccessFactors and SAP ECM?
Jeremy Masters: I mentioned the Add-On 1.0, support pack 2 with a link to Luke’s article. Check that out. If you mean integration between SAP ECM and SuccessFactors Compensation or Variable Pay, there is none. Even the inbound “results” from SuccessFactors do not create any ECM Infotypes (IT0759) for you techie nerds out there.
Comment From Jarret Pazahanick: We are all so lucky Jeremy is willing to share his deep knowledge and expertise during these sessions, as I consider him the foremost expert in the SAP/SuccessFactors compensation space. My question is, given that Enterprise Compensation (ECM) has had large investments over the past 5 years and is included in the base user license, is there enough value-added functionality in SuccessFactors Compensation for customers to justify the additional subscription costs that solution requires?
Jeremy Masters: Hi Jarret. Thanks for joining. You are a legend yourself! If you don’t already, please follow Jarret on Twitter [end of commercial]. : )
You have asked a great question, and to be fair, the answer will be mixed. Some organizations that have already invested thousands (even millions!) of dollars/Euros/etc. into their ECM solution will not want to look at the cloud anytime soon. Others who have implemented a while back or have a lighter version should look at both solutions. SAP/SuccessFactors has been clear that their large investments will go to the cloud, and Comp is no different. Still, the decision is up to the client since they are still paying their annual maintenance costs.
Comment From Guest: If you are using SuccessFactors for ECM and SAP for payroll, if there is no 759 infotype created, how is the activation process for the basic pay and additional payments completed?
Jeremy Masters: That imported data is put in a temporary table before the process hits IT0015 and IT0008. Total bypass of IT0759.
Comment From Nicole Dobson: Is an organization able to use SuccessFactors regardless of its size without affecting performance?
Jeremy Masters: Yes. Like other cloud products, SuccessFactors can fully scale to support large organizations and therefore shouldn’t have an impact on performance.
Comment From Guest: How robust is the SF Compensation module as compared to ECM on-premise?
Jeremy Masters: We would need a whole workshop for that!
Comment From Margaret: If we go ahead with SF Compensation, but keep Payroll in SAP Core, is there already an integration built to extract compensation adjustments from SF and bring it back to SAP for standard compensation infotypes? How many compensation adjustment types can the current integration handle?
Jeremy Masters: Hi Margaret. Great questions! Yes, but the information will come back directly to your payroll-relevant infotypes. Read some more information here as well as in Luke’s article.
Comment From Luke Marson: Are you seeing SuccessFactors Compensation accompanying Employee Central implementations very often? Do you see a link between compensation and core HR processes?
Jeremy Masters: Another legend of social has joined us – thanks for joining Luke! Everyone needs to follow Luke on Twitter.
To answer your question, yes, there have been several projects where we see SuccessFactors Compensation/Variable Pay and Employee Central since customers are always looking for tighter integration.
For your second question – absolutely, there is a direct link between comp and core HR (e.g., changes in managers, salary, FTE, promotions during the cycle). Huge dependencies!
Comment From Guest: Are there any plans to look at developing a budget modeling tool for pay & bonus?
Jeremy Masters: Great question. I will let Deeksha Mittal, product manager for the Variable Pay product from SuccessFactors, answer this one!
Comment From Deeksha Mittal, SuccessFactors: Hi Jeremy. Great question regarding budget modeling! At present, the SuccessFactors compensation & variable pay modules provide flexible ways for defining budgets. We are definitely looking at more advanced modeling features that will help HR to develop more effective comp and bonus plans that are in-line with the company’s financial and HR goals.
Comment From Caroline: With no updates of IT0759, what would be the recommendation for reporting on Comp Award data? Would that come from SuccessFactors? How robust are reporting capabilities in SuccessFactors?
Jeremy Masters: Hi Caroline. Yes, I would recommend that you do the comp reporting in SuccessFactors, if that’s where your comp planning is done. And yes, SuccessFactors has robust reporting capabilities, including analytical tools and dashboarding.
Comment From Guest: Regarding going from EHP0 to a higher EHP to capitalize on newer functionality that SAP offers, if a company has never upgraded, would you recommend using an implementation partner to help with the expected technical changes?
Jeremy Masters: Yes, even a technical upgrade will most likely need external help, unless you have a kick-a$$ basis team.
Comment From Heinrich: As far as I know, SAP ECM doesn’t provide any standard authorization roles (although obviously Employees and Managers have access in ESS and MSS, respectively). Can you elaborate on some practical functional/business experiences in which other functional roles might generally be encountered, and why (e.g., various types of back-end HR access, legal, third party)?
Jeremy Masters: Hi Heinrich. There are some standard roles for even SAP GUI users. But, as with many of the roles, you will need to enhance to suit your organization’s business needs (including legal, third-party, etc. considerations).
Comment From Sam: You mentioned no current integration between Variable Pay and SAP. At this time, would you recommend large companies stay away from Variable Pay? The manual maintenance to keep it up without having Employee Central or the link to SAP must be quite cumbersome.
Jeremy Masters: Hi Sam. That’s an individual decision. I would put the solutions on the table for evaluation and see how integration plays into the overall importance of your project/system upkeep.
Comment From Deeksha Mittal, SuccessFactors: Hi Sam. Even though we do not have an integration right now, the Variable Pay product provides various other flexible methods to feed the data into Variable Pay. So, we recommend you evaluate the product and then make a decision on whether it works for your specific needs or not. Many large organizations are successfully using variable pay today.
Comment From Guest: Is there functionality from that temporary table in SuccessFactors to be able to add business logic? As an example, we have to split a bonus payment between a pensionable and non-pensionable wage type – would this be developed in SuccessFactors?
Jeremy Masters: SuccessFactors Compensation continues to evolve to make strides with being more open with respect to custom business rules for your organization. For example, their current eligibility engine is based on the Meta Data Framework, which provides a foundation for you as a customer to create specific logic to suit your needs. Handling a split between pensionable and non-pensionable wages shouldn’t be an issue in SuccessFactors.
Comment From Noel: Most customers I have worked with on Compensation use a majority of the ECM BAdIs, and I do not see too much they could do in the way of standard configuration to achieve such functionality. How does SuccessFactors handle such customizing requests?
Jeremy Masters: As discussed above, there is the MDF (Meta Data Framework), which SuccessFactors will continue to evolve to make the product more robust. At current time, there is no BAdI or Enhancement Spot equivalent (where you can just inject code into the standard code). There is the new SAP HANA Cloud Platform, which is a PaaS (Platform as a Service) where partners and customers can develop their own applications, but this is a topic for another time!
Comment From Mariana Doycheva: How does SF integrate with BW (in case ECM data is consolidated and reported in BW from SAP ECM)?
Jeremy Masters: Hi Mariana. SuccessFactors does integrate with BW, but we will see more investment in the Workforce Analytics module in SuccessFactors. Consolidation of data for reporting and other purposes for any hybrid implementation will be a huge, huge topic for years to come.
Comment From Robyn: What calculation does SAP’s ECM use for Percent in Range?
Jeremy Masters: Hi Robyn. It’s calculated from the range of the employee’s grade against the range of the max and min (from market data stored in T710).
Comment From Guest: How good is Global Employment/multiple currencies/languages and forms in SF compared to SAP? Is it better handled in SF than in SAP?
Jeremy Masters: Hi there. Good stuff. I can’t do a fair features and functions compare between SuccessFactors and SAP ECM, but I can say both have their pros and cons. This would be a meeting/workshop on its own. : )
Comment From Robyn: Bonuses are calculated based on level (manager, senior manager, etc., identified via separate pay grades), company, and performance rating. If an employee is promoted during the year, the bonus needs to take into account the number of days in each pay grade, number of days in each company, performance rating, and guideline percentages aligned to these dimensions. I assume a new 758 would need to be created to capture this movement and calculate the correct bonus amount. Is that correct? If so, does that new 758 need to contain unique values if this is all within the same bonus plan?
Jeremy Masters: Hi Robyn. That’s a specific question that would be better handled over email. Here is my email: firstname.lastname@example.org. I can help you offline.
Comment From NMV: If we go for a hybrid model of SF and SAP on-premise, what could be the challenges with respect to data security? And how do we deal with it?
Jeremy Masters: Hi NMV. I like those initials! : ) Typically, data security is not a problem in these hybrid scenarios. SuccessFactors and other cloud vendors have been moving data to/from external systems for years. SuccessFactors certainly employs more data security professionals than any customer.
Comment From Margaret: We are currently using ECM on ECC 6.0 EHP5. We have heavily customized the data being read into the portal with many custom function modules. We have also taken advantage of some of the BAdIs available for use. Can SF use any of the custom programming we have created so far? Or would we have to find another solution to get custom data created in SAP and fed to SF?
Jeremy Masters: Unfortunately, your enhancements done in SAP ECM cannot be leveraged in a SuccessFactors Compensation implementation, as they use an entirely different technology stack.
Comment From Guest: If we have implemented ECM in SAP, what would be the business case/business value of moving to SuccessFactors?
Jeremy Masters: This is a workshop item! Business case will depend on how much investment you already have in your on-premise implementation, and your HR Technology roadmap.
Comment From Mike Timm: What key factors have you seen affect whether companies go with SAP or SuccessFactors Comp Management?
Jeremy Masters: Hi Mike! Another one you should follow on Twitter.
Great question - one that I will be talking about during the upcoming HR conference in Orlando.
Comment From Krzysztof Zlamaniec: I read some time ago that the license costs for the SF BizX Compensation module depends on the number of users, while for the SAP ECM module there is one cost, not dependent on the number of users. Is this correct?
Jeremy Masters: Yes, that is correct.
Comment From Paul: Can we discuss what “off-the-shelf” interfaces are available for financial systems?
Jeremy Masters: Hi Paul. None from Compensation and Variable Pay at this time.
Comment From Eric Amsrud: Why do you think that SAP is investing in both ECM and SF for compensation planning whereas in other HR modules that SuccessFactors has a solution, SAP has been more clear about the future direction and development? Will both coexist?
Jeremy Masters: Yes, both will coexist for a long, long time, but investment dollars will be in the cloud.
Comment From Eric Amsrud: In your professional opinion, which solution (ECM/SF) provides the most robust capabilities for a large multinational business?
Jeremy Masters: For large multinationals with typically complex business rules, you will need to evaluate both side by side. Unfortunately, not a quick answer for that one. ; )
Moderator: Thanks to everyone who joined us today!
Jeremy Masters: Thanks everyone. Please join me at the HR2014 event in Orlando or in Nice, France, and check out my website for some blogs on interesting topics, and please follow me on Twitter.
Deeksha, thanks for stopping by as well!
Moderator: If you’re interested in more from Jeremy on Compensation Management, you’ll find him at his dedicated session on this topic at HR 2014 in Orlando this spring. Be sure to stop by his detailed session on the topic – it will be just one of his sessions there – and say hello!
Thanks again everyone!