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Q&A on Personnel Administration Configuration and Best Practices for Global SAP ERP HCM Implementations

April 20, 2016

A growing enterprise is a thriving one, and one of the biggest — and richest — opportunities for growth lies in the global market. However, moving into a global market also increases the complexity of operations across lines of business, particularly when it comes to personnel.

So what does this mean for SAP customers with on-premise SAP ERP Human Capital Management (SAP ERP HCM) implementations? What considerations are involved for implementations that cover multiple countries, and how do you manage the intricacies of global personnel administration (PA), most notably concerning organizational structure, authorizations, and payroll integration?

HR 2016 speaker Sven Ringling recently fielded readers' questions on designing personnel structures in a global enterprise and SAP ERP HCM implementations, such as:

  • We have many countries where we have less than 50 employees. Does it still make sense to use SAP HCM in these countries?
  • As SAP SuccessFactors covers all HCM solutions, is SAP still investing in HR sub modules? Which SAP ERP HCM sub modules are going to be obsolete?
  • What is the difference between SAP SuccessFactors leave request and ESS leave request?
  • What is difference between employee self-service (ESS)/manager self-service (MSS) leave request and the time off module in SAP SuccessFactors?
  • Does it make sense to roll out SAP HCM now, when SAP plans to replace it with SuccessFactors?
Live Blog Q&A on Personnel Administration Configuration and Global SAP ERP HCM Best Practices


Natalie Miller, SAPinsider: Hello and thank you for joining today’s live Q&A on personnel administration configuration. I’m Natalie Miller, features editor of SAPinsider and insiderPROFILES, and I’m pleased to introduce today’s panelist, Sven Ringling, Director of iProCon Ltd. Sven is also a scheduled speaker at our upcoming HR 2016 event in Vienna this June.

Sven Ringling, iProCon Ltd.: Hello. Thanks a lot, Natalie, for the introduction and to SAPinsider for inviting me. I’m looking forward to this session!

Comment from Guest: Dear Sven, good morning. I have a question about the internal number range for organizational management (OM) objects. While creating a new position, it is skipping the current sequence for 20 numbers and creating the position with the 21st number. Later, when I again create a new position, it is getting back to the old sequence and starting from the number where it was skipped. What could be the reason and possible solution? Thanks and regards.

Sven Ringling: Hi. I’m afraid that’s the standard behavior of the number range and it has nothing to do with HR. For performance reasons, the system takes some numbers into a buffer to work with and then gives back later what it didn’t use. This is set deep in the definition of the number range object in transaction SNRO. But for a standard object, I wouldn’t recommend changing it. Always remember: Numbers are nothing – they are just for the system to find data. Users shouldn’t be concerned about them.

Comment from M. Bakar: We are implementing a learning management system (LMS) and appraisal functionality in SAP SuccessFactors, and users require interfacing between SAP SuccessFactors and personnel administration, which can easily reach 15 fields. That leaves no room for future interfacing as we plan for other SAP SuccessFactors recruitment and talent management modules. How can we best handle fields limitation?

Sven Ringling: Hi M. Bakar. What is your setup for the integration? Are you using standard talent hybrid? Are you using Dell Boomi? Is that putting the constraint on you?

As a rule, keeping the interface lean is a good idea anyway. I’d also try to only use one point of contact on the SAP SuccessFactors side: the employee (EE) profile (as long as you don’t use SuccessFactors Employee Central. LMS can feed off the EE profile via standard integration between the platform in your talent instance and the LMS instance.

Fifteen fields can be a lot, if designed properly, but when you start looking at SAP HANA Cloud Integration, there should be more options. And in the long run, SAP HANA Cloud Integration should be the way forward – at least as long as the only alternative is Dell Boomi.

Comment from Madhusudhan: Hi, good evening. What is difference between employee self-service (ESS)/manager self-service (MSS) leave request and the time off module in SAP SuccessFactors?

Sven Ringling: That could be a very long answer. The short one is that the first is a 20th-century solution; the second one is worthy of 21st century.

Basically, time off is very mature by now and can cover most things the old solution can. Configuration is much easier, but obviously you can’t add your own code to implement unconventional things. But why would you need that in a leave request?

By now, time off has more flexibility. You can create ad-hoc schedules for individuals, avoiding the usual issue of having hundreds of schedules to configure on premise. You can also capture open-ended absences, which was something we always wanted to have in the old solution for the UK, but couldn’t. One of the latest features in time off is recurring absences: Rather than capturing 20 absences individually, you can say ‘This employee has half a day off every Monday morning for the next 20 weeks’ and create them all in one. You see, it’s becoming more and more user friendly.

What it doesn't have yet is the special rules for paternity and maternity leave for all countries, but that’s coming: Germany, UK, and Singapore are expected this summer.

In short: If I had a choice, I’d go for time off. It’s definitely better for small and medium customers. For very large companies, it’s maybe not yet beating the old solution, but it will in the not-too-distant future.

Comment from Alejandro AA: Does it make sense to roll out SAP ERP Human Capital Management (SAP ERP HCM) now when SAP plans to replace it with SAP SuccessFactors?

Sven Ringling: If you can avoid it, I wouldn’t do it now. There may be good reasons, of course, but if I had SAP ERP HCM in one country now and wanted a world-class HCM solution in subsidiaries, my first option would be to pilot SAP SuccessFactors Employee Central in the subsidiaries and use a side-by-side integration model to integrate with the old SAP ERP HCM until you switch there as well.

But this question deserves a 1-2 days strategy workshop to analyze your situation.

Comment from Guest: If a company purchases a license for SAP ERP HCM, is it a best practice to do standard configuration changes if that is a client requirement?

Sven Ringling: I’m not sure I understand your question. Are you asking whether a client should do configuration? By all means, yes! That’s what configuration is for. What you shouldn’t do are modifications, and what you should minimize is custom programming.

Comment from Guest: What is the difference between SAP SuccessFactors leave request and ESS leave request?

Sven Ringling: See the answer to same question referring to the time off module, which includes SAP SuccessFactors leave request.

Comment from Alejandro AA: We have many countries where we have less than 50 employees. Does it still make sense to use SAP ERP HCM in these countries?

Sven Ringling: Yes. You still want global reporting and global talent management. But, you must think about what makes sense in small countries and what doesn’t. I always suggest a tiered approach, where you define a tier model for all your countries. If you attended HR2014 in Nice or Singapore, you’ll find session slides from me where a tiered model for global template is introduced.

Having said that, think whether or not it’s better to start using SAP SuccessFactors Employee Central for these small countries now using side-by-side integration between SAP SuccessFactors and your on-premise SAP model.

Comment from Kguduru: As SAP SuccessFactors covers all HCM solutions, is SAP still investing in HR sub modules? Which SAP ERP HCM sub modules are going to be obsolete?

Sven Ringling: In 2025, as per the current roadmap, they are all obsolete. But you can see that until then, there still is limited investment. For example, user experience is improved across all modules with SAP Fiori and legal requirements are still covered.

Today, I would not recommend you implement a talent, learning, or compensation module on premise. The same goes for SAP Travel Management. Definitely stop investing there and use Concur, a far superior product already.

There may be reasons to do it for core HR, payroll, or cost planning and simulation.

CATS (cross-application time sheet) will survive in some shape, but that’s not really HR.

Comment from Giri: Some West African countries pay salaries in two currencies. (For example, part of an employee’s net pay might be in local currency and the rest in USD.) How can pay be best configured for this scenario? Note: Both currencies have deductions based on the employee’s absences, loans, and so on.

Sven Ringling: That very much depends on the exact setup. How are taxes, etc., calculated? Are there tax tables in two currencies or is it converted first? What’s in the contract?

I’ve implemented payroll accounting (PY) in Chile, where they have Chilean Pesos for normal salary, but artificial currency UFF for some loans and deductions. That’s not a problem. But you need to look into details and check with an expert for your SAP country version. Sorry I can’t really help with the details, but there are all kinds of scenarios.

Comment from Alejandro AA: My concern is more related to how the market is moving. Are clients of a certain size investing in SAP ERP HCM on premise or are they going directly to SAP SuccessFactors? Does it still make sense or is there any advantage to starting with on premise?

Sven Ringling: Well, predictions are always difficult, but the market is definitely going towards cloud.

There are differences between countries, modules, and industries. The US, Netherlands, and UK go fast. Germany is very slow. Public sector is also slower than the private sector; core HR, compensation, and payroll are slower than talent and learning. But, the direction is clear everywhere: Unless a big surprise happens, cloud HCM is the future.

Is there an advantage from using on premise? No. Implementing on premise now is usually a disadvantage you accept because there are constraints that don’t allow you to go to cloud (with the exception of payroll). If you have restrictive processes that require a lot of custom programming but you can’t change them because of internal politics, that’s when you implement on premise.

Comment from Guest: Dear Sven, good morning. My client is planning to implement SAP SuccessFactors Compensation. Should they implement any other SAP SuccessFactors modules for this to run smoothly for the business?

Sven Ringling: You should always implement ‘Platform’ with the EE profile (employee profile), and so on. It should go without saying, but I’ve heard some big integrators suggested not to use Platform.

Otherwise, you can go with SAP SuccessFactors Compensation only. It’s always better if you have more modules to integrate with each other, but you have to start somewhere. But, make sure it covers all you need and you don’t need variable pay (VP) as well. That’s a separate license.

Further steps: SAP SuccessFactors Performance & Goals goes very well with SAP SuccessFactors Compensation, and of course, SAP SuccessFactors Employee Central.

Comment from Pradyp: Hi Sven. What is the future of SAP for Human Resources? How much is SAP SuccessFactors Employee Central taking the cut of it? I would like to understand how an on-premise solution will handle the future transformations?

Sven Ringling: Hi Pradyp. What do you mean by ‘on premise’ and ‘future’? As of today, we have to plan on the basis that SAP ERP HCM on premise doesn’t have a future after 2025. Until then, it will manage transformations as it always did.

Comment from Dieudonné Tobbit: Hi Sven. Have you ever experienced a PY in SAP rollout to France where employee subgroups were maintained in accordance with the group categorization? If yes, what impact does this have on payroll given that employee subgroups are legally defined and many social contributions are closely linked with France categorization of the employees subgroups? Thanks and best regards.

Sven Ringling: I’m not an expert on France, but I know some customers have used other fields to cover the legal requirements. The ‘Contract’ field in Infotype 0001 (technical name ANSVH) is an option because the entries are per country grouping (rather than just eligible for one or many country groupings as EE subgroups). That would definitely be a much better design on the data side, but I’m not sure whether that requires any amendments in the payroll schema or legal reporting.

What I do know is that you’ll need an awful lot of action reasons for France – most notably for leaving. As a rule: If someone says ‘EE subgroups (or any other fields) are defined by law’ I’d always double check. The law may require certain categories/groups, and so on, for legal reporting or tax calculations. But the law doesn’t say ‘the EE subgroup field in SAP must have this or that content.’ So, you should never go by the name of a field, but instead look at which fields can cover legal requirements best in the technical context of SAP and your corporate template.

Some questions were about the future of SAP ERP HCM and the SAP cloud roadmap. Maybe this article from my blog will help.

Comment from Guest: In your opinion, in terms of the flexibility and customization, which is the better solution: SAP ERP HCM or SAP SuccessFactors?

Sven Ringling: Ok, someone will shoot me for my answer here no matter what.  If you ask for ‘flexibility at all cost,’ you can’t deny SAP ERP HCM is more flexible. You can do anything you want, if you have the money and time. However, you may need more customizations. SAP SuccessFactors definitely strikes the better and more future-proof balance between flexibility and innovation.

Comment from Alejandro Hdz: As you have written about payroll staying on premise, is there any plan to forward payroll to SAP SuccessFactors? Or it will be a big job? Thanks for your reply.

Sven Ringling: No. It’s not staying on premise. But today, I’d not recommend for all customers to move it to the cloud. There is a cloud payroll (SAP SuccessFactors Employee Central Payroll and Easy Payroll). Technically, it’s not really cloud, but a hosted version of the on-premise payroll you know. Integration with SAP SuccessFactors Employee Central is better than the on-premise one, but there are still challenges to overcome if you have a lot of customization. So, it’s there, it’s growing, and it makes sense in the long run so you can switch off all your HR-related servers in SAP and benefit from a life without your own infrastructure.

But, it’s probably the last module most customers would move to the cloud if it works well on premise.

Comment from Guest: Can you give a very brief account on Concur? For example, what are the functionalities it provides? What are the interfacing opportunities of Concur with SAP or SAP SuccessFactors?

Sven Ringling: We just agreed to write a book about it. It covers expenses, travel booking, travel request, intelligence, integration with hundreds of vendors and Travel Management Companies (TMCs), employee messaging / duty of care services, and more.

It has good mobile support. Current integration includes cost objects from financial accounting modules in SAP to Concur; posting from Concur to the financial account module; master data from HR to Concur, and so on. Check out this link for more.

Comment from Guest: Is it possible to have different employee number ranges in SAP SuccessFactors for legal entity specific or country specific?

Sven Ringling: Not really. But the number shouldn’t have a meaning, anyway.

Natalie Miller: As we come to the end of today’s Q&A, I’d like to thank you all for joining us and for all these great questions! And a big thanks to Sven for these insightful answers! 

Sven Ringling: Thanks a lot, everybody, for participating. That was challenging, but fun. Please meet me in Vienna, if you are there. If not, why not? Or engage on Twitter: @svenringling. Have a wonderful day!

Natalie Miller: Thanks again everyone!

Meet the panelist:

Sven Ringling Sven Ringling, Director UK, iProCon Ltd.
Sven Ringling is an SAP HCM (cloud and on-premise) consultant with a passion for bringing processes, people, and technology together, and for sharing knowledge. He has been working as an SAP HR consultant since 1996. He has since cofounded iProCon GmbH in Germany in 2000 and London-based iProCon Ltd. in 2011, and has worked on more than 50 SAP HR as well as SuccessFactors and Concur projects in several countries, most notably in the UK and Germany. Solid technical and process skills together with valuable experience in several change management assignments make international rollouts one of his favorite types of projects. In addition to core HR and organizational management, Sven specializes in HR authorizations, Time and Attendance, as well as change management, including cloud transformation. He is certified in SAP HCM Workforce Process Management and SuccessFactors Employee Central.

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