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New SAP and SuccessFactors Cloud Payroll Offering

SAP and SuccessFactors quietly launched the beta release of cloud payroll for USA, Canada, Mexico, UK, Germany, Switzerland, Netherlands, Australia, Brazil, and India for customers using Employee Central last week. I had the opportunity to get a briefing from SAP and SuccessFactors a few weeks ago and thought I would share my thoughts.


The initial release is a bit of hybrid approach where the basic employee records maintained in Employee Central are replicated “almost real-time” to the cloud payroll environment and all the payroll data will be maintained in the cloud payroll system. The payroll administrator will execute all their processes (i.e. Running Payroll, Banking, and Posting to FI) inside the hosted cloud payroll system.  Here are some of the specific product details:

  • Offers integration between Employee Central, SAP Payroll (Cloud) and SAP OnPremise Financials
  • Uses SAP Payroll which I believe is the best global solution in the marketplace
  • Hosted by SAP/SuccessFactors cloud organization in their German data center with a plan to roll out to regional centers in the future
  • Single tenant with a three tier landscape
  • Uses Boomi for replication but strategic direction longer term is to use PI OnDemand
  • SAP/SuccessFactors provides the software and hardware installation and maintenance
  • Customer has full control over payroll implementation and processing and not a BPO offering

Payroll Screenshot.jpg

Future Roadmap (Planned)

The updates schedule will follow the SuccessFactors quarterly release schedule and here is what is “planned” for October, 2012.

  • Extended employee mini-master replication for the initial10 countries
  • Master Data UI harmonization for the initial 10 countries using the latest WebDynpro developments from the HR Renewal project
  • Selected processes can be executed from Employee Central such as an employee viewing payslip
  • Selected master data reports

Here are the updates “planned” for February, 2013

  • Mini – Master replication for additional countries
  • Full Master data UI harmonization for the initial 10 countries
  • Additional payroll transactional UI harmonization in areas such as payroll reporting, off-cycle, configuration tools etc.
  • Additional country specific reporting


Having been engaged in many high profile SAP Payroll projects over the past 14 years I know firsthand how important it is for companies to get payroll right as there is little room for error. Many of the high profile enterprise software failures have been payroll related and the most common cause has been poor or inexperienced consultants. Given that the foundation of SAP Cloud payroll is based on the SAP OnPremise Payroll solution it is extremely important that any SuccessFactors customers looking at this offering make sure they engage with SAP Payroll consultants with the specific country experience as that will be the core skill set needed.  On that note here are Seven Tips to ensure you hire the Right Consultant

This has been a huge undertaking for both the SAP and SuccessFactors teams and while I think some solid progress has been made in a short period of time there is still a long ways to go. In a perfect world I would have liked to see SAP and SuccessFactors start development on a next generation multi-tenant payroll solution which Naomi Bloom does a very good job in outlining the benefits in this article but it is obvious that the complexity and length of time it would take as well as competitive pressure influenced that strategic decision.  In general there are several differing viewpoints around multi-tenancy and I think Phil Wainewright does a good job of unraveling different viewpoints in his recent Multi-tenancy: are they selling you a pup? article. The bottom line is SAP has a history of having their payroll solution used at many large Global and Fortune 500 companies so I have no doubt that over the next 6 to 12 months they will be able to move this from a Beta solution to a more complete product offering.

Payroll Screenshot.jpg
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  • Thanks for the additional detail Jarret. It's interesting to see how SAP/SFSF are stitching together the two systems. I'm curious to see just how much SAP plans to deliver as a package to help clients get started - that will determine just how much effort will be required to get payroll going. Still, any large, complex organization is going to require a lot of effort to implement payroll regardless of the technology - it's just complex.

    • Thank for the comment and "stitch" is a very appropriate word to use.  As far as I have heard there no package to help customers getting up and running on cloud payroll but it wouldn't surprise me if longer term there is a RDS for it. It is one of the key reasons why I mentioned the type of "consultants" customers should be looking for as it is important that they find someone with SAP Payroll experience if they need assistance with their implementation.

      • This sounds a lot like ADP's GlobalView offering where they run an SAP Payroll back-end and use their own ADP UI for the front-end...only thing different here is that they're running SuccessFactors as the front end...poses interesting questions about data security and location, e.g., will high security US-based companies allow their sensitive HR and payroll data be located in data centers outside of the US?

        Very curious to see how the 2 different data models behind each underlying database get merged...this is not going to be an easy task...will SuccessFactors evolve into the SAP UI that SAP should have provided and the track-record proven back-end SAP data model remain? Very interesting merger where for once SAP applications might actually be relegated to 'behind the scenes' with an acquired company's software becoming the new 'face' of SAP applications!

        • Graham I have similar questions on security, but even more so I wonder about SOX compliance for publicly traded US companies.  Today SuccessFactors has reported controls under the SOC2 report, however they have not yet done SOC1.  Given this, how can they meet any auditor's standards on general computer controls related to financial reporting, when a payoll interface could have a direct impact?

          • My understanding is that given that this solution is an in-house payroll solution deployed in the cloud, not a BPO or service bureau application, SOC 1 or SSA16, formerly SSA 70 may not be necessary, because it is mainly required for service bureaus. That said, SAP does recognize that Workday is SSA 70 Type II certified (not yet SOC 1), so they are going to keep their eyes on what the market expects. Any thoughts?

        • Thanks for the comment Graham and I hadnt thought of a ADP GlobalView comparison.

          I asked the specific question about when a US Data Center was planned for the very reason you mention and heard it was on the roadmap.

          As far as different data models it will be SAP Payroll data model on the backend (reason SAP Payroll consultants not SuccessFactors will be needed) with the SuccessFactors UI (although will take awhile to build that out).  Usability of SAP Payroll has always been a complaint so it will be interesting to see how far they can take that given there are using underlying software that is 15 years old.

  • Hi Jarret,

    Good job on putting this together as I think it's the first real information we've had from anyone remotely close to a Payroll expert. I think there is a lot more to come in this area, but it will take time while Employee Central is bought upto scratch.

    Best regards,


    • Thanks Luke and it is actually the first information released (outside of a high level press release in May) although I hear a SuccessFactors blog on it may be released today.  It was definitely a "soft" beta launch and I would expect we will hear a lot more publicly after the October release.

  • Just the information that the HCM-IT community had been waiting for!

    This scenario is very reminiscent of Oracle Fusion launch some 10 years ago. I hope this integration will be smoother than that.

    SAP's payroll is very powerful in terms of capabilities but needs serious work in usability area.  If SAP has to hit the sweetspot of global payroll, ease of use is the key - which is what SFSF has a potential to deliver. For this marriage to be successful, I think a bit of internal streamlining of payroll would be great.

    Any word about support strategy? Will it be one combined track or are you looking at separate timelines on your calendar?

    • Thanks for the comment and kind words Ketan. From my understanding if you are referring to support such as BSI/HRSP updates they would follow the general release but there has been no guidance on the SLA's to get those into the "Cloud Payroll" environment.  I will see if I can get some more clarity and report back to the group.

      • I touched base with SAP and they confirmed that HRSP and BSI updates will be "available" on the same schedule as for OnPremise which you would expect but the final decision on the SLA on getting them installed is still in discussion. At a high level there will be a regular maintenance schedule during which available HRSP and BSI updates will be installed upon customer request.

  • Thanks for putting it together Jarret.

    How about the interfaces to/from payroll system? they will all go through cloud? and How about custom coding, reporting off of payroll?

    Most importantly, how the IT teams will look like in cloud based payroll? Are functional and technical experts going to hit the streets?

    • Thanks for the kind works Shafiq and the integration between SuccessFactors Employee Central and the SAP Cloud Payroll will be delivered using Boomi with a longer term strategy of being replaced by SAP PI OnDemand.

      All the custom coding, development, set of of payroll will happen in the cloud payroll (which is SAP OnPremise) and given this the IT team will be very similar to how an existing SAP Payroll team should look.

      Hope this helps