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In January, SAP announced a major accomplishment of offering the Business Suite on HANA for Ramp Up customers and much was written on the topic. Unfortunately there were no details provided on what this would mean specific to SAP HCM so our podcast group got together shortly after to record SAP Business Suite on HANA – An HR Focus to provide our initial reaction. Over the past month I have pulled together more insight around how HANA is going to impact HCM and I thought I would share with the community. At the core SAP plans to use the real time data access and speed of SAP HANA to set the foundation for reporting/analytics, embedded intelligence, forecasting, improved user experience, modeling, planning and simulation. SAP shared this planned roadmap around SAP HCM on HANA at HR2013 a few weeks back.

SAP HANA.png

Here is some more detail around several of the HCM specific HANA solutions that SAP has already released or are under consideration to be delivered over the next 18 months.

HANA – Enabled BW Solutions (Currently Available)

SAP BW for HR – At the core the biggest benefit is accelerating load times and query response times so there is “right time” availability of information for HR users. This will allow the ability to browse and correlate across a wide variety of HR data and piece together important information on the fly. I know several HR customers that are currently analyzing BW on HANA and have overall the reaction has been positive.

Executive HR Analytics – This Rapid Deployment Solution(RDS) will allow customers to discover trends across 40-key HCM metrics and drill down along the org structure/cost center hierarchy to zoom in on key trends. Some of the benefits include the ability to monitor workforce KPIs, assess performance against benchmarks and proactively manage the workforce based on “hard” data across the organization. 

Advanced HR Analysis – The Rapid Deployment Solution(RDS) will offer the ability to analyze workforce KPIs to fulfill ad hoc requests using real-time data as well as search workforce information by using natural words and simple visualizations. This will offer customers the ability to better support their business by delivering analytical answers to HR questions, reduce the workload of HR IT and analyze workforce data to arrive at root cause of problems.

Operational Headcount Planning – Will help align corporate workforce demand with operational planning by offering cascading headcount and salary throughout the organization. It will allow aggregated views with the ability to drill down to details and predefined reports delivering insight into workforce composition and cost.  Some of the business benefits include:

      • Simplify the budgeting process.
      • Improve business user satisfaction and visibility into the planning progress.
      • Improve the quality and accuracy of the salary and headcount planning process.
      • Assess the impact of new hires and promotions on workforce cost.
      • Avoid hiring that is not aligned with the skills the company needs.

HR Core (Under Consideration)

Hierarchy Traversal – This will bring significant improvement to overall application performance of structural evaluation paths, which has long been a pain point for SAP customers. The performance improvements of existing functionality in structural authorization, structural search and data inheritance is pretty exciting for an older timer like me.

Operational Reporting – Will enable real time operational reporting for core HR, including headcount, org management, time management, skill and competencies, and talent management. Need to get more specific details on this one, but it seems promising.

Payroll Reporting (Under Consideration)

In order to fully utilize the benefits of HANA, SAP has built functionality to “de-cluster” the time and payroll results. This de-clustering functionality is currently available for China and Austria with the United States planned next.

Reconciliation Reporting – This will leverage SAP’s in memory platform to decrease processing time of reconciliation report, which is one of the most important and commonly used SAP payroll reports. 

Garnishment Order Fulfillment –Will analyze garnishment order fulfillment at the company level and drill down to employee/order level as well as review historical data for employee’s disposable income and analyze employee’s medical benefits. It is important that SAP US Payroll customers review their garnishment configuration along with enabling this report, as I know many customers are not following the updated 2013 American Payroll Association garnishment rules.

Compensation Reporting – Will provide historical trends in compensation based on master data, time data and actual payments stored in the payroll results. This will allow the payroll department to reduce the time needed to identify the errors and inconsistencies.

Overtime Payments – Will offer historical trends in overtime payments by pay period/earnings/taxes/deductions with drill-down functionality to employee level, which includes any master data and time management data stored in payroll results.

Payroll Analytics (Under Consideration)

Payroll Audit – Will compare and analyze payroll results by pay period/earnings/taxes/deductions with drill-down capability to the employee level.  This will be a very popular addition as many of my customers have built a custom report or used a 3rd Party tool such as spinifexIT (they offer much more) to help with their balancing.

Retroactivity Analyzer – Will analyze retroactive calculations for pay period and compare across the pay periods as well as offer drill down capability to help identify the reason of retro calculation on any level from the tax company to the employee. The retroactive functionality is extremely powerful and valuable part of SAP payroll that is often misunderstood. Any report that helps provide more insights into those calculations will be very popular.

Simulation Analyzer – Will compare the payroll results of a simulation run to the previous pay period’s production runs and analyze the differences on a pay period/earnings/taxes/deductions perspective with drill-down functionality to employee level. There is no doubt this will help payroll department be proactive be more proactive, ensure payroll errors are caught early and reduce the number of claims and retroactive processing that occurs.

Flexible Analyzer – Will analyze and compare payroll results for selected group of employees based on certain master data criteria stored in payroll results.

Modeling (Under Consideration)

Benefits Modeling – Will focus on different employee groups by analyzing the benefits historically offered, and evaluate how the demographics and geographies are changing, evaluating how engagement and satisfaction of workers are impacted by the provided benefits, performing what-if and negotiating with providers to determine best options and price for short and long term. Some of the benefits include better insight to get the best rates, which provider(s) to choose, what benefits to provide to which group of employees, what 401K, retirement, or pension plan to offer and what’s the cost to the employee and employer.

Compensation Modeling – This will enable linking of compensation plans with detailed employee performance to get visibility into the impact on the financial plan. It will enable HR to perform simulation analyses as well as economic and reward scenarios to distribute a budget / hike across a company based on performance, compensation ratio and other factors. Some of the benefits include:

      • Improved efficiency in compensation planning and budgeting.
      • Edge in company competitiveness and attraction/retention of best people.
      • Simulation and what-if enables recommendation of most effective scenario.
      • Quickly identify unusual cases.
      • Provides transparency of the process to the line of business manager.
      • Better visibility into employee “true costs” and performance impact.

Organization Modeling – This will allow customers to model alternative organizational structures, taking into account impact of on related organizational and financial KPIs, and automate the implementation of the organizational changes. It will provide deeper insight into the composition and skills of the workforce in the new structure to ensure a balanced workforce.

Analysis (Under Consideration)

Social Media Analysis – Will integrate social media channels into company brand management, recruiting, and employee sentiment analysis. One of the benefits includes building a high performing and engaged organization.

Social Network Analysis – Will provide the ability to analyze social media and make recommendations for new connections (i.e. SAP_Jarret ๐Ÿ™‚ ), filling a learning gap, finding expertise, identifying mentors to help build a high performing organization. Some of the benefits include improving the understanding and reach into talent and job candidates and Identifying issues in social media that could lead to negative employee sentiment.

At the core I think the SAP HCM team did a very good job in identifying key use cases for their initial investment, as it will address many pain points I have seen at my On-Premise customers over the years.I am a big believer in the benefits of in-memory technology and where I see the true potential for disruption is if SAP can unlock the 3rd Party developer ecosystem to start building applications that most HR departments don’t realize they need until they became available.

I was pleasantly surprised to hear that a majority of the applications listed above will be available for no additional cost for customers that have their Business Suite on HANA or Side by Side (ie BW on HANA, Industry Solution on HANA). While I think it will be challenging for SAP HCM customers to make a business case on their own to move to the Suite on HANA it is important that they are aware of the SAP HCM roadmap so they can partner with other groups within their organization as it is pretty obvious the Suite on HANA is the future for SAP On-Premise customers.

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19 Comments

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  1. Brandon Toombs

    Jarret-

    Great content as always!

    Do you get a sense of how SAP is positioning “Hana Enabled BW Solutions” versus SuccessFactors Workforce Analytics?  I realize that this is one of those areas where the official direction is development will continue on both platforms but this will be vexing to clients trying to decide where to invest.

    Similarly, I think that social media analysis sure sounds similar to tools available in Jam.  If HANA can deliver social analysis across various platforms I could see it being a welcome addition though.

    Thanks

    Brandon

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    1. Jarret Pazahanick Post author

      Thanks Brandon and it is interesting as by the end 2013 SuccessFactors Workforce Analytics should be HANA enabled as well so it will really come down to the best solution depending on what a functionality a customer has deployed. I think this area will be challenging for SAP/SuccessFactors as both are solid offerings so it wont be as cut and dry as many other areas on the roadmap especially for those using a hybrid deployment approach.

      I was most excited about the payroll reporting/analysis and the hierarchy traversal as they meet some pain points I have seen across several customers. It will interesting to see how the adoption is with the Suite on Hana as well as if SAP can deliver on their roadmap but overall I am optimistic.

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  2. Luke Marson

    Hi Jarret,

    Great blog and thanks for taking the initiative on getting this content out there. There are a lot of great things coming with SAP on HANA for HCM and particularly the Payroll and modeling functionality will provide businesses with new ways of doing things that they couldn’t before. These are the first steps of “not knowing you needed it until you had it”, to roughly quote Steve Bogner.

    I like the social stuff, but I think this is just an “extension” of already existing social media functionality that is available for other functions.

    Best regards,

    Luke

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    1. Jarret Pazahanick Post author

      Hi Luke

      Thanks for the comment and kind words and if SAP can deliver on this roadmap I believe that HR OnPremise customers that are able to make a business case for Suite on HANA (or Side by Side) will be happy.

      Something tells me when we heard the non-quantifiable “massive investment” in OnPremise a majority of it is around the HR Renewal and these SAP HCM HANA initiatives.

      Regards,

      Jarret

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  3. Jeremy Masters

    Jarret,

    Bravo! Great information. I especially like your comment:

    where I see the true potential for disruption is if SAP can unlock the 3rd Party developer ecosystem to start building applications that most HR departments don’t realize they need until they became available.” 

    This is so true, as 3rd parties have been an important part of the SAP eco-system since we can push innovation since we are in the trenches with the customer.

    Best,

    Jeremy

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    1. Jarret Pazahanick Post author

      Thanks for the comment and kind words Jeremy as I could not agree more around 3rd Party vendors pushing innovation if they see an opportunity and platform to do so. I feel that SAP has missed this opportunity (to-date) on the mobile side but am much more optimistic around HANA.

      Hopefully are going to spend this weekend brainstorming on Worklogix’s first HANA app ๐Ÿ™‚

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  4. Chris McNarney

    “Hierarchy Traversal – This will bring significant improvement to overall application performance of structural evaluation paths, which has long been a pain point for SAP customers. The performance improvements of existing functionality in structural authorization, structural search and data inheritance is pretty exciting for an older timer like me.”

    I know people who will openly weep in the streets if this really comes to fruition.

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      1. Frans Smolders

        Hi Jarret, hi Carsten,

        We don’t have an official roadmap published. But here are some dates:

        Currently out:

        – Declustering (although not HANA specific, it’s very important for HANA usage) Check notes 1774918 and 1779373

        – HANA Live analytics for HCM. These data models can be embedded in the new analytics functionality for MSS that was delivered in HR Renewal FP4

        – HANA based acceleration if the inbox for the Shared Service Agent for faster search

        To come:

        – Payroll process powered by SAP HANA

        – Hierarchy traversal (faster processing of hierarchies, which intends to speed up e.g. authorizations and reporting capabilities)

        And we have a lot of things under consideration. But the ones described so far are the most concrete. In addition, Employee Central runs on SAP HANA, BizX will run on HANA and so will WFA. That will provide us dramatic improvement for data integration.

        I’ve also written a blog on the HCM on HANA topic: http://scn.sap.com/community/erp/hcm/blog/2013/08/23/what-are-the-benefits-for-hcm-when-your-suite-runs-on-hana

        Please let me know if you have further questions.

        cheers,

        Frans 

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  5. Jeff Faulds

    Hi Jarret,

      As usual ,  when I am faced with answering some questions and researching something “cutting edge” you have already been there and documented it for all of us in a concise and easily understandable manner. 

    Thanks for all your hard work.

    Jeff.

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  6. SAP OCEAN

    Hi Jarren, Luke and other experts

    I have a long questions to raise and i don’t have answers. This is being hammering my mind for quite sometime. Hence, experts, i need your help. Sorry in advance, for such a lengthy questions. You early response is appreciated.

    I am a SAP ECC on-premise functional HR consultant. I am going to ask questions on multiple oceans i.e. HANA, Success Factors, HR BO, HR Mobility. I don’t know much details about it like you. However, I have some basic common questions which could you please clarify.

    1. What is the role of HR consultant in HANA? Does the configuration node and table change from on-premise to HANA? If so, can you give some examples for a module like PA. What does he need to learn in HANA for a functional HR consultant?

    2. Will HANA certification be useful for a HR functional consultant? If so, in what ways?

    3. Success Factors – Offers a limited flexibility to modify to the client HR processes compared to on-premise (correct me if i am wrong). This is a bottleneck for implementations at big corporations. Hence, if I may say so, that success factors can be good selling point for Small and Medium Size businesses. If that is the case, a on-premise HR consultant has to now shift his focus to Success Factors, as the on-premise HR is reaching a saturation point or he now needs to focus on SAP BO or Mobility.

    4. Continuing the above question, if a functional HR consultant need to focus on BO or Mobility, as these are more technical coding in nature rather than functional, What will be his role? Will there be any HR configurations or just gather and list the requirement such as different kinds of HR analytics reports required for a company.

    To summarize.

    What is the future for a functional HR consultant? In which areas, does he need to focus in the years to come? This question is raised because almost all the fortune 500 companies have already implemented SAP & the HR module. So, is it a dead-end?

    Based on your feedback, I will think and analyse whether to stay in HR technology or move to the domain functional HR or to the project mgmt arena.

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    1. Jarret Pazahanick Post author

      I plan to publish another “The Future of SAP HCM and SuccessFactors Consulting 2014” in the next 2.5 months which will answer much of the above. Here is last years.

      The Future of SAP HCM and SuccessFactors Consulting – 2013

      The SuccessFactors “offers limited functionality” is a myth in a lot of ways. Check out

      My Thoughts on SuccessFactors Employee Central as well as all the great blogs Luke Marson has written on SuccessFactors.

      I am a strong believer that we are in the early innings of a major shift from client server technology (ie SAP HCM) to cloud based HR technology. I recently provided my thoughts on a radio interview you might find interesting.

      Jarret Pazahanick at Lunch with DriveThruHR 12/05 by DriveThru HR | Social Networking Podcasts

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      1. Luke Marson

        I agree with Jarret that “offers limited functionality” and “is a bottleneck for implementations at big corporations” are not accurate statements, especially with the pace of innovation taking place right now.

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  7. SAP OCEAN

    Thanks Jarren & Luke

    I am in the middle of the road intersections with six directions viz.  1) HANA, 2) Success Factors 3) HR BO  4) HR Mobility 5) HCM on-premise and last 6) project mgmt.

    I don’t know which one to choose for my long term career, ie. next 3 – 5 years. Already I am SAP HR Consultant of  41 years of age. In fact, As I am already a PMP certified and was a project manager,  I had a dilemma to move to project management to settle down. But then, the expert knowledge in the SAP domain will start to erode as I will not be doing hands-on and I will be like another generic project manager which in recession times, the first one to go.

    Therefore, it is a middle-age crisis, which I need to make a decision.

    I am silent observer of both of your blogs. I will wait for Jarren post on Success Factors. But my questions remains the same for others.

    1. What is the role and takeaway for a HR Consultant in HANA, BO or in Mobility – What role will he play. For example, HANA is a in-memory database, what is the major shift for a HR functional consultant. Will HANA certification be useful to a SAP HR person?

    2. Similar question is for SAP BO and Mobility for a SAP HR consultant

    As you are experts, I would like to have your suggestions.

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