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In my previous posts I talked about declustering and the benefits for HCM on SAP HANA. In this post I will explain how we leverage this declustering functionality in our latest innovation: the SAP Payroll control center add-on. This will be the first wave of UX and process innovation for payroll. This blog talks about the second wave: The new SAP HCM Payroll experience  (HR Renewal 2.0 FP1). Now back to the first wave:

A bit of background

It is undisputed that SAP offers the best and broadest payroll functionality in the market. The solution is used by ~7600 customers and the largest BPO providers of all sizes and in all industries all over the globe. SAP Globalization Services and SAP Partners are offering a localized payroll in 53 countries that can be run from a single instance.

Currently for these customers the end-to-end payroll processing time is many days in which most time is spend on analyzing payroll master data that goes into the payroll and reconciliation activities that take place after the payroll has run. The data is scattered over different (wage-type) reports. Many of these reports run over-night in batch processes which increases the end-to-end payroll cycle time.

The new SAP Payroll control center add-on provides a fundamentally new approach in which potential issues are pointed out in real-time by the application rather than payroll administrators digging through information and trying to find issues themselves. With this functionality payroll administrators only need to focus on issue solving and this saves payroll departments a lot of valuable time.

How does it work?

During the preparation of the payroll there are a lot of validations on master data executed by payroll administrators. They make sure that information like tax info, missing address info or any other payroll relevant information is valid or corrected before the payroll runs.

And after the payroll has run these payroll administrators make sure the results are correct before the actual pay-out. That means that they run analyses like:

  • Gross variance deviation of 10%: this identifies employees with a 10% or more deviation in their current salary compared to their last salary;
  • Zero Net: this identifies active, inactive and withdrawn employees who will receive “zero net” pay out;
  • Excess Net: this identifies employees with a net pay over a specified tolerance;
  • And many many more.

Currently there are a lot of different reports created for these analyses. These can now be converted in so called ‘validation rules’ that run in the SAP Payroll Control Center. Via these validation rules potential issues will be pointed out by the application. The validation rules ‘framework’ can encapsulate almost any type of master data and reconciliation analysis that is required.

How does it look like?

When a payroll administrator logs on to the application there will be an overview all payroll areas he or she works for. the image below shows a payroll area overview and below the payroll areas there are 5 tiles that all have a unique process purpose. In the example below there are process tiles for master data quality, pre-payroll validation rules, errors from the payroll run, payroll validation, and post processing.

Pic 1.png

When a payroll administrator clicks on a tile there is a structure with different groups (folders) to which the validation rules can be linked. In the example below there are master data validation rules linked to the selected Data consistency group that run as part of the Master data quality process step (from the first image).
pic 2.png

The payroll administered can branch through the groups to see which validation rules are pointing out potential issues. In the following image you can see how the group ‘Master data change’ contains validation rules that track missing hiring information, or missing data from employees that left. The validation rules framework can encapsulate any type of master data check that is required.

pic 3.png

What is so unique?

What is fundamentally different to this application is that all potential errors will be pointed out by the SAP Payroll Control Center rather than payroll administrators digging through loads of individual reports. This is really a big ‘time saver’

The following images will explain how. In this payroll validation example the payroll has run and there are 12 potential issues pointed out by the business rule that Identifies employees with a 10% or more deviation in their current salary compared to their last salary.

pic 4.png

When the payroll administrator clicks on the gross variance rule this opens up the following screen:

pic 5.png

On the left side of the screen there are 12 employees with potential employees pointed out. The right side of the screen shows an overview of the employee and the variance for this employee. Robert is about to receive 16,61% more salary compared to the last cycle. This comes down to €669,50.
When the payroll administrator clicks on the Details button the following is displayed:

pic 6.png

This immediately shows the reasoning why Robert will receive more payment. He had 17,36 hours overtime and he received a project bonus. This already saves the payroll administrator lots of time.

The payroll administrator can pull up a brief card that provides more info on the employee:

pic 7.png

This card can for example contain information on Robert’s eligibility to work overtime. After evaluating the payroll administrator can rate Robert’s case as correct, or the payroll administrator can reach out to the manager for the necessary corrections. The status functionality at the bottom can be used to set Robert to green and to make sure Robert does not show up on this list anymore for this scenario. These status change actions are logged and auditable in the back-end system.

pic 8.png 
The beauty of the application is that the potential issues brought up by the validation rule can be different for each case. In the mock up below Corinna (number 2 in the list) is shown with other wage types that cause the issue:

pic 9.png
In the customizing of the application the different tiles, group folders, validation rules, header information & status reasons per business rule can be set up. The validation rules require a bit of programming to make sure the application provides the results that are required. This makes the solution highly flexible and ensures it can handle all analyses that are required from pre-payroll to the post-payroll process.

How does it all fit together?

The SAP Payroll Control Center is developed in the latest HTML5 technology and will be delivered as part of HR Renewal 2.0 (http://help.sap.com/hr_renewal). Payroll Administrators can launch the SAP Payroll Control Center via a small lane in the HR Renewal screen. Customers that do not have HR Renewal implemented can embed a link in their portal or SAP ECC HCM system.

The SAP Payroll Control Center points out which master data and other corrections need to be made before the payroll can run. These master data corrections can be made in HR Renewal applications or in SAP ECC HCM. Then the payroll can run and when the program is ready the SAP Payroll Control Center points out the potential issues that need to be evaluated and possibly corrected. This can again be done via HR Renewal or the SAP ECC HCM application.

The following graph displays the screens:

pic 10.png

What are the technical prerequisites?

Customers can start using the SAP Payroll Control Center when they have SAP ECC HCM on Enhancement Package 7 and they have their SAP NetWeaver on the 7.4 release. The payroll data on which the validation rules are running is stored in the declustered tables. Therefore the declustering Business function must be switched on (HCM_LOC_CI_50).

In addition, SAP recommends the usage of SAP HANA due to the performance improvement and the ability to build complex validation rules. SAP Payroll Control Center also runs on non-HANA databases, however when data is declustered on a non-HANA database this results in factor 2-5 times larger  data size. That is challenging on traditional databases and this also results in a situation in which it’s not possible to create validation rules with the complexity that most customers require.

SAP HANA can be used in 2 deployment options, which our outlined in the following graph:

pic 11.png

In the case of a side-by-side scenario the SAP Control Center leverages (master) data coming from the SAP ECC HCM system plus data from the declustered tables on SAP HANA. In the configuration of the validation rules there is a special field in the configuration table in which it can be specified on which system to run them.

How can you start?

This is a step-by-step guide on how to install the SAP Payroll control center add-on:

1. Download the software (HR renewal 2.0). Import the transports; check that there were no critical import errors on the transports.

2. Check that the following packages are installed in the abap application sever:

  • PAOC_PAY_PYD
  • PCPYD
  • PCDCT
  • PCTRRES

3. Activate the following business functions:

  • HCM_LOC_CI_62 – Payroll Data Source Framework
  • HCM_LOC_CI_63 – authorization framework

4. Set up the gateway server. To install and set up the gateway server on your system landscape (if not already done), please refer to the following SAP Gateway guides: http://help.sap.com/saphelp_gateway20sp05/helpdata/en/82/4ad13ee9dd4d4a88e1ef8712e33aee/content.htm

In the SAP NetWeaver Gateway system, you activate the required OData services in Customizing for > SAP NetWeaver Gateway > oData Channel > Administration > General Settings > Activate and Maintain Services.

  • Application: Payroll Control Center
  • Technical Name of Application: HRPY_COCKPIT
  • OData Service (Maintain in SAP NetWeaver Gateway system): Payroll Control Center  PYD_FRW_SRV; PYD_CONT_SRV

5. Set up the SAP UI5 service: Go to the SICF transaction and activate the payroll control conter add-on (cockpit) UI5 services.

Configure ICF (Internet Communication Framework) nodes for the Payroll Cockpit as follows:

  • In your SAP ABAP back-end system, access the Maintain Services (SICF) transaction and choose Execute > The Maintain Service screen appears > Choose default_host – SAP – bc – bsp – SAP, select the following services:
    • HRPY_COCKPIT
    • HRPY_COCKPIT_XX
  • Activate the above services (either via right-click of the mouse and Activate Service or in the menu under Service/Host -> Activate).
  • Choose default_host – SAP – bc – ui5_ui5 – SAP, select the following services:
    • HRPY_COCKPIT
    • HRPY_COCKPIT_XX
  • Activate the above services (either via right-click of the mouse and Activate Service or in the menu under Service/Host -> Activate). More information about transaction SICF can be found here: http://help.sap.com/saphelp_nw70ehp1/helpdata/en/46/d28dfa34bb12bee10000000a1553f7/content.htm

In order to develop content in the SAP Payroll control center add-on framework SAP delivered a note with important information on how to develop it. For more information please check Note 1995698 “Validation rules for Payroll control center – Setup and example”. In addition, SAP delivered a rapid-deployment solution (RDS) with best practice predefined validation rules for customers that want to accelerate their implementation. This RDS is free of any license charge and can be implemented by SAP Consulting and/or SAP Partners. This blog explains how to best implement it: A best-practice to implement SAP Payroll control center add-on


Is this also available in the cloud?

This functionality is available for Employee Central Payroll customers since the 1411 release. Check this video: SuccessFactors November 2014 Release Highlights – YouTube

Closing comments

For the development of this functionality we have been talking to many of our largest customers with the most complex payrolls. All these customers agreed that this new functionality will meet their (diverse) needs and that it will result in significant time savings. Therefore, the only thing to be aware of is that you have to think in advance what you will with your new free time and without the current stress 😉

For more information on HCM on HANA please check these Fact books: http://www.saphana.com/community/learn/solutions/sap-business-suite-on-hana/fact-book

Looking forward to your feedback. And if you have any questions feel free to contact me.

Frans Smolders
Frans.smolders@sap.com

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32 Comments

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  1. Jarret Pazahanick

    Really excellent article Frans and this is some great new functionality that I believe will be extremely well received by customers. I do have some worries that with EHP7/NW 7.4 as pre-reqs along with HANA (if they want to get full benefits) it will be a slower adoption cycle as many customers will have to make a business case to get to that technology stack.

    It seems like a no brainer to include this in the SuccessFactors Employee Central Payroll offering given that SAP controls and does the hosting and also a great way to showcase it and differentiate that offering. My fingers are crossed that it is on the very near term roadmap for ECP and is there before the EOY.

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  2. James Ibbotson

    Hi Franz this looks a really impressive renewal of core payroll.

    Can i confirm that this will be available on a standard NW 7 EHP7 Platform without SAP HANA, i know its recommended but looking at the information available there shouldn’t be any issues running this on a oracle platform / db.

    Regards

    James

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    1. Frans Smolders Post author

      Hi James,

      Your assumption is correct. However, please take in mind that the data foundation will grow massively when declustering is switched on on a non-HANA database (as I pointed out in my blog). That will probably result in batch jobs for this new innovation and that would really be a shame for this new functionality. I’m sure there is a business case in bringing your landscape to HANA for this.

      best regards,

      Frans 

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  3. Luke Marson

    Hi Frans,

    As usual, great and well-written blog! This functionality looks really good and should appeal to the majority of Payroll administrators. It’s great to see enhancements still coming for SAP ERP Payroll.

    Best regards,

    Luke

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  4. Steve Bogner

    Frans, thanks for sharing that. I saw the initial Payroll-HANA functionality a while ago, and it’s good to see this evolution of it. This is very usable, and a powerful incentive for customers to move towards HANA.

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  5. Christopher Solomon

    Great blog! Cool to see what is coming. I know this is “leading edge”/early adopter crowd kinda stuff, which makes it REALLY exciting for what is coming/added to this as broader adoption happens!

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  6. John Moy

    Hi Frans,

    Thanks for sharing this.  Interesting, looks like customers here are getting the Fiori-like experience with enhancement packages, presumably without having to pay for an additional Fiori license.  That’s what I like to see!

    Although of course being Ehp7 on NetWeaver 7.4, means most customers won’t see this for a while.  But it will help provide a reason to upgrade.

    Interestingly, the only customer I know that is implementing Ehp7 at the moment is also stuck on IE8, so presumably they will need a browser upgrade to take advantage of this.  Or access it from their iPad.

    🙂

    Cheers

    John

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  7. Harris Moideen

    Frans,

    Very innovative and highly welcomed addition.Will this be avaliable for Employee central Payroll customers at the same time as On premise.

    regards

    Harris

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  8. Navneet Barwa

    Hi Frans, Great Solution!  As i heard your presentation today i.e. 6th march, it was communicated that this will come in SPRO in IMG International Payroll without any additional Cost?

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  9. Jean-Michel Savary

    Hello Frans,

    This is a very welcome step.  One question regarding the Master Data validation rules used in the step “Master Data Quality Check”, are these rules potentially usable for the data entry process itself to prevent a data quality issue from being created in the first place?  Is this something SAP is planning for On-Premise solutions or Employee Central?

    Thanks in advance and regards.

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    1. Frans Smolders Post author

      Hi Jean-Michel,

      To my opinion there is already a lot of such ‘error prevention’ built into SAP HR. In the end SAP connot foresee errors from being made. So to monitor potential errors these validation rules can be configured.

      best regards,

      Frans

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  10. Sumitha RD

    Hello Frans,

    How are the validation rules defined? Is it like configuration tables or coding as in Payroll schema’s/PCR?

    Thanks

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    1. Frans Smolders Post author

      It is a combination of customizing and simple select statements in ABAP. That provides the flexibility to create highly advanced validation rules. In addition, we are planning an RDS for Q3 to provide best-practice validation rules.

      best regards,

      Frans

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  11. Frans Smolders Post author

    Hi all,

    I just added this text to my blog:

    SAP delivered a note with important information on how to develop your own content in the delivered framework. For more information please check Note 1995698 “Validation rules for Payroll control center – Setup and example”.

    In addition, SAP is planing a rapid-deployment solution (RDS) with best practice predefined validation rules for customers that want to accelerate their implementation. This RDS is free of any license charge and can be implemented by SAP Consulting and/or SAP Partners.

    Happy to hear your feedback,

    Frans

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    1. Navneet Barwa

      Hi Frank,

      I guess you forgot “1” in front of the note number. The correct note is Note Number 1995698 “Validation rules for Payroll control center – Setup and example”.

      Regards,

      Navneet.

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  12. Abdullah Alhussaini

    Really it’s great thing, sometimes I call it HR renewal Revolution. thank you Frans Smolders  for your gorgeous article. personally I got a lot of knowledge from this article. However, I think there is problem for the big customers they could face it and it’s not solve with this innovation, the problem is How much time the payroll administrator spent during checking the validation rules, especially if you talked about the big organization such as 5000 employees?

    I think the payroll administrator will take more time during the checking errors of validations. Am I right?

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    1. Frans Smolders Post author

      Thanks Adbullah,

      The whole point for developing this functionality was to speed up life of the administrator. This version and the following versions are aiming to make the life of the payroll staff easier. We expect end-to-end cycle time improvements of ~20%

      cheers,

      Frans

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  13. Jwala ESS MSS

    This makes HR USERS to reduce and search for missing entries at the time of payroll and time evaluation …..this is excellent really …liked it

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  14. Kenneth Moore

    The future looks bright (finally) for HR and payroll.  I just wish SAP was not strong-arming customers onto the cloud.  This will slow adoption due to many customers desire to remain on-premise.

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  15. Kaushik v

    Hi Frans,

    How does this validation rule, for example as mentioned in Note 1995698 get triggered from the Payroll process manager “Prepare Verification” step and get submitted as a worklist to the Payroll administrator.

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  16. Edgar Valverde

    I am currently implementing PCC for a company in Mexico, the entire process is working ok for me, but I have problem running the policies, check the configuration is correct, Someone can help me with any comments or hint for check this problem, the error in the instance of PCC is “not execute instance found” “Stop Execution” 

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