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This is an overview of the SuccessFactors variable pay integration with SAP ERP HCM. Please note that a portion of this integration is planned for release in November 2014. A part of this packaged integration requires an SAP EPR HCM support pack that is planned for release in January 2015.

1.1 What is SuccessFactors Variable Pay?

SuccessFactors Variable Pay is a software module in the SuccessFactors HCM suite. It calculates employee bonuses based on quantitative performance of the business and individual employee performance in a given period.

1.2 What is the business need?

The SuccessFactors variable pay module requires employee history information to determine bonus eligibility and calculate variable pay amounts. Once variable pay is calculated in SuccessFactors variable pay module, that information needs to be sent to SAP Payroll on-premise for bonus payouts. Today, these steps are performed manually by compensation experts and payroll administrators. Such a manual process is labor intensive, error prone and puts sensitive compensation data at risk.  Customers either adopt such an inefficient, error prone and risky manual process or build a customer integration that costs a significant amount of time, money and expertise to build and maintain. The packaged integration for variable pay aims to provide a best practice integration that is built and maintainted by SAP. The packaged integration aims to significantly reduce the manual labor, errors, time and risk associated with the variable pay process.

1.3 Purpose of this document

This document is meant to enable a conversation about SuccessFactors Variable Pay integration with SAP ERP HCM and Payroll. After reading this document, SAP solution architects and cloud architects should be able to explain the integration to customers and help them make appropriate business process decisions. This document also outlines known assumptions and design boundaries of the packaged integration. This document is not an implementation guide. However, implementation teams will get a conceptual understanding of the packaged integration, the value it brings and the boundaries of the design.

Document authors and subject matter experts

This document was written by Prashanth Padmanabhan, the SAP SuccessFactors Integration solution manager and Ganesh Kudva, the engineering product owner for the integrations discussed in this document. It is written based on the technical specification for variable pay written by Scilly Wang and Ganesh Kudva.

These are the subject matter experts for this integration. The product manager responsible for the integrations discussed in this document is Yamini Polisetty. Yannick Peterschmidt  is the solution manager responsible for SuccessFactors Compensation and Variable Pay. Anup Yanamandra is the SuccessFactors Compensation and Variable Pay product manager, and is a subject matter expert.

1.4 Pre-requisites and Assumptions
The packaged integration makes some assumptions about the customer’s landscape and business requirements. This section talks about those assumptions and pre-requisites. This packaged integration is meant for customers who run SuccessFactors Talent Solutions, particularly Variable Pay module, along with SAP ERP HCM and SAP Payroll on-premise. Before implementing the packaged integration for variable pay, customers should have implemented the packaged integration for employee master data.

2. SuccessFactors Variable Pay integration with SAP ERP HCM

SuccessFactors Variable Pay module is normally sold as a bundle along with the SuccessFactors Compensation module. Both Compensation and Variable Pay modules require employee master data as input to enable compensation planning processes and perform all bonus calculation processes. A packaged Integration between SAP HCM and Compensation already is avaiable today. A snapshot of current employee master data is sufficient for compensation process. However, Variable Pay requires more information that just employee master data. Variable Pay module requires historical Employee data to make bonus calculations. This historical employee data integration is part of the variable pay integration.

2.1 How does the integration work?

In the figure below, you will see the integration process from a business process perspective. SuccessFactors variable pay process starts with import of historical employee data from SAP HCM system. Employee history data is needed as inputs for the bonus calculations and planning process. The standard integration processes employee master data and prepares it as required by SuccessFactors Variable Pay before transmission. At the end of the variable pay process, bonus allocations are exported from SuccessFactors back to SAP HCM system for Payroll purposes.

Variable Pay Integration Overview.png

2.2 Data Preparation and Flow from SAP to SuccessFactors

Transfer of data from SAP to SuccessFactors Variable Pay

SuccessFactors Variable Pay expects selected employee records that are eligible for a variable pay planning cycle. The packaged integration provides functions and features on SAP HCM side to select eligible employees so that only the correct records will be loaded into the Variable Pay system. The eligible employees are selected in two steps.

variable pay sap to successfactors data flow.png

First step is a selection based on employee attributes. For example, customers may want to select all employees who belong to a specific department  for export into a specific Variable Pay program. Once the first selection is done, there may be some special rules that can make an employee ineligible. This needs to be handled with special filtering logic. These business rules usually vary from customer to customer.  The packaged integration enables customers to modify the business logic to suite their variable pay eligibility requirements.

Example of special rules for employee variable pay eligilbility

1. Customers may want  to select salaried employees from select divisions
in the company. In such cases, only the salaried employees from selected divisions are included in the Employee History.

2. Customer wants to exclude employees who are terminated and not active on end date of Variable Pay program. In this case, terminated employees who are not active on end date are not included in the employee history.

3. Customer wants to include terminated but were employed partially during the program period. In this case, employees who were terminated in the period of Pay program are included in the employee history.

4. Customer wants to include terminated employees who are marked for “Re-hire”. In this case, employees who are terminated during the period and marked for Re-hire must be included in the employee history.

5. There is an employee who resigned mid of the year and is re-hired again within the Variable Pay period. The Employee must be included in the history file, but only the 2nd split must appear. The old split is not valid anymore, despite sharing the same employee number.

2.3 Data flow from SuccessFactors Variable Play to SAP ERP HCM

variable pay successfactors to sap data flow.png

2.4 Prerequisites

The packaged master data integration between SAP ERP HCM and SuccessFactors Talent Suite should be in place.

2.5 Known assumptions and design boundaries

1. The packaged integration for employee master data between SuccessFactors Talent Solutions and HCM should be in place before this integration can be implemented.

2. During recurring update of Employee History data in VarPay staging area, it is possible that some of the data records in Staging area need deletion and replaced with new reocrds (for example, delimition that changes the key of data records). This is rare, but still possible. In such cases, its necessary that VarPay administrators trigger a update of calculated information on all the VarPay forms. It is assumed  that VarPay administrators take care of this by setting up a recurring batch job to update the calculated information. This job needs to be setup in SuccessFactors Provisioning.

3. This packaged integration assumes that the customer does  not use SAP ERP HCM on-premise Compensation Management. This packaged integration does not and will not rely on functions and features of SAP ERP HCM Compensation Management on-premise.

4. This packaged integration assumes  that the effective date for VarPay is determined via user input since the date information does not exist in SFSF VarPay result.

5. For employees with splits or different assignments in employee history,  Variable Pay can aggregate the bonus amount for different assignments into one final payout amount and converted the currencies into one functional currency. This packaged integration assumes that such payout aggregation and currency conversion are done on the SuccessFactors side and appeared as Variable Pay result. They are mapped directly and transferred to SAP HCM payroll.  However, customer can implement differently in they wish to do so.

6. This packaged integration assumes that Variable Pay result via AdHoc report is always based on completed Variable Pay process.

7. This packaged integration assumes that there will be no changes made to variable pay data on the SAP HCM side after transfer from SuccessFactors. All data change has to be adjusted and generated on the SuccessFactors.

3. Integration Technology

SAP Process Integration (PI) on-premise integration middleware technology is supported. SAP HANA Cloud Integration (HCI) support is planned for release in the first quarter of 2015.

4. Implementation and Enablement Resources

4.1 Administration Guide
The detailed administration guide will be available in Service Market Place at service.sap.com and will be linked from help.sap.com/cloud4hr

4.2 Rapid Knowledge Transfer
A rapid knowledge transfer session will be conducted by product managers to enable implementers. A recording of the session will be made available in service market place.

4.3 Help Portal
Help.sap.com/cloud4hr will be updated with the appropriate help documentation.

4.4 Rapid Deployment Solutions
There are no Rapid Deployment solutions covering these packaged integrations as of November 2014.

6. Summary

SuccessFactors Variable Pay is a software module in the SuccessFactors HCM suite. It calculates employee bonuses based on quantitative performance of the business and individual employee performance in a given period.

The SuccessFactors variable pay module requires employee history information to determine bonus eligibility and calculate variable pay amounts. Once variable pay is calculated in SuccessFactors variable pay module, that information needs to be sent to SAP Payroll on-premise for bonus payouts.

There is a packaged integration to connect  SuccessFactors Variable Pay with SAP ERP HCM and Payroll on-premise. As part of the packaged integration SAP ERP HCM sends employee history data to SuccessFactors Variable Pay module. The SuccessFactors Variable Pay module calculates the variable pay and sends the data back to SAP ERP HCM and Payroll on-premise.

SAP NetWeaver PI is the integration technology used by the packaged integration. This packaged integration is meant for customers who use the Talent Hybrid deployment model. The packaged integration for employee master data is a pre-requisite for this integration.

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