In my very first project for SAP HCM, there was a lot of backlash from end users who were comfortable with their legacy system and did not want to change. Yes we had a whole change management staff working that end and yes the project sponsors as well as the business owners were on board with the project. But every so often when the case of how to satisfy reporting requirements came up, the answers were not entirely convincing. Yes there are ad-hoc capabilities and yes maybe they could have hired a BI person to come and crank those out but to most public sector clients who are working with the tightest budgets this is not practical solution for them. If there was a way to provide standardized out of the box reports, which met federal and even state requirement, the whole project would have been a lot smoother.
There are also some challenges in this area as well that must not go unmentioned; for example, some federal reports practically require that they must be completed on paper. Baffling, yes I know in the age of technology, there are laws that require the production of reports in paper format. The Office of Personnel Management, the federal agency tasked with standardizing HR across the federal government has a proposed rule in place that if adopted can move some of these requirements into the 21st century. See details in here https://www.federalregister.gov/articles/2014/10/10/2014-23295/human-resources-management-reporting-requirements
However, there is still a great deal of reports that can be produced electronically like EEO Reports, OSHA, ACA, just to name a few. Also with SAP SuccessFactors foray into the federal arena, understanding and providing federally compliant reports out of the box can be a huge boost for implementation and adoption by most state governments. Not to mention, private organizations will benefit as well because they have to comply with the same federal reporting requirements. Purely from a functional standpoint, I think this is an area where SAP can definitely do better and also help with their acceptance into the public sector.