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Author's profile photo Mary Sidlauskas

SAP Payroll Deployment Options

SAP Payroll Deployment Options

What’s Right for Your Company?

I am frequently asked why SAP offers so many payroll deployment options. There is a lot of misinformation regarding these offerings and a general lack of understanding as to why we created them, so I figured it would be an appropriate time to write a short blog to explain the whys, whats and for whoms

Let’s start with an obvious albeit often overlooked premise: when it comes to payroll, one size does not fit all. SAP has 15,000+ HCM customers, 9,000 payroll customers; each customer has different requirements and strategies for their future. We believe a payroll solution is never about the vendor. The needs of our customer base are highly diverse with distinct payroll use-cases. Simply offering one payroll solution and expecting our amazing customers to conform is not only unrealistic, it’s wrong. The SAP SuccessFactors payroll delivery options are in place to address and meet the needs of each customer’s unique objectives.

The whys, whats, and for whoms of SAP SuccessFactors Payroll Offerings

The Partner managed cloud for SAP SuccessFactors solutions, SAP SuccessFactors solution for managed payroll and the SAP HCM on-premise for S/4HANA deployment options were all created based on requests from our customers.



SAP SuccessFactors Employee Central Payroll is available exclusively to customers using the SAP SuccessFactors Employee Central solution. With SAP SuccessFactors solutions, you can solve your unique HR needs by tapping into a breadth and depth of global HR solutions spanning core HR, talent management, and analytics. Addressing both the strategic and operational aspects of HR, our cross-suite solution helps you find the right talent, develop future leaders, and engage all employees with automated, transparent, end-to-end processes and tools. SAP SuccessFactors Employee Central Payroll is fully integrated with the SAP SuccessFactors HCM suite, offering a fully comprehensive solution to help ensure that employees are accurately paid for their recorded time based on their contractual obligations in their core HR system, thus eliminating double data entry while ensuring accuracy. Our market-leading solutions offer a proven global payroll engine that is seamlessly tied with a leading next-generation core HR system, so you can be assured that your payroll will be safe, fast, and accurate.

Most Suitable Customer Profile:

  • Customer size >2K employees
  • Cloud payroll solution offering
  • Employee Central is a pre-requisite
  • EC Time, Workforce Software or 3rd Party for time requirements
  • EC Benefits, Benefitfocus or 3rd Party for benefit requirements

Partner managed cloud for SAP SuccessFactors solutions is a channel program whereby SAP partners deliver Employee Central (EC) and Employee Central Payroll (ECP) + Talent (Enterprise) to customers in a managed cloud service or Business Process Outsource (BPO) model   The SAP partner establishes a direct contract with the customer. This is a perfect offering for customers that want a single provider and contract for both the SuccessFactors software as well as complementary services (e.g. implementation, support, ongoing management, customer onboarding and training, BPO, etc.). Customers can decide which services and/or processes they would like to have the partner to be responsible for.

Most Suitable Customer Profile:

  • Require a high-level of service
    • Implementation
    • Full Application Management Services, including legal change management.
    • Payroll Processing
    • Tax Deposits and Filings
    • Support
    • Administrative Services
    • Time and Attendance and/or Benefit Services

SAP SuccessFactors solution for managed payroll is a subscription offering for customers who have existing on-premise SAP Payroll deployments and are not interested in migrating payroll, time and benefits, but want to move to a cloud solution. SAP SuccessFactors solution for managed payroll provides a new subscription payroll license with hosting and application management services on a SAP contract. This allows customers to move their on-premise SAP Payroll solutions, including other components like SAP Time Management and SAP Benefits to the Cloud along with Employee Central.

This option enables customers who want to migrate their HR and Payroll systems to the Cloud to reap the benefits of moving to a cloud delivery and subscription model and get the most out of the cloud innovations that SAP offers. These benefits include more flexibility in licensing costs as business changes, moving from capital to operating expenses, less infrastructure to manage internally, etc.   However, many SAP HCM customers have customized on-premise SAP Payroll & Time Management working well and for these customers Employee Central Payroll is not an appropriate option. Therefore, these customers either need to maintain their on-premise SAP Payroll and integrate it to EC or separately hire a partner to host it for them. The managed payroll offering allows SAP on premise Payroll customers to move to a subscription-based model and have their SAP Payroll hosted and supported in the cloud.

Most Suitable Customer Profile:

  • Existing on-premise HR and payroll customer
  • Planning to deploy EC and seeking a non-disruptive solution for SAP Payroll & Time
  • Complex Time Management and Benefit requirements
  • Existing system modifications

SAP HCM for S/4HANA, on-premise is planned to be available in 2023 and will be based on the existing ERP HCM solution specifically for S/4HANA. This offering is fully integrated with SAP S/4HANA and can be deployed as a “sidecar” on a separate instance.

This solution is targeted to the SAP installed base desiring to keep SAP ERP HCM / SAP S/4HANA deployed in an on-premise environment. We see it as a bridge for customers who are not ready to fully move to the SuccessFactors cloud in the mid-term (2025-2030). This offering is only available for on-premise deployment and will be designed to offer customers a comparable functional scope as the S/4HANA Compatibility Pack including all enhancements shipped until the new solution is available (see corresponding SAP Note). This on-premise offering will have the same country coverage, including key components of SAP ERP HCM like Personnel Administration, Organization Management, Personnel Development, Payroll, Time & Attendance, and Benefits. SAP Learning Solution (LSO), SAP e-Recruiting, and Travel Management (FITV) are excluded; those shall be replaced by SuccessFactors Learning, Recruiting and Concur.

SAP HCM for S/4HANA, on-premise will be based on the existing SAP ERP HCM codeline, but it will be available on SAP HANA database only, which means it will not support anyDB. The offering will be modernized and optimized to comprehensively leverage SAP HANA capabilities following the S/4HANA methodology. (Note: This is not to be misunderstood as native HCM within S/4HANA. Instead, this offering is an independent solution run side-by-side with S/4HANA). The maintenance strategy for SAP HCM for S/4 HANA, on-premise is independent from SAP Business Suite 7.0 (and SAP ERP HCM), and SAP S/4HANA.

Most Suitable Customer Profile:

  • Existing on-premise payroll customer
  • Not yet ready to move to the Cloud, but want an offering that extends support until at least 2030

Wrap Up

As you can see these deployment options are unique and designed to meet the needs our diverse HR and payroll customers. Hopefully this helped to provide you with some clarity around the available deployment options and which one may be appropriate to your organization. Please reach out to your Account Executive or Customer Engagement Executive to discuss which option is best for your organizations requirements and strategy.


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      Author's profile photo J. Pazahanick
      J. Pazahanick

      Nice job with this Mary and I will throw in some insight from doing SAP Payroll and SF Employee Central Payroll implementation over the last 20 years that I think will help customers.

      1- SAP/SF Managed Payroll is NOT a very good option for 99.9% of SAP Payroll customers and have provide feedback in this Q&A here as to why not + talked with almost 50 customers as well

      On a side, since the product has been release for almost two year can you provide a number of how many clients are currently LIVE with this offering.

      2- I would highly recommend that any existing SAP Payroll customers do NOT move to SuccessFactors Employee Central Payroll (which is mostly SAP Payroll Hosted in SAP Data Center).  I have done multiple strategic assessment for large companies and there is no business case for doing so and only a handful have worldwide (got very poor advice).  Save those $ for number 3.

      3- There are many rumors in the marketplace that SAP/SF is building a next generation payroll

      as well as Rob Enslin (Board Member and runs all of SAP Cloud Offerings) has hinted to it hear as well.

      which means that existing SAP Payroll should stay put for the time being and wait for an announcement before deciding on their future roadmap.




      Author's profile photo Mary Sidlauskas
      Mary Sidlauskas
      Blog Post Author

      Wow Jarret, you are Johnny on the spot this fine Friday afternoon. ? To be honest with you, I do not disagree with you regarding the managed payroll solution not being the right fit for all customers and that is exactly why I wrote this Blog, there is no one solution that is correct for all customers. It is imperative that everyone in the SAP SuccessFactors community understands the different deployment options and works closely with their customer/prospect to determine the option that is best for their specific requirements and payroll strategy. As I always say, payroll is not a one size fits all solution.

      I too have spoken with many customers regarding the managed payroll solution.  The interesting thing that people over look is that we have on-premise customers who have been processing under this model for many years. Though they are not processing under the SAP SuccessFactors license of managed payroll, they have out sourced their on-premise environment to a partner, like IBM, and are paying the partner for Application Managed Services (AMS), it’s the exact same model as the managed payroll solution just not written on SAP paper.  I’ve also spoken with customers who were at first interested in managed payroll, but after detailed conversations we all agreed that a different deployment option was in their best interest.  The most important thing is that we spend time with the customer, understand their requirements and HR/payroll strategy, and present the best solution for that specific customer.  To outright say that a specific option is not good for a customer, without thoroughly discussing it with them, is a disservice to our customers.

      Regarding the rumors around a new payroll announcement, though I am aware of different things our executives have said in the past, I am unaware of any announcement coming out of SuccessConnect on this subject.  Last week at ASUG, and next week at SC Berlin, we will be talking about the future of ECP and how we can incorporate new technologies and innovations of the Intelligent Enterprise into ECP. With the SAP Intelligent Enterprise Suite, we can now tap into innovative technologies like machine learning and chatbots, streamlining and simplifying payroll. Imagine chat bots giving context to employee’s pay statements. Or machine learning supporting HR to identify patterns of potential fraud. Creating new processes to automate legal compliance. Lots of possibilities with the emerging technologies which will lead to new innovations in payroll. ECP is the most robust global payroll solution on the market and will continue to be our payroll solution for the foreseeable future.


      Author's profile photo Jelena Perfiljeva
      Jelena Perfiljeva

      Just FYI - Jarret Pazahanick might not see this comment as it was posted not as a "reply" to his comment. SCN is very particular about how we have to post our replies these days or "no notification for you", sadly.

      That aside, I also want to join Jarret in complimenting this blog. I'm not an expert on payroll but it seems well written, informative, and easy to consume. More than anything, it's sincere and personal which is, sadly, rare among the SAP employee blogs.

      Well done!

      Author's profile photo Mary Sidlauskas
      Mary Sidlauskas
      Blog Post Author

      Thank you...MS

      Author's profile photo J. Pazahanick
      J. Pazahanick


      Thanks for chiming in Mary Sidlauskas and pretty obvious that payroll runs through both our veins 🙂

      Just to be clear on Managed Payroll I did say it might be a fit for .1% above 🙂 and curious how many LIVE SF Managed Payroll customers there are out of the 9K number mentioned in your blog and appreciate the honesty in "I’ve also spoken with customers who were at first interested in managed payroll, but after detailed conversations we all agreed that a different deployment option was in their best interest" as that is the same as I have experienced as well.

      I would hope all the great new functionality you mentioned in the roadmap for ECP is also being considered (where technically feasible) for your 7-8K loyal maintenance paying SAP OnPremise Payroll customers as many are feeling forgotten (and the recent co-innovation program offering have upset many large customers).

      One last item for clarity is what is the current date EC Payroll will be supported given its foundation is SAP Payroll which is 2025 (and potentially 2030 with sidecar) as dont remember seeing that explicitly mentioned (may have missed)

      Author's profile photo Mary Sidlauskas
      Mary Sidlauskas
      Blog Post Author

      There is no end of standard maintenance date for ECP. Though SAP HCM on-premise payroll is the foundation for ECP, ECP is a separate product with its own development cycle and roadmap. Employee Central Payroll is and will continue to be our Cloud payroll solution for the foreseeable future.

      Regarding our on-premise HR and payroll customers, there was a session at ASUG that discussed our on-premise roadmap and future innovations. I also believe there are plans to have the same session at SC Las Vegas.

      Author's profile photo Vinay Potdar
      Vinay Potdar

      Nice blog Mary.

      Author's profile photo Steve Bogner
      Steve Bogner

      Nice blog Mary - thanks for summarizing the current options. I know there is a fair amount of confusion in the marketplace about all this, and your blog is a good clarification for it all.

      I think ECP is a fine option for customers moving to EC who want to get rid of the rest of their on-premise system, and it offers some nice added functionality too. Not the right option for everyone, but a nice option to have.

      I'm looking forward to the official announcement, some day, of the 'new payroll' that is fully cloud, multi-tenant and modern. Everyone knows it's coming, just a question of 'when'.


      Author's profile photo Danielle Larocca
      Danielle Larocca

      I just would like to reiterate what the attendees said in the SAPPHIRE session.  Great job by Mary in being plainspoken, direct and sympathetic to the audience.  Its been a confusing few years for SAP Payroll customers and her candor was appreciated.

      Author's profile photo Jonathan Ward
      Jonathan Ward

      Hi Mary,

      Can you outline what the current position is regarding on-premise HCM and S/4? If a customer re-implements from ERP to S/4 can HCM functions (e.g. Payroll) also be re-implemented on S/4 via Compatibility Pack support or would the HCM functions have to remain on an ERP-based system and be integrated with S/4 for Finance postings?