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SAP Business ByDesign and Payroll

With the 1811 release of Business ByDesign, in the Payroll Processing Work Center, a new Reports work center view has been introduced – in future, this view would contain all the reports that would be relevant for an administrator to consolidate from a payroll perspective, and send to the payroll provider system.

As product manager for HCM in Business ByDesign, I would like to share with you the rationale behind introducing this work center view, and what is the current outlook for the payroll processing functionality.

Since the beginning of 2018, I was part of a study where we tried to understand how existing ByDesign customers integrate with their payroll providers, and what their needs are. As part of this study, we conducted a series of interviews with both customers and partners in America, Europe and Australia.

We found that for transactional data like expense reports and time sheet time recordings which are relevant for an employee’s payroll, administrators were using ByDesign’s analytical reports to review and download the data. They would modify this downloaded data to a format which was acceptable for upload to their payroll provider – many times using an excel macro provided by the customer’s implementation partner. Employee master data was typically manually maintained across both systems, either by the administrators themselves, or by the customer’s payroll consultant.

We understood that we need to provide a simpler and standard way for administrators to review and transfer data to their payroll provider systems.

Way forward for payroll provider integration

Based on the product roadmap and strategy, SAP ByDesign plans to continue to rely on payroll providers to calculate an employee’s payslip. It will not incorporate an own payroll engine, at least not in the foreseeable future.

We believe that leveraging the analytics framework – that many of our customers are already doing – would be the right approach to make things easier for customers to transfer data to their payroll providers.

In the upcoming releases, we would like to enhance the HCM analytical reports to make it easier for administrators to review both transactional as well as master data that is relevant to be sent to a payroll system, or a payroll consultant. Administrators can download the data using the existing analytical report framework capabilities. We would also try to deliver an excel based payroll workbook – which would be a consolidated set of reports for all employees for the administrator – with one report per worksheet in that workbook. This workbook would have one worksheet per report – it’s likely to have worksheets for time recording, time account balances, compensation and employee master data.

If customers want a service based integration with the payroll provider, the partner can build ODATA services on these reports. My colleague Knut Heusermann has written a very good blog post on the same :

What about existing ByDesign HCM Payroll functionality ?

The integration mechanism stated above would allow payroll provider systems to specify the period for which data has be extracted or reviewed from ByDesign. This would make the maintenance of payroll periods and associated functionality redundant in the ByDesign system.

As a consequence, in the coming releases, we would consider the deprecation of the existing payroll functionality like payroll periods, snapshot generation, xml data file creation, customers would be advised to use the delivered reports only.

Customers will still be able to maintain compensation data in the ByDesign system, as long as the employee is hired to a supported country (from the ByDesign payroll  perspective).

Regarding Payroll relevant legal information like Tax and Social insurance – Payroll provider systems would be up to date with regards to the payroll specific legal information for employees. Customers are encouraged to maintain this data in the payroll provider system directly. In our current outlook, SAP ByDesign would not be making enhancements to the existing payroll master data that is captured currently in the system.

Integration with specific payroll providers

While in North America, ADP and Ceridian appear to be the dominant payroll provider systems, in Europe, the marketplace appears more fragmented, with every country having a few key payroll providers. Certain partners have already used the existing services to provide out-of-the-box integration with specific payroll providers. With our current outlook, this is a direction that we would like to pursue – to encourage our partners to build out-of-the-box integration to payroll providers commonly used by their customers.


My recommendation to customers and partners is to use ByDesign analytics reports to review, collect and transfer data to the payroll provider. In the coming releases, we aim to enhance existing reports, and provide new ones to facilitate this, following which we would look at deprecating the existing payroll file extract, snapshot generation, payroll period maintenance.

It would be great to hear your feedback. If you would like to have a chat regarding the approach, or have requirements on the kinds of reports that would be helpful for you to connect with a payroll provider, do put in a comment and I will be happy to schedule a call.

Thanks a lot for reading !


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