SAP has recently announced some changes to our 2018 announcement (here) of SAP Human Capital Management for SAP S/4HANA, on-premise edition (SAP HCM for SAP S/4HANA) where we committed to mainstream maintenance support for our SAP ERP HCM customers beyond 2025. Both changes are the result of working with customers extensively and taking their feedback.

However, our overall strategy for HR solutions remains unchanged. Our investment strategy follows the market demand, with the majority of the planned innovations for our portfolio focussing on SAP SuccessFactors solutions as our go-forward offering.

The 2018 announcement indicated a planned delivery date of the solution in early 2023 with a commercial requirement to carve out to run HCM in a separate instance, connected with  SAP S/4HANA. Over the last 18 month my colleagues and I had numerous conversations with SAP ERP HCM customers and often got the feedback that this carve out would be a larger project than we initially anticipated, and would increase their costs.

What changed?

We took this feedback and discussed several options to serve the needs of our customers. This has resulted in a decision to allow customers to technically co-deploy (SAP HCM for SAP S/4HANA) in an SAP S/4HANA environment (single instance). This will allow customers to move to the new solution in an upgrade-like conversion. We are convinced that this will reduce time and effort for all customers who wish to keep their HCM implementations on-premise and/or not able to transition to our SAP SuccessFactors solutions entirely. Additionally, in order to provide customers with more time to do the conversion, we also plan to make SAP HCM for SAP S/4HANA available sooner, in third quarter 2022.

About the solution

Let me also give you some insights into our plans for SAP HCM for SAP S/4HANA on-premise.  As previously communicated, the solution scope matches the SAP S/4HANA compatibility pack and the key functionality of SAP ERP HCM (EhP 8) except SAP e-Recruiting.  There are no changes to our overall investment strategy.  SAP SuccessFactors remains the primary focus of our HCM innovation at SAP and we have no plans for major additional functional additions or re-architectures in SAP HCM for SAP S/4HANA. So, for example,  RPTime will stay and the Infotypes will still be around. Please see a detailed view below. The solution will be successively optimized for operation with SAP S/4HANA.

In multiple customer meetings I get questions about a comparison between SAP ERP HCM and SAP SuccessFactors. My colleague Imran Sajid recently wrote a great blog in which he describes “A Dozen Improvements in SAP SuccessFactors from SAP HCM.“ If you are interested in those innovations you can find them here:

https://www.linkedin.com/pulse/dozen-improvements-sap-successfactors-from-hcm-imran-sajid/

Technical migration

As mentioned above, customers will be able to run HCM embedded or on a separate SAP S/4HANA on-premise instance based on their current deployment model and go-forward preference. We offer migration tools and services to facilitate a non-disruptive migration from SAP ERP HCM or SAP S/4HANA compatibility pack. One common question I got is “what can we do to prepare? Do we need to upgrade to EhP8 upfront.” The answer is no, there is no need to upgrade before you convert to SAP Human Capital Management for SAP S/4HANA, on-premise edition.

Details on pricing and commercialization are being worked on and will be communicated soon, but not yet available. We plan to offer license conversion consistent with the existing SAP S/4HANA conversion policy. I will come back to you with more details on this and technical topics in the next few months once they are available.

Let me close with a quote from Thomas Saueressig, President, SAP Product Engineering, SAP SE: “We see the future of HR solutions in the cloud. With SAP Human Capital Management (HCM) for SAP S/4HANA, we offer those customers who cannot switch to SAP SuccessFactors by 2025 a reliable transitional solution. The embedded operation of this interim solution in SAP S/4HANA should make migration easy for our customers.”