SAP Human Capital Management for SAP S/4HANA, on-premise edition – Available in Q4 2022 as part of the SAP S/4HANA release

Update June 2021

SAP has 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 deploy SAP HCM for SAP S/4HANA in an SAP S/4HANA environment (single instance). This will give customers the option 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 fourth 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). Please note that SAP Travel Management (FI-TV) will be also available in SAP S/4HANA going forward. 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.

Investments/Enhancement

All new enhancements for SAP ERP HCM will also be available in SAP HCM for S/4HANA on-premise and SAP S/4HANA, Compatibility Pack.

One note, the following four apps (My Reporting, My Team, My Overtime, My Forms) are planned to be delivered for SAP ERP HCM in 2020 and 2021. Often, we got the concern that those will be only coming with SAP HCM for S/4HANA on-premise, but this is not the case.

With regards to enhancements we have five roadmap areas:

• Baseline activities (.e.g. merge of the software layers, replace JAVA technology)
• Integration: (e.g. SAP One Domain Model, employees to business partners)
• Performance Improvements (e.g. structural authorizations, Replacing T-REX with HANA search)
• Functional enhancement
• User Interface (New Fiori apps, visual harmonization for most common transactions)

More details on the road map items will become available in the SAP Road Map Explorer step-by-step. Please see here (already filtered).

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. But please keep in mind that after 2025, SAP will provide support for the latest three Enhancement Packages only. Please find more details here.

At the moment our working assumption is that customer can use existing tools like:

• SAP S/4HANA Conversion Guide (here)
• Custom Code Migration Guide for SAP S/4HANA (here)
• SAP Readiness Check (here)

Please read also this blog from my colleague Amin Hoque as a starting point to explore your options to move to SAP S/4HANA (here).

Commercialization and Pricing

Our approach is to harmonize pricing across all HCM /HXM solutions. Therefor we plan to move towards a more consumption-based approach which will contain three scenarios for Core HR (Core HCM, Time Tracking and Payroll). The SAP Learning Solution and SAP eRecruiting will be also available. All materials codes will include the so-called engines and user rights with a single metric. The final pricing will be available once the solution will be released to customers. A license conversion within the existing SAP S/4HANA conversion policy is also planned for SAP HCM for S/4HANA.

Maintenance Strategy 

On February 4^th 2020 we announced an ‘Innovation Commitment for SAP S/4HANA – Clarity and Choice for SAP Business Suite 7’ (see full press release). The extension of the maintenance for SAP Business Suite 7 core applications until the end of 2027 (with extended maintenance till 2030, see more details here) does not change any strategic direction for our HR offering. SAP SuccessFactors remains our only go-forward medium to long-term solution, this just gives those organizations, who are as yet not ready to transition, some more time.

The availability and planned scope for SAP Human Capital Management for SAP S/4HANA, on-premise edition stays the same. Customers should know that we have listened to them and as a result, they have a longer transition window to move to SAP SuccessFactors.

Let me close with a quote from our board member Thomas Saueressig, 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.”