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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 4th 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.”

 

29 Comments
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  • Thank you - this will make our modernization strategy much more in line with previous efforts (our SAP solution suite is over 20 years old); and we all know that change can be risky - especially in HR and Payroll solutions. This will allow us to explore the immediate improvements in Finance and Logistics offered in S/HANA - while allowing us to more gradually perform HR transformation in a more reasonable fashion.

    Regards, Paul Waite

  • As this replaces the side-car option, will the maintenance support be also until 2030 only? I noticed from the slide that 2030 is already omitted.  Does this mean that there are no definite plans yet for end of maintenance for this new option?

  • Hi Ralf,

    In your slide on the scope of SAP HCM for S/4HANA, you list Public Sector but list PY-DE-PS explicitly (Germany Public Sector)… would other country specific public sector solutions be covered, eg. PY-GB-PS for Great Britain?

     

    Thanks in advance,

    Stephen

     

  • As for "Personnel Cost Planning" the very old component PA-CM-CP is mentioned as being supported. Am I right that this is a mistake? The current solution "Personnel Cost Planning and Simulation" would be PA-CP.

  • Hi Ralf,

    in all the slides this solution is clearly only available for S/4HANA on premise. My question: what about S/4HANA STE (That is in fact a S/4HANA on premise running at a hyperscaler)? Technically this shoudln'd be an issue....

     

    Thanks in advance,

     

    Michael

     

    • I believe that if you use the HCM/PY compatibility packs support ends in 2025. The yet to be revealed S4 HCM/PY solution would then have to be deployed/implemented to be covered to 2040.

  • Hi Ralf,

    We currently have our FI & HCM in a single ERP instance  & FI would like to move to S/4 HANA Cloud.

    Is the following cloud option available? i.e. co-deploy (SAP HCM for SAP S/4HANA / Cloud) in an SAP S/4 HANA Cloud environment (single instance)?

    ~Suresh

  • Greg, in response to your post last week, our understanding, based on Ralf's slide above and on the associated OSS note (2881788) is as follows (and it would be great if someone from SAP could confirm/review this understanding):

    1. The Do Nothing approach- If you are a current customer on one of the release levels listed below you are supported until 2027 with all Core components including HCM, extended maintenance available until 2030.
    2. Upgrade to S/4 HANA including the new SAP HCM for SAP S/4HANA,after 3rd quarter 2022 but before 2027 - you are supported until 2027 with all Core components including HCM, extended maintenance available until 2040.
    3. Upgrade to S/4 HANA before 3rd quarter 2022 - For HCM you can use the Compatibility packs until 2025 and then if you convert tto he new SAP HCM for S/4 HANA you are supported until 2027 with all Core components including HCM, extended maintenance available until 2040.

    From OSS note 2881788:

    This note reflects the current status of planning and may be updated at short notice.

    (**) After 2025, SAP will provide mainstream maintenance for the following SAP Business Suite 7 Enhancement Packages until December 31, 2027 and provide optional extended maintenance from January 1, 2028 until December 31, 2030:

    • EHP6 FOR SAP ERP 6.0 (release level: 6.06) - support non-unicode and unicode deployments
    • EHP7 FOR SAP ERP 6.0 (release level: 6.17) - support non-unicode and unicode deployments
    • EHP8 FOR SAP ERP 6.0 (release level: 6.18) - support unicode deployments
    • Good summary but to slightly tweak option 2 & 3 …

       

      2. Upgrade to S/4 HANA including the new SAP HCM for SAP S/4HANA,after 3rd quarter 2022 but before 2027 – you are now using S4HANA and supported until (at least) 2040.

       

      3. Upgrade to S/4 HANA before 3rd quarter 2022 – For HCM you can use the Compatibility packs until 2025 and then if you convert to the new SAP HCM for S/4 HANA then you are now using S4HANA and supported until (at least) 2040.

       

      i.e. I'm making the point that SAP HCM for S/4HANA has the same end of life as S/4HANA. I think Reinis is also making this point in his reply below.

       

  • Great summary Jeff! We’re facing same challenge and have reached somewhat similar understanding regarding available S4/HANA transition options for HCM customers that are currenty on SAP ECC 6.0. Yet I would actually see point [3] being split in two sub-scenarios (see “migration options” diagram in original blog post):

    3a. Use compatibility pack co-deployed in S4/HANA (single instance) till 2025 (end of usage rights for single instance CP); Convert to HCM for S/4 HANA by then, get mainstream maintenance till 2040.

    3b. Use compatibility pack as sidecar of S4/HANA (deployed in same HANA DB, but as additional instance) till 2027 (mainstream maintenance) or 2030 (extended maintenance); Convert to HCM for S/4 HANA by then, get mainstream maintenance till 2040.

    Beside your questions, I would also appreciate, if someone from SAP could explain how would technical effort look like, to realize those [3a] and [3b] compatability pack conversions back to that plateau – HCM for S/4 HANA (released 2022-Q3).

  • Thanks Reinis, you are correct, I missed the sub scenarios (great title!). Hopefully someone from SAP will respond to our questions, regards, Jeff

  • Dear Ralf,

    what about the impact of SAP 4/HANA on Sap Payroll and Sap Time Management? Do the logics of customization will change? What are the impact on infotypes, Payroll and time Scheme?

     

    Best Regards

  • Thanks for the update Ralf.. it is now a bit more clear on what to expect.. hopefully the 'new' solution will be available for sure in Q3 2022

  • The SAP S/4HANA conversion policy is typically crediting the engine investment. However, SAP HCM is no engine, and is included in named users. How will this work out ?

  • Dear Ralf,

    We are wondering about the sustainability of HR-RENEWAL and Payroll Control Center in this new H4-S4/HANA. Does SAP plan to transform HR Renewal with FIORI apps or replace it with something new ?

    In PAM, the end of maintenance of HR Renewal has is planned at the end of 2027.

    Best regards,

    Simon

    • Hi Simon,

       

      nothing decided so far. More to come in early 2021. We will use Fiori for some additional scenarios but there are no plans at the moment to replace HR-Renewal entirely.

       

      Kind regards

      Ralf

      • Hi Ralf

        I am wondering if there is any updated information on the future state of Payroll Control Center. We are looking at implementing this on our S/4HANA system but not sure what the shelf life would be of this solution.

        If we are already on S/4HANA does this mean that we only have usage rights of Payroll Control Center until 2025 under the compatibility scope matrix?

        Is there a successor solution available for the payroll control center functionality?

        Thanks