There has been a definite push as of late to adopt SAP SuccessFactors Employee Central as companies seek to expand their cloud footprint. Cloud HR adoptions have also seen massive strides, as companies have begun implementing SAP SuccessFactors Employee Central Payroll as their in-house payroll solution. Most of the companies that are involved in implementing Employee Central Payroll have decided to go this route because of the lowered costs as a result. However, there are other factors at play. For many companies, the looming end-of-maintenance date of 2027 for individual on-premise payroll solutions like SAP ERP HCM and Payroll is a significant concern. Other companies, impressed by how the cloud has impacted other businesses positively, are looking at the implementation of Employee Central Payroll as a strict upgrade.
The Role of Employee Central Payroll
Many of the adopters of Central Payroll have remarked on its similarities to on-premise payroll solutions that businesses currently utilize. Based on how these payroll records are processed (both process data on-site, even though Central payroll’s information exists on the cloud), concerns have come to light about whether businesses even need to implement Central Payroll. The most significant difference is maintenance support. Employee Central Payroll is unique in that there is no end-of-maintenance date for the software.
On-premise payroll solutions all have end-of-maintenance dates attached to them in order to provide continuous integration and delivery (CI/CD). As these bits of software reach these dates, they will no longer see maintenance upgrades by the company. The ECC platform has the end-of-maintenance year set as 2027, and SAP S/4HANA’s scheduled end-of-maintenance date is 2040.
Complexity Slows Adoption
Another of the significant concerns that some businesses had raised about adopting Employee Central payroll is the complexity of their existing systems. It’s a notable fear, considering how many unique situations arise in their on-premise solution. The concern is that a new system wouldn’t be able to handle these situations the same way. However, while Employee Central Payroll offers a higher level of standardization in its records, it still provides a lot of customization to companies. Clients that implement Central Payroll can even utilize custom infotypes and configure schemas and rules similar to existing on-premise systems.
Less Dependency on Hardware
Probably the best thing about implementing a cloud solution is the lower dependence on processing hardware. On-premise solutions have always had double the cost associated with their implementation. Installs would require both the software and network architecture as well as the equipment that would serve as the “home base” for the payroll system. Many times, it also meant that the business would need backups, which translate into even more money spent to ensure the system had fail-safes in case of problems. With all records accessible on the cloud from any standard machine, there is no need for on-premise hardware specially designed to run as servers.
While the need for hardware isn’t a concern, there is still going to be a need for system administrators. The cloud isn’t a system that removes the need for networking architecture, but rather a way for businesses to simplify their operations. System admins will have to train themselves to run SaaS troubleshooting and be able to operate within the cloud with the same efficiency as they can with on-premise networking. The migration will also require transformations, as the data that Employee Central uses is not the same as ECP. Depending on how HR implements Employee Central, these transformations shouldn’t be too complicated for skilled IT staff.
Key Considerations Moving Forward
When looking at changing platforms for payroll processing, a handful of elements stand out for businesses to take notice of. HR needs to be included in the migration to ensure that good payroll practices form the core of the new system. Global implementation templates are time-savers by allowing all global payrolls to function with ECP. Simplifying the payroll process is crucial before moving to ECP. Extraneous processes can cause problems in implementation and introduce inefficiencies into the system. The long-term management of HR alongside payroll should always be at the forefront of the company’s vision. While smaller businesses might be able to get away with migrating all their systems at once, larger, globally-based businesses should move HR, time management, and benefits to a brand-new system before considering moving the payroll system across.