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Author's profile photo Rajarajeswari Kaliyaperumal

H4S4 Vs SAP HCM Compatibility packs – High-level overview

In this blog, I wish to explain the high-level details of H4S4 and HCM compatibility packs and their differences and usage scenarios. This blog is intended for consultants/customers who want to have a basic understanding of H4S4 and compatibility packs of HCM.

H4S4(SAP HCM for S/4HANA) and HCM compatibility packs(CP) are targeted at SAP HCM customers who are not yet ready for a full transformation into SAP SuccessFactors.In other words these components act as a bridge between the 2 worlds (On-premise(SAP HCM compatibility packs & H4S4) & SaaS product (Success factors)

 

Before understanding H4S4 and HCM compatibility packs one must understand what is a  compatibility pack(CP) in general.

What is a compatibility package in general?

A CP is a S/4HANA compatible copy of a “classic” = Business Suite software product.ie, A compatibility pack is a version of SAP Business suite component that is compatible with SAP S/4HANA on-premise edition(ONLY). In general, standard SAP Business suite products can not directly run on S/4HANA installations unless SAP is providing a CP version of that product. The main reason behind SAP releasing this is to aid customers to use a compatible version of a related SAP BusinessSuite product in SAP S/4 HANA while SAP  may be developing comparable business functionality in parallel(subject to change). Please note that a customer running CP does not need any additional licenses. Customers that have licensed SAP S/4HANA Enterprise Management, as well as the CPs related to an SAP Business Suite product, can use the applicable CP provided they have been properly licensed. Thus, CPs are available to both installed base customers and net-new customers.

All CPs are listed on the Compatibility Scope Matrix. For more information refer OSS note:2269324 – Compatibility Scope Matrix for SAP S/4HANA. It contains complete or partial solutions,LoB/Industry- and ERP Core solutions, and additional information to better identify the scope and cross-link information (as applicable – application component, link to Simplification Item, ID)

We must note that CPs generally have their own expiry date. Post their expiry date, CP must not be run any longer. To find the expiry date CPs use SAP S/4HANA SAP S/4HANA compatibility matrix. Most of the CPs expire by end of 2025 except for Customer Service (CS), Transportation (LE-TRA), and Production Planning for Process Industries which will expire at the end of 2030. Detailed information about available alternative functionality can be found in SAP Note #2269324. In this note, there is an attachment – The S4HANA CompScope – Way Forward – Info.xlsx. It provides a list of corresponding business impact notes for each Compatibility Scope item with further details about the alternative solution in SAP S/4HANA, if any, in the note attachments

We must also note that CP packages of related business suite products are release independent. ie, They are static and are independent of S/4HANA releases.No new editions will be added to it.

Now that we understand the usage of CP, let’s further discuss CP specific to HCM.

What is SAP HCM compatibility mode for S/4HANA?

SAP_HR/EA_HR based on ERP6.0 EHP8 forms the CP of SAP HCM. ie, The S/4HANA on-premise product versions (S/4H OP) include Human Capital Management (HCM, based on software components SAP_HR and EA-HR) of the ERP 6.0 Enhancement package 8 (versions 608 of SAP_HR/EA-HR), as so-called ‘Compatibility Mode’ (For more information please refer SAP Note 2273108 S4TWL – General HCM Approach within SAP S/4HANA).

SAP S/4HANA customers using HCM functionality on-premise can continue using SAP ERP HCM in the so-called Compatibility Mode without a need for extra installation. However, support for the SAP HCM compatibility pack for S/4HANA expires by 2025. Hence, customers are required to migrate from SAP ERP HCM on-premise to the designated alternative functionalities SAP SuccessFactors Employee Central or H4S4( SAP Human Capital Management for SAP S/4HANA on-premise edition)/ (SAP HCM for SAP S/4HANA) before HCM CP license expiry.

So what is H4S4(SAP HCM for SAP S/4HANA)?

H4S4 is a new HCM on-premise solution based on SAP ERP HCM with optimizations with selected innovations to leverage SAP S/4HANA.SAP HCM for SAP S/4HANA will be part of the initial shipment of SAP S/4HANA 2022 on-premise. However,  it is not the legal successor of SAP HCM. It contains additional functionality that can be viewed in the SAP Roadmap Explorer. The planned scope matches the key functionality of SAP ERP HCM. But, one must note that some of the known SAP HCM ERP functionality will not be part of SAP HCM for SAP S/4HANAs. For more information refer SAP Note 3091160.

SAP is also providing this component in the form of SKU which can be subscribed on top of standard SAP S/4HANA Cloud 2022, private edition. Ie, SAP HCM in RISE with SAP S/4HANA Cloud, private edition.NOTE: All Talent Solutions incl. SAP E-Recruiting and SAP Learning Solution are not part of SAP HCM RISE offering. Please refer to OSS notes 2383888 and 2383837 for more details.

So, is H4S4 capable for replacing SAP SuccessFactors?

The answer is NO. SAP SuccessFactors remains the primary focus of SAP HCM innovations and is therefore the go-to architecture in the HCM area.

Customers who fall under the below categories can potentially go for H4S4(SAP HCM for SAP S/4HANA)

-who are not willing or able to move to SAP SuccessFactors in the near future,

-who need continuity and investment protection for HCM functionality on-premise,

However, SAP does not plan for major additional functionality or re-architectures.H4S4, is intended as a bridge to give customers additional time to move to SAP SuccessFactors.

To summarize the above details in simple words, SAP S/4HANA customers can use SAP ERP HCM until the expiry date of the compatibility pack license. Afterward, a migration to SAP Human Capital Management for SAP S/4HANA is required. If the current HCM configuration is affected by one or more simplifications (see SAP Note 3091160), the affected functionalities must be replaced by their alternatives, if applicable. Alternatively, customers can move to SAP’s HCM go-to solution SAP SuccessFactors.

Below are the high-level differences involved.

# SAP HCM Compatibility Pack SAP HCM for SAP S/4HANA
1 Available with SAP ERP EHP8 components (SAP_HR 608 and EA_HR 608) Available as a part of the initial shipment of  SAP S/4HANA 2022-on-premise
2 These are release independent and static Release dependent.
3 SAP provides support for this CP until  2025 SAP provides support until 2040
4 Compatibility Packs are only required for solutions that are installed on the SAP S/4HANA instance – not for side-by-side installations. This can be deployed alongside or embedded within SAP S/4HANA
5 SAP aims to replace these classic solutions by the end of 2023 with a genuine S/4HANA solution This acts like a bridge product before a customer can transform their HCM product to SuccessFactors
6 Do not need a dedicated license for usage A specific license is required for usage

 

The below diagram provides the SAP commitment for support towards the specified products. SAP S4HANA Compatibility pack support ends at 2025, while SAP is committing to H4S4 support till 2040 

Source: https://assets.dm.ux.sap.com/webinars/sap-user-groups-k4u/pdfs/201007_s4_op_licensing.pdf

https://blogs.sap.com/2020/02/17/sap-business-suite-7-extension-what-this-means-for-sap-erp-human-capital-management-customers/

 

Now that we understood the basics of CP, HCM CP for S/4HANA, and H4S4, I wish to discuss further the scenarios available for HCM on SAP ERP customers to move towards H4S4 and finally to SuccessFactors.

So, as an SAP HCM customer on-premise, below are the options available before taking a full transformation to Successfactor.

 

Strategy1:Target SAP HCM for SAP S/4HANA in SAP S/4HANA 2022 either by using a system conversion to SAP S/4HANA 2022 or by performing an upgrade of a former SAP S/4HANA

In this strategy, first, we perform a technical transition to SAP S/4HANA 2022. After this transition, technically HCM will be in CP.(Note that already existing HCM simplifications can apply here and can be found by executing an SAP Readiness Check for S/4HANA or in the Simplification Item Catalog). As a second step, the business function for SAP HCM for SAP S/4HANA (H4S4_1) must be activated in the switch framework. Before switching on the business function H4S4_1 please check  SAP Note 3200799 for the simplifications that are valid. In general: The check can be executed before or after the conversion or upgrade to SAP S/4HANA 2022 with the SAP Readiness Check for S/4HANA. If simplifications apply, the affected functionalities must be replaced by their alternatives, if applicable.

After switching on the business function, SAP HCM for SAP S/4HANA is activated and new features can be used. Please keep in mind: Simplified functionalities are technically deactivated. Note that, activation of the business function is irreversible.

Strategy2:Target SAP HCM Compatibility Pack in SAP S/4HANA 2022 either by using a system conversion to SAP S/4HANA 2022 or by performing an upgrade of a former SAP S/4HANA

In this case, the customer might still prefer to use the SAP HCM in the compatibility scope in S/4HANA 2020. Though we can continue to use all functionalities of the Compatibility Pack, we must understand that usage rights of compatibility packages will expire as specified in SAP Note 2269324. This means after this point in time the migration to SAP HCM for SAP S/4HANA and the other designated alternative functionalities must happen immediately as it would have turned out to be unavoidable by then

Strategy3:Target SAP HCM in RISE with SAP S/4HANA Cloud, private edition

Under RISE with SAP, SAP HCM is available to customers as a subscription. This target state can be attained either via a system conversion or a system upgrade to SAP S/4HANA 2022 Cloud, private edition.

To understand more about the private edition of SAP HCM under RISE subscription, refer OSS note ‘3091160 – SAP HCM for SAP S/4HANA – General Approach and Strategy’ and the attached PDF in that note.NOTE: All Talent Solutions incl. SAP E-Recruiting and SAP Learning Solution are not part of SAP HCM RISE offering. We can also refer to OSS notes 2383888 and 2383837

NOTE: In all the above-specified scenarios, if none of the simplifications of S/4HANA affects the current SAP HCM configuration, then from a technical perspective the transition to SAP HCM for SAP S/4HANA will be seamless/non-disruptive.

Key facts:

1.Some of the SAP ERP HCM functionalities are generally not available with SAP S/4HANA (for example: ESS/MSS on Java, ITS, …).

1.SAP Notes 3091160 and 3217773 contain a list of all simplified functionalities involved

2.HCM in SAP S/4HANA has the same release and maintenance cycle as SAP S/4HANA overall.
HCM in SAP S/4HANA will contain some enhancements in some areas and components.

 

Key SAP OSS notes:

1.3091160 – SAP HCM for SAP S/4HANA – General Approach and Strategy

2.3217773 – SAP HCM for SAP S/4HANA – General Information for Simplifications in SAP HCM Local Versions

3.2269324 – Compatibility Scope Matrix for SAP S/4HANA

4.3213848 – S4TWL – Simplification of HCM DK (HRDK) Local Version in SAP HCM for SAP S/4HANA

5.3200799 – Business Function for SAP HCM for SAP S/4HANA

6.3044085 – FAQ – Use and Future of HCM module in S/4HANA OnPremise

7.2383879 – S4TWL – ESS and MSS technologies not available in Compatibility Pack and SAP HCM for SAP S/4HANA

8.2273108 – S4TWL – General HCM Approach within SAP S/4HANA

9.2768103 – Technical HR dependency in S/4HANA on premise

 

Public source:

https://assets.dm.ux.sap.com/webinars/sap-user-groups-k4u/pdfs/201007_s4_op_licensing.pdf

https://blogs.sap.com/2022/08/09/compatibility-scope-what-happens-after-2025-2030/

https://help.sap.com/doc/PRODUCTION/pdfac0fa9551dd88809f10000000b441570/1511%20000/en-US/MATRIX_OP1511.pdf

https://help.sap.com/doc/7a02948aad1141429024a449a4bb14b9/1511%20000/en-US/CP_FAQ.pdf

https://blogs.sap.com/2019/09/25/sap-human-capital-management-for-sap-s4hana-on-premise-edition-updates-available-in-2022-with-a-technical-co-deployment-in-sap-s4hana/

https://roadmaps.sap.com/board?PRODUCT=73554900100800000266&range=CURRENT-LAST&PROCESS=E2E_TWM#Q4%202021

https://blogs.sap.com/2020/02/17/sap-business-suite-7-extension-what-this-means-for-sap-erp-human-capital-management-customers/

 

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      2 Comments
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      Author's profile photo Willian Heissler
      Willian Heissler

      Nice job!

      Author's profile photo Rick Gomez
      Rick Gomez

      So there is a slight confusion on our side. We are currently on S/41909. We reference our HCM system in S/4 as HR Renewal 2.0. Is HR Renewal 2.0 the same as saying SAP HCM Compatibility Pack or is it referenced as SAP ERP HCM in Business Suite? Is there a upgrade path for HR Renewal 2.0 to H4S4?