“Don’t Mess with Payroll”—and other Lessons from SAPinsider HR

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I attended the SAPinsider HR conference in Las Vegas this last week – and the energy of the audience was contagious. Let me share nuggets of what I gleaned from attendees:

  1. If your production environment is on-premise, you will not be planning any rip and replace strategies in the near term; while aspects of an ERP may in fact be more cumbersome than desired, that working business infrastructure is not up for replacement.

  2. If, on the other hand, your talent management applications (learning or hiring management, for example) are on-premise, you are not only possibly ripe for replacement, but very likely seeking a Cloud-based solution rather than on-premise software.

  3. If you are part of the 44 percent[1] who are planning to replace an HRIS system this year, you are seriously investigating a Cloud solution.

  4. Payroll is generally scary.  If users have a working solution today that covers their global payroll needs, they are unlikely to replace it. Two scenarios, however, lead to payroll replacement:  companies that are replacing an older on-premise system that had embedded payroll, and those simply contemplating a change of payroll providers; these seem “up for grabs,” as the saying goes.

What does all this mean? 

First, the understanding of what software-as-a-service (AKA Cloud computing) has grown exponentially. Today’s HRIS/HRIT professionals in general exhibit solid understanding of the concept, the advantages and sometimes-radical changes that may emanate from cloud computing. 

Second, the two fears about Cloud computing –“Is my data safe?  Can I keep employee data private?” are oh-so yesterday.  Today’s buyers are in the main comfortable with both the security of HR and talent management in the Cloud, and the ability to keep it private via multi-tenant solutions.

The SAP HR Future

SAP CEO Mike Ettling stated in his keynote that the company would support its on-premise HCM solution until 2025, giving its 14,000+ users ten years to consider a move to the Cloud-based Employee Central, the product that SAP is putting its longer-term Core HR development Euros into. 

 Today’s HR and HRIT professionals at the conference seem to be very serious in their commitment to the concept of talent management. They are also savvy buyers—and looking at the SuccessFactors’ Cloud solutions in many cases as a replacement for on-premise learning, as one prominent example.

Will the Cloud be a solution for everyone? Absolutely not. There are reasons why an organization might not be bounding to the Cloud. For example:

  • The company currently has extra capacity in its data center and an internal IT staff which is not utilized 100 percent.

  • The organization is a highly complex setting with rigid compliance requirements.

  • It is an environment that require extensive customization to meet its business needs.

  • It is an extremely high-secure environment (for example, federal security or top-secret defense sites).

  • The company is located in as region with a highly unreliable communications infrastructure.

Our research shows that 52 percent of buyers planned on using Cloud-delivery as a criteria in the next HCM purchase; 41 percent indicated that their HR strategy had shifted to such Cloud support.[2]  These statistics were borne out in the views of conference attendees.

 

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

 

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[1] Investments in Human Capital Management Systems 2014. Katherine Jones, Ph.D. Bersin by Deloitte. 2014. 

[2] Ibid.

Christa Degnan Manning

Christa Degnan Manning leads Bersin by Deloitte’s solution provider research. In this role, she collaborates with Bersin and Deloitte colleagues across practices to identify and analyze software and service providers that support and sustain success in human resources, workforce enablement, and organizational effectiveness. Christa’s research and advisory work helps businesses align their workforce support strategies with the right third-party partners and governance models to deliver functional capabilities and employee experiences that support productivity, engagement, and workforce efficiency. She also helps solution providers map their capabilities and go-to-market activities with solution buyers’ and users’ critical needs. Christa draws on more than two decades of business-to-business market research, operational leadership, and global workforce experience. She holds a Master’s degree from the University of Massachusetts, and a Bachelor of Arts degree from Barnard College, Columbia University, including studies at University College, University of London.

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