Is HRIS part of SAP?

The world of enterprise software can be complex, filled with acronyms and interconnected systems. Among the most crucial of these systems are Human Resources Information Systems (HRIS) and Enterprise Resource Planning (ERP) solutions, particularly those offered by SAP. A common question that arises is whether HRIS is inherently a part of SAP. The answer, while seemingly simple, requires a nuanced understanding of SAP’s offerings and the evolution of HR technology.

Understanding HRIS: The Foundation of HR Management

Before delving into the relationship between HRIS and SAP, it’s essential to define what an HRIS actually is. An HRIS, or Human Resources Information System, is a software solution designed to streamline and automate various HR functions within an organization. It serves as a central repository for employee data and facilitates processes related to:

• Employee Data Management: Storing and managing employee information, including personal details, contact information, job history, compensation, benefits, and performance reviews.
• Payroll Processing: Automating payroll calculations, tax deductions, and direct deposit payments.
• Benefits Administration: Managing employee benefits programs, such as health insurance, retirement plans, and paid time off.
• Recruitment and Onboarding: Supporting the hiring process, from posting job openings to onboarding new employees.
• Performance Management: Facilitating performance reviews, goal setting, and employee development.
• Training and Development: Managing employee training programs and tracking employee skills and certifications.
• Compliance: Ensuring compliance with labor laws and regulations.
• Reporting and Analytics: Providing data and insights into HR metrics, such as employee turnover, absenteeism, and compensation costs.

In essence, an HRIS acts as the backbone of an organization’s HR department, enabling them to manage their workforce more efficiently and effectively. It automates tedious tasks, reduces errors, and provides valuable data for strategic decision-making.

SAP: The ERP Giant and its HR Capabilities

SAP (Systems, Applications & Products in Data Processing) is a multinational software corporation renowned for its Enterprise Resource Planning (ERP) systems. ERP systems are designed to integrate all aspects of a business, including finance, manufacturing, supply chain, sales, and, yes, human resources. SAP’s ERP solutions are used by organizations of all sizes across various industries to manage their operations and improve efficiency.

SAP has historically offered robust HR capabilities within its ERP suite. These capabilities, often referred to as SAP HR or SAP HCM (Human Capital Management), encompassed many of the same functions as a standalone HRIS, including:

• Personnel Administration: Managing employee data, organizational structure, and reporting relationships.
• Payroll: Processing payroll and managing tax compliance.
• Time Management: Tracking employee time and attendance, managing leave requests, and scheduling work shifts.
• Talent Management: Managing employee performance, learning, and career development.
• Recruitment: Supporting the recruitment process, from job posting to applicant tracking.

Therefore, historically, HRIS was, in a sense, a part of SAP. SAP’s ERP system included a comprehensive HR module that addressed the core needs of HR departments.

The Evolution: From SAP HCM to SuccessFactors

The landscape of HR technology has evolved significantly in recent years, driven by factors such as the rise of cloud computing, the increasing importance of talent management, and the need for more agile and user-friendly HR solutions. In response to these trends, SAP made a strategic shift in its HR offerings, acquiring SuccessFactors in 2011.

SuccessFactors is a leading provider of cloud-based Human Capital Management (HCM) solutions. Unlike the traditional SAP HCM, which was primarily an on-premise system, SuccessFactors is designed to be delivered as a Software-as-a-Service (SaaS) solution, meaning it’s hosted in the cloud and accessed over the internet. This offers several advantages, including:

• Lower upfront costs: No need to invest in expensive hardware or software licenses.
• Faster implementation: Cloud-based solutions can be deployed more quickly than on-premise systems.
• Greater scalability: Easily scale your HR system to meet your changing needs.
• Automatic updates: Stay up-to-date with the latest features and security patches.
• Improved user experience: Cloud-based solutions often have more intuitive and user-friendly interfaces.

SuccessFactors offers a comprehensive suite of HCM modules, covering:

• Employee Central: The core HR system, providing a central repository for employee data.
• Performance & Goals: Managing employee performance, setting goals, and providing feedback.
• Compensation: Managing employee compensation and benefits.
• Learning: Managing employee training and development.
• Recruiting: Managing the recruitment process, from job posting to onboarding.
• Succession Planning: Identifying and developing future leaders within the organization.
• Workforce Analytics: Providing data and insights into workforce trends and performance.

With the acquisition of SuccessFactors, SAP essentially shifted its focus from SAP HCM as the primary HR solution to SuccessFactors. While SAP HCM still exists and is supported, SuccessFactors is now the strategic direction for SAP’s HR offerings.

So, Is HRIS Part of SAP Today?

The answer is now more complex. While SAP HCM historically included HRIS functionalities, the current landscape points to SuccessFactors as SAP’s primary HR solution. Therefore:

• SAP HCM (on-premise): Contains HRIS functionalities within its broader ERP system. It is still supported but is not the main focus for future development.
• SuccessFactors (cloud-based): Is SAP’s strategic HCM solution. It encompasses comprehensive HRIS capabilities and is designed to be a best-of-breed cloud platform.

Therefore, you could say that a form of HRIS is part of SAP, but it’s more accurate to say that SAP offers a comprehensive HRIS solution called SuccessFactors. SuccessFactors isn’t simply a module within SAP’s ERP system; it’s a standalone cloud platform that integrates with SAP and other systems.

Integration Between SuccessFactors and SAP ERP

One of the key advantages of using SuccessFactors in conjunction with SAP ERP is the ability to integrate the two systems. This integration allows for seamless data flow between HR and other business functions, such as finance, supply chain, and manufacturing. For example, employee data from SuccessFactors can be automatically updated in SAP ERP, ensuring that all systems have the most accurate information. Similarly, financial data from SAP ERP can be used to calculate employee compensation in SuccessFactors.

SAP offers various integration scenarios between SuccessFactors and SAP ERP, including:

• Core Hybrid: This scenario involves using SuccessFactors for core HR functions, such as employee data management and talent management, while continuing to use SAP ERP for payroll.
• Talent Hybrid: This scenario involves using SuccessFactors for talent management functions, such as performance management and learning, while continuing to use SAP ERP for core HR functions and payroll.
• Full Cloud: This scenario involves using SuccessFactors for all HR functions, including core HR, talent management, and payroll.

The choice of integration scenario depends on the organization’s specific needs and requirements. Organizations can choose to implement a hybrid approach, gradually migrating HR functions to the cloud, or they can opt for a full cloud implementation, replacing their existing SAP HCM system with SuccessFactors.

SAP HR Modules: A Deeper Dive into Functionality (SAP HCM)

Even though SuccessFactors is the strategic direction, understanding the modules within the traditional SAP HCM provides valuable context. These modules demonstrate the breadth of functionalities typically found within a comprehensive HRIS and how they were traditionally integrated within the SAP ecosystem.

Here’s a more detailed look at some key modules within SAP HCM:

• Personnel Administration (PA): This is the foundational module of SAP HCM. It manages all employee-related data, including personal information (name, address, contact details), organizational assignment (company code, personnel area, employee group), job information (position, job, pay scale group), and employment status. It allows HR professionals to maintain accurate and up-to-date employee records. PA also handles organizational structure management, defining the hierarchy within the company and reporting lines.
• Organizational Management (OM): OM is closely linked to PA and focuses on defining the organizational structure of the company. It allows you to create and maintain organizational units (departments, teams, cost centers) and assign employees to these units. OM facilitates workforce planning, identifying skill gaps, and managing headcount. It is essential for reporting and analytics, allowing you to analyze workforce data based on organizational structure.
• Payroll (PY): This module automates the complex process of payroll calculation, deduction, and disbursement. It handles various payroll tasks, including calculating gross pay, deducting taxes and benefits, generating pay slips, and making direct deposit payments. SAP Payroll supports different payroll frequencies (weekly, bi-weekly, monthly) and integrates with tax authorities to ensure compliance with tax regulations. It also manages employee benefits deductions and contributions.
• Time Management (TM): TM tracks employee working time, absences (vacation, sick leave), and overtime. It allows employees to record their working hours through time clocks, web portals, or mobile apps. TM automates the process of calculating employee attendance, managing leave requests, and scheduling work shifts. It integrates with payroll to accurately calculate employee pay based on their working time and attendance. TM also supports different work schedules and time off policies.
• Training and Event Management (TEM): TEM manages employee training programs and events. It allows you to create and manage training courses, schedule events, and track employee participation. TEM supports different training methods, including classroom training, online learning, and on-the-job training. It also tracks employee skills and certifications, helping you to identify skill gaps and develop employee training plans.
• Travel Management (TVM): TVM automates the process of managing employee travel expenses. It allows employees to submit travel requests, book flights and hotels, and track their expenses. TVM automates the process of reimbursing employees for their travel expenses, ensuring compliance with company travel policies. It integrates with travel agencies and credit card companies to streamline the travel booking and expense reporting process.
• Recruitment (E-Recruiting): While SuccessFactors is now the primary recruitment solution, SAP HCM’s E-Recruiting module still deserves mention. It supports the entire recruitment process, from creating job postings to managing applicant data. It allows you to post job openings on various job boards, screen resumes, schedule interviews, and track applicant progress. E-Recruiting helps to streamline the recruitment process and improve the quality of hire.
• Performance Management (PM): PM manages employee performance reviews and goal setting. It allows you to create performance review templates, set employee goals, and track employee progress. PM automates the process of conducting performance reviews, providing feedback, and developing employee performance improvement plans. It helps to improve employee performance and productivity.

These modules, working together, formed a comprehensive HRIS solution within the SAP ERP ecosystem. While SuccessFactors offers a more modern and cloud-based approach, understanding these foundational modules helps appreciate the historical context and the breadth of functionalities required for effective HR management.

Benefits of Using SAP for HR Management (Including SuccessFactors)

Whether you choose SAP HCM or SuccessFactors, using SAP for HR management offers several significant benefits:

• Integration: SAP solutions are designed to integrate seamlessly with other SAP modules and systems, creating a unified platform for managing all aspects of your business. This integration eliminates data silos, improves data accuracy, and streamlines business processes. SuccessFactors, in particular, boasts robust integration capabilities with SAP S/4HANA.
• Scalability: SAP solutions can scale to meet the needs of organizations of all sizes, from small businesses to large enterprises. Whether you have a few hundred employees or tens of thousands, SAP can provide the tools and resources you need to manage your workforce effectively.
• Compliance: SAP solutions help you comply with labor laws and regulations, reducing the risk of fines and penalties. SAP solutions are regularly updated to reflect changes in legislation, ensuring that you are always in compliance.
• Automation: SAP solutions automate many HR processes, such as payroll processing, benefits administration, and time management. This automation reduces manual effort, improves efficiency, and frees up HR professionals to focus on more strategic initiatives.
• Analytics: SAP solutions provide comprehensive reporting and analytics capabilities, giving you insights into workforce trends and performance. This data can be used to make informed decisions about hiring, compensation, training, and other HR programs. SuccessFactors Workforce Analytics provides particularly powerful insights.
• Improved Employee Experience: By streamlining HR processes and providing employees with self-service tools, SAP solutions can improve the employee experience. Employees can easily access their personal information, request time off, and enroll in benefits programs, without having to contact HR. SuccessFactors is known for its user-friendly interface and mobile capabilities.

Choosing the Right SAP HR Solution: SAP HCM vs. SuccessFactors

Deciding whether to use SAP HCM or SuccessFactors depends on several factors, including your organization’s size, industry, existing IT infrastructure, and budget. Here’s a comparison to help you make the right choice:

In general, if you are a large enterprise with a significant investment in SAP ERP and a preference for on-premise solutions, SAP HCM might be a suitable option. However, if you are looking for a more modern, scalable, and user-friendly HR solution, SuccessFactors is likely the better choice.

Conclusion: HRIS within the SAP Ecosystem

In conclusion, while HRIS isn’t a monolithic “part” of SAP in the traditional sense anymore, the spirit of HRIS is alive and well within the SAP ecosystem. SAP offers comprehensive HR solutions, primarily through SuccessFactors, which encompasses all the essential functions of an HRIS. SuccessFactors, as SAP’s strategic HR platform, provides a modern, cloud-based approach to managing your workforce, offering integration with other SAP systems and a wealth of advanced features. Understanding the evolution from SAP HCM to SuccessFactors is crucial for organizations seeking to leverage SAP for their HR needs and choosing the right solution for their specific requirements.

Whether you opt for SAP HCM (if you have compelling reasons) or embrace the future with SuccessFactors, SAP provides the tools and resources you need to manage your human capital effectively and achieve your business goals. The key is to carefully evaluate your organization’s needs and choose the SAP HR solution that best aligns with your strategic objectives.