New SAP and SuccessFactors Cloud Payroll Offering

SAP and SuccessFactors quietly launched the beta release of cloud payroll for USA, Canada, Mexico, UK, Germany, Switzerland, Netherlands, Australia, Brazil, and India for customers using Employee Central last week. I had the opportunity to get a briefing from SAP and SuccessFactors a few weeks ago and thought I would share my thoughts.

Overview

The initial release is a bit of hybrid approach where the basic employee records maintained in Employee Central are replicated “almost real-time” to the cloud payroll environment and all the payroll data will be maintained in the cloud payroll system. The payroll administrator will execute all their processes (i.e. Running Payroll, Banking, and Posting to FI) inside the hosted cloud payroll system.  Here are some of the specific product details:

• Offers integration between Employee Central, SAP Payroll (Cloud) and SAP OnPremise Financials
• Uses SAP Payroll which I believe is the best global solution in the marketplace
• Hosted by SAP/SuccessFactors cloud organization in their German data center with a plan to roll out to regional centers in the future
• Single tenant with a three tier landscape
• Uses Boomi for replication but strategic direction longer term is to use PI OnDemand
• SAP/SuccessFactors provides the software and hardware installation and maintenance
• Customer has full control over payroll implementation and processing and not a BPO offering

Future Roadmap (Planned)

The updates schedule will follow the SuccessFactors quarterly release schedule and here is what is “planned” for October, 2012.

• Extended employee mini-master replication for the initial10 countries
• Master Data UI harmonization for the initial 10 countries using the latest WebDynpro developments from the HR Renewal project
• Selected processes can be executed from Employee Central such as an employee viewing payslip
• Selected master data reports

Here are the updates “planned” for February, 2013

• Mini – Master replication for additional countries
• Full Master data UI harmonization for the initial 10 countries
• Additional payroll transactional UI harmonization in areas such as payroll reporting, off-cycle, configuration tools etc.
• Additional country specific reporting

Consulting

Having been engaged in many high profile SAP Payroll projects over the past 14 years I know firsthand how important it is for companies to get payroll right as there is little room for error. Many of the high profile enterprise software failures have been payroll related and the most common cause has been poor or inexperienced consultants. Given that the foundation of SAP Cloud payroll is based on the SAP OnPremise Payroll solution it is extremely important that any SuccessFactors customers looking at this offering make sure they engage with SAP Payroll consultants with the specific country experience as that will be the core skill set needed.  On that note here are Seven Tips to ensure you hire the Right Consultant

This has been a huge undertaking for both the SAP and SuccessFactors teams and while I think some solid progress has been made in a short period of time there is still a long ways to go. In a perfect world I would have liked to see SAP and SuccessFactors start development on a next generation multi-tenant payroll solution which Naomi Bloom does a very good job in outlining the benefits in this article but it is obvious that the complexity and length of time it would take as well as competitive pressure influenced that strategic decision.  In general there are several differing viewpoints around multi-tenancy and I think Phil Wainewright does a good job of unraveling different viewpoints in his recent Multi-tenancy: are they selling you a pup? article.  The bottom line is SAP has a history of having their payroll solution used at many large Global and Fortune 500 companies so I have no doubt that over the next 6 to 12 months they will be able to move this from a Beta solution to a more solid product offering.