Why is everyone moving away from SAP HR?

SAP HCM no longer exists in the new software generation SAP S/4HANA. However, companies that have previously used HCM integrated with other modules can still migrate to SAP S/4HANA. This is made possible by so-called Compatibility Packs, which also make the usual functionalities available under SAP S/4HANA. However, it is important to know that all Compatibility Packs can only be used until the end of 2025. Until then, SAP will offer alternatives.

A compromise has been announced for companies that cannot or do not want to use the cloud-based SuccessFactors. It bears the name “SAP HCM for S/4 HANA” and will be available from 2023. In contrast to ERP 6.0, this solution will not run integrated with SAP S/4HANA. It must be run on a separate server, often referred to as a sidecar. With regard to the functional scope, the solution will not differ significantly from today’s SAP HCM. Support for this compromise solution is also expected to be limited. According to current reports, it will end in the year 2030. If nothing changes in this strategy, there is no way around the introduction of SAP SuccessFactors in the long term.

SuccessFactors was originally a stand-alone US company that offered a cloud-based talent management suite with analytics and collaboration capabilities. SAP took over the company in 2011 and since then has massively enhanced its functionality. SuccessFactors is now a complete HCM solution from the cloud. It contains all functions from the classic SAP HCM. In addition, however, some other innovative features are available. To call are:

  • (E-)Recruiting: supports a collaborative, objective and mobile selection process
  • Onboarding: configurable onboarding process involving new employees, hiring managers and an onboarding buddy
  • Compensation: maps all compensation processes, central element is a compensation profile including salary history and positioning
  • Performance & Goals: controls target agreements and monitoring of target achievement for performance evaluation
  • Learning: Learning platform that is linked to numerous other modules (e.g. goal management and onboarding); can be used on the go
  • Succession and Development: controls and automates succession planning activities
  • Employee Central: responsible for master data administration and for mapping personnel administration, organizational management, absences and payroll accounting (optional); basis for integration with on-premise solution
  • SAP JAM: communication and collaboration platform for employees, similar to a social network
  • Analytics: enables the creation of reports for all SuccessFactors modules

Ultimately, it is clear that SAP is focusing its HR innovations on SuccessFactors. The decision to introduce the platform can therefore be described as future-proof. As far as the HR sector is concerned, SAP is following strategy that explicitly moves in the direction of SAP SuccessFactors, the new cloud solution. It was announced that in the long run, HCM would be fully substituted by SuccessFactors. It is not only the technical orientation that is exceptional, but also the modern use of language. SAP no longer calls “resources” or “human capital” to company workers, but “factor of success. But what are the technical differences between the two solutions?”



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