The challenges and considerations in transitioning from SAP HCM to Cloud HR
Why to move from SAP HCM to Cloud HR
Luc Bossaert, Chief Strategy Officer at Adessa Group, talks to Sven Ringling, Director at Adessa Group in Germany, about the lessons learned and the things to consider on the journey to the Cloud!!
Read the full Podcast:
Hello, I´m Luc Bossaert, Chief Strategy Officer at Adessa Group, a SAP HCM SuccessFactors Kronos and Qualtrics partner supporting SAP customers in their journey to the cloud. Adessa Group has a European focus, working with local consultants from offices across all major European countries.
Today, I´m joined by Sven Ringling.
The man hardly needs any introduction, but I will do it anyway. Sven has been a SAP HR consultant since 1996, a SAP Mentor and later Mentor Alumnus since 2015 and has been working on HRIS Cloud solutions since 2011. He is also the author of many books on OnPrem and Cloud SAP solutions.
Hello Sven, thanks for joining this podcast. Can you tell us what is your current role actually?
Sven – Hello Luc, thank you for the very kind introduction. My current role: today I am at Adessa Group as a consultant for HR technology with a focus on SAP SuccessFactors and Qualtrics Employee Experience and as a Director for our office in Germany.
How do you feel that technology in HR has changed over the past decade?
Sven – Well, the last decade has certainly seen the breakthrough of Cloud technology in HR as the major change. It has initially been led by Workday, who were perfectly tuned for first-generation Cloud customers. Later on with many other players in the field, including SAP SuccessFactors today who cater also for customers who want some more of flexibility and integration. So that switch to the Cloud has certainly increased the speed of innovation and most notably just taking us from Solutions designed with primarily the HR department in mind, which is just a small part of the organisation, to a more extended focus on the whole workforce and on the Line Managers.
Another change that is now going into its second phase, is with solutions like Qualtrics for Employee Experience Management which are represented in all the discussions about HR technology these days. We even see this in SAP´s decision to rename their “HCM” suite into “HXM” suite which stands for “Human Experience management”. In my mind a little bit over-the-top, because it’s not only about Experience Management, but that´s at the top of the agenda these days. So maybe it’s fair enough from a marketing point of view to put the emphasis on that.
From your point of view, how has the transition from SAP HCM OnPrem to Cloud evolved in the past few years?
Sven – In the early years of this transition, most customers focused on the Talent Management modules, so they didn’t go into the core HR replacing their SAP HCM data with Employee Central. So, focusing on the Talent modules made it relatively easy, as there is not as much integration work to be done with the remaining on-premise infrastructure as you would have seen when you replace Core HR. Now more and more customers really focus on Core HR and usually go towards the SuccessFactors Employee Central solution (first). This bring up questions about what to do with Payroll, what to do with Time & Attendance and with the main challenge being Integration.
I see lessons being learned in paying attention to integration, but on the other hand there is also rising complexity of customers. So, it means it’s still not easy. The more complex the customer, the later they usually join the journey. So, even if you get better at doing this it’s still not a walk in the park. This also leads some customers to vendors who promise that data migration and integration is easy-peasy, but usually they find out that it’s not and even less so with vendors who underestimate it. That’s one of the big changes really that we come from relatively easy and not that usually integrated Talent modules to the real core of the HR solution.
Positive (element) is that companies really are more and more changing for the right reasons. So, not just to reduce cost or to tick a box, but really to support the digital transformation of the whole organisation with the HR solutions to empower employees and Line Managers to focus on Employee Experience and see it as a starting point for continuous innovation. So that’s in my mind the most positive change we have seen that organisations have learned from the past and understand that to manage this journey successfully they need to do it for the right reasons, for the right goals.
What is, in your opinion, the biggest challenge that companies face in their transition from SAP HCM to Cloud/SuccessFactors?
Sven – It’s certainly finding the right solution for their Payroll and Time & Attendance requirements. There is no Cloud solution available in the market, not even SuccessFactors that does everything you need in Payroll and makes it easy and everything you need in Time & Attendance. There are various options and it’s not easy to choose for a customer who´s usually doing this exercise for the first time. Then the other big challenge that actually comes with that, is to decide on their own transformation roadmap figuring out which legacy processes to stop, which ones to keep and which ones to change during their journey.
Can you give us 3 biggest lessons learned about the journey to the Cloud?
Sven – Yes, absolutely. I think the first thought I would like to emphasise, is that you have to be clear about your business goals. And with business goals I don’t mean “let’s use what we have and move it to the cloud, one by one”. That’s not a business goal, that’s a technical migration. Understanding as an organisation what you want to achieve and really define clearly the “what” but be really open about the “how” before the project. Be open how the solution can achieve your goals, rather than carve a process in stone that doesn’t work in the cloud, because you have to be flexible to adopt the best practice from the solution.
The second big lesson is, and likely everybody would tell you this one: don’t underestimate Integrations. So, evaluate properly what needs to be done then plan enough time.
And then the last lesson really is that there are many different Journeys to the Cloud and there’s no one-size-fits-all. We’ve seen customers going to the cloud with a talent module in a few weeks or even with a full SuccessFactors suite in a few months and for others it´s a much longer journey, because it comes with a big internal transformation exercise and also with technical challenges which brings us back to the earlier point about integrations which take time.
Why is Migration & Integration so important?
Sven – What I meant was this. Obviously you have a lot of data in your HR solution and if you’ve been running it for the last 20 years there’s probably an increase in complexity since those days in the 1990s when you moved it from an Excel sheet (or so). So it’s a complex set of data and whatever the new solution is that you are using it will have a different definition for your data, there will be different fields, different structures so migrating that data from the legacy solution to the Cloud solution will always be a challenge and because everything is eventually built on that data it’s important that you get it right.
The second part is Integration that is actually tightly connected to the migration, because it’s basically going in the other direction, the same process, but the other direction. Very few companies will move their whole HR System to the cloud in one day. There will be various milestones where you go live with one module after the other, often Payroll is left out for the time being.
Then it’s important that your new HR Cloud Solution is actually talking to what you still leave on-premise, particularly the Payroll, because that’s the one thing that always needs to work. Because of the different data structures and organisational structures, you will have in the two solutions, it can be a challenging exercise and that’s where you need to plan time for.
I would characterise a successful migration/integration project quite simply.
First, it needs to have no or little disruption of your ongoing process, that’s the obvious one. And second, it should also set the organisation free for future Innovation. So, whatever you define in your integration shouldn’t hold you back, it shouldn’t limit your options, to the future. And I think that´s something that can easily be overlooked in the heat of the moment, when all that is wanted is to achieve a go live on a certain day with no disruption.
What advice would you give to existing SAP HCM customers that haven’t moved to Cloud yet?
Sven – Okay. So my first thought for SAP HCM customers who haven´t started their Cloud journey yet, who still have everything on-premise, is that those customers are for some reason probably more reluctant than average to move to the cloud. They probably have issues with some of the typical Cloud constraints, because we don’t get this hyper flexibility where they can change everything and anything as they could in their SAP HCM on-premise solution, or they see challenges in integrations with other on-premise solutions. So, they are probably a bit more complex or have higher expectations than those customers who have started their journey already.
Therefore, there are actually two things I would recommend to them. First, to really look closely where they can be leaner, do they really have to have the freedom to change every line of coding to make everything in this system very bespoke or would they actually be able to benefit from some of the good practices that are embedded in the Cloud solution.
And then coming from the other side, basically whatever they do, they should not use technology as a change enforcer by using a software or an implementation approach that simplifies processes by force. We have seen that in the past that an organisation that had an extremely bespoke system said, “let’s buy something very simple where we can´t make it bespoke at all and then that system will force us to be lean”. That usually ends in adoption disaster Arrive in Style from Phoenix, AZ. So even if they go live with the solution, it’s usually very poorly adopted by the user. So, they have to acknowledge the culture they have and that it’s probably a bit of a longer journey to get to a new generation of Technology, but also go through some organisational and cultural transformation.
Luc – Thanks a lot, Sven
For people who are interested to read more about this topic, or want to read more about the insights and perspectives that Sven has on migration from HCM to Cloud, I will refer them to the many blogs that he has written which you can find on http://www.adessagroup.com/news-blogs/.
Thank you all for joining and thanks all for being with us on this podcast. Stay tuned and bye for now.
This was Luc Bossaert from Adessa Group.
Connect on LinkedIn to stay up to date on the latest HR trends, tips and best practices!