Cloud Human Capital Management from SAP: 2012

Hybrid computing in HR: It’s here!

Hybrid products are getting a lot of attention, and rightfully so. Hybrid foods make nutritious, inexpensive meals to available to the world’s impoverished children. Hybrid cars reduce fuel consumption and are transforming the entire driving experience. And hybrid computing, the combination of cloud and on-premise deployments, is enabling a global, mobile workforce to meet the demands of millions of new consumers, who increasingly want everything personalized, and now.

In this article I will discuss hybrid computing as it applies to HR, and how an on-premise foundation can support cloud talent management and analytics.

The silver lining

Today, much of the value that can be derived from an HR system derives from strategic talent management and analytics. Those activities allow HR departments to hire, grow and retain talent in their organizations, as well as to make optimal decisions related to the workforce. Strategic talent management and analytics are the key activities needed to adapt quickly to new business and market requirements, increase workforce efficiency, motivate employees and increase their engagement. They also provide greater control over HR-related costs.

I strongly believe that the combination of the cloud solution acquired from SuccessFactors on top of the foundation of a core HR system is the quickest and safest way to achieve these benefits. Why? Because core HR is only a foundation. Tearing it out and replacing it even though it works perfectly well could be a feasible choice for companies with a deliberate cloud strategy. But it is completely possible to expand on top of that foundation and realize the benefits of strategic talent management and analytics on top of an on-premise solution.

Before I discuss how, I want to make it clear that it is SAP’s commitment to continue investing heavily in Core HR on-premise, that is, the foundations, in order to protect customers’ investments.

Fusion, not fission

The space of enterprise computing for HR can be seen as being composed of two worlds. At the base, we have the on-premise world, composed of on-premise talent management and on-premise core HR. At the heights, we have the full-cloud world composed of cloud talent management and cloud core HR. Each of the two worlds has strong advantages. Cloud deployment is usually easier and cheaper, and the user experience is usually superior. However, on-premise solutions are better established, functionally more complete, especially for such core components as payroll or organization management. Hybrids combine the best of both worlds to allow customers to build on their foundations and deploy the processes that are really going to make a difference: strategic talent management and strategic analytics.

SAP delivers a fully maintained integration allowing customers to build strategic talent management and strategic analytics on a foundational core HR. Customers are able to leverage the foundations they built over years: payroll, time and attendance, organization structure, employee databases, as well as the portal applications employees are accustomed to using. Employees can quickly and efficiently deploy performance management, succession planning, learning, recruiting and social components on top of these foundations. It is ready to use, functionally complete, and robust, completely supporting the SAP’s talent management suite

Putting the Success of SuccessFactors to work for all users

For customers not yet having a deliberate cloud strategy, hybrids allow them to achieve significant benefits. First and foremost, hybrids allow businesses to leverage previous investments in the foundations of a core HR system, helping achieve fast time to value. Additionally, most innovation today is centered on strategic talent management and decision making. Hybrids allow customers to quickly deploy the cloud applications enabling strategic talent management and analytics. It is the fastest way of absorbing innovation. SuccessFactors delivers innovation in four releases per year.

The configuration concept is an essential advantage of the cloud. There is no need for hardware and local delivery architecture. Instead, customers simply subscribe and have their company configurations loaded. On average, subscription customers have their configurations up and running in less than 90 days. As innovation is delivered, customers can immediately leverage new developments by opting in for the new configuration, but is not required. Customers may leverage most recent developments when then are ready.

The SuccessFactors BizX suite architecture avoids customizations leading to inefficient performance or upgrade blocks, but is open and flexible to configure customer needs. This proof configuration concept saves money by preventing costly mistakes at the outset.

Security is rightfully a top-of mind concern for all businesses. SAP will process one of the most sensitive data assets of a company: employee data. In fact SAP implemented the highest and most recent security standards and leads the industry. The customer‘s data security officer can rely on SuccessFactors security guarantee and audit it at any time.

Last but not least, no local administration capabilities are needed. SuccessFactors Operations ensures delivery upon Service Level Agreements (SLA) in a 24x7x365 follow the sun operations model. Even the integration to local applications or other providers is based on Cloud Standards: the SAP Cloud Integrator, which is a cloud version of SAP Process Integrator.

You’ll never walk alone

It is important to note that hybrids are not new. They have been around since the cloud started to gain traction in the years 2005 to 2007. Hundreds of customers have been successfully running hybrids in the past, as can be seen in the list of references. But in the past, customers were very much on their own. They had to interface their cloud applications to the back end by themselves, and maintain those interfaces as soon as one side or the other would evolve functionally. Those interfaces were also often based on flat file uploads, making them slow, prone to error, and not very user friendly, so much so that users often had the feeling that the processes above would break in the middle due to a lack of more advanced integration.

SAP is committed to delivering a productized integration, which differs from an interface in that an integration is standard and maintained. It is SAP’s commitment that the two sides, cloud and on-premise, will interact optimally. It is also SAP’s commitment that this integration will be maintained and will therefore survive any functional changes on one side or the other.

Data integration

The integration is delivered in three buckets. The first deals with data integration. It is the very basis of an integration, assuring that a field in the on-premise world is mapped to the correspondingly correct field in the cloud world, and that synchronization is done fast and smoothly, in particular allowing for delta uploads.

Process integration

The second bucket deals with process integration. It is already beneficial that data fields are mapped, but it is not enough. Users must not have the feeling that a process they started will stop in the middle, requiring them to retype information they already entered, or sign on again because there is a hand-over from the on-premise world to the cloud world. Processes like performance management would typically start in a manager portal environment and quickly branch out to a performance management application. They start on-premise and continue on the cloud. To the user it must not matter. On the other hand, processes such as hiring typically originate in a recruiting system and have to continue in the ERP, for example to send requisitions. Again it must not matter to the user. Processes must flow smoothly, and it must be transparent to the user whenever there is a hand-over between systems.

User experience

The third bucket deals with user experience. Having synchronized data models and seamless processes is of course fundamental. But users going from one window to the other must not have the impression they are changing environments. Colors, fonts, and the way components are being displayed in a portal environment must look coherent, consistent and visually appealing. It is SAP’s commitment that hybrids processes will take place in portalized applications that encapsulate cloud components in a manner totally transparent to the user.

SAP delivers integrated content for many processes, and the platform to extend that content with additional integration points relevant for customers’ industries or regions. The integration is delivered as add-ons, in parallel with the normal enhancement package cycle. The release of these add-ons is synchronized with the established release cycle of SuccessFactors. The vehicle to deploy the add-ons is a rapid deployment solution (RDS), ensuring a fixed scope and duration while providing the peace of mind for a successful implementation.

Four packages delivered to your door

The roadmap for the integration follows a package cycle. Only the first four packages are listed here. The first package (Package 1) was released in May 2012 and was generally available September 1, 2012. The package handled flat file upload of information, and contained 25 extractors from the on-premise world applied to the cloud workforce planning and analytics solution. The second package (Package 2) is a technical package with a configuration guide as well as elements of single sign-on.

The third package (Package 3), due for release Q4 of 2012, is the first process-integration package on top of the cloud integrator middleware. It is focused on performance management, and will also contain the first delta handling capability.

The fourth package (Package 4) is centered on the integrated hiring process. It is also a step in the direction of a fully portalized version of the hybrid model. It is important to note that the SAP portal is the expected single access point to all processes partof the hybrid models.

The remainder of this section contains detailed explanations of all deliveries except Package 2.

What’s inside the boxes?

Let’s talk about Package 1 in more detail. As mentioned, it was designed to ensure proper data mapping between the different solutions. It supports employee and organizational data upload via .csv files containing basic employee and organization management data. The integration direction is from on-premise HCM to the cloud talent management. In other words, on-premise is the master and the cloud solution is the slave.

Package 1 is based on best practice field mapping for 29 standard fields, and allows for 15 custom fields in addition. It ensures basic flexibility as well as employee selections-not all employees need to be loaded.

For each selected employee (PERNR) the report selects the central person (CP) and checks if this employee has multiple active contracts (the PERNRs are sorted by CP). In case the employee has multiple active contracts a main contract must be specified, because the integration with SuccessFactors allows only one contract (on PERNR) to be transferred. For employees with multiple active contracts it is highly recommended to specify the main contract. For those employees whose Infotype 0712 is not maintained, the report selects one PERNR

The first package also brings 35 analytics reports into the standard.

The prerequisite and technical landscapes to install the first packages add-on are the following:

Integration add-on 1.0 for SAP ERP Human Capital Management and SuccessFactors Business Execution
Admin Guide www.service.sap.com/instguides -> SAP Business Suite Applications -> SAP ERP Add-Ons -> Integration add-on for SAP ERP HCM and SuccessFactors BizX
Minimum pre-requisite: ERP 6.0 SPS15+ EA-HR SP38
Other ERP versions

ERP 6.0 EhP2 SPS05 or above (SPS05 comprises SP17 for EA-HR 602)
ERP 6.0 EhP3 SPS04 or above (SPS04 comprises SP12 for EA-HR 603)
ERP 6.0 EhP4 SPS02 or above (SPS02 comprises SP105 for EA-HR 604)
ERP 6.0 EhP4 with SAP NetWeaver 7.01 SPS02 or above (SPS02 comprises SP05 for EA-HR 604)
ERP 6.0 EhP5 SPS03 or above (SPS03 comprises SP05 for EA-HR 605)
ERP 6.0 EhP6 SPS01 or above (SPS01 comprises SP01 for EA-HR 606)

The cornerstone of the integration is the SAP Cloud Integration technology, which ensures that there is proper master data, integration is taking place in real time carrying over information from one part of the house to the other, and that all of this is done with the right level of security. It is also the tool that allows users to monitor how processes run, detect bottlenecks, and support resolution. Cloud integration handles communication inside any landscape, no matter how complex and heterogeneous.

Historically, customers dealing with hybrid landscapes had to use several ad-hoc techniques, from web services to flat file uploads. The value of the SAP Cloud Integrator is its capability to simplify and harmonize the integration. It is also allows a content-based integration. Because the middle layer is standard, SAP, partners and customers develop content only. The content is then loaded on the Cloud Integrator.

SAP Cloud Integration is the heir to SAP NetWeaver Process Integration (SAP PI), SAP's traditional enterprise application integration software, ans component of the NetWeaver product group used to facilitate the exchange of information among a company's internal software and systems and those of external parties. Before the current version, SAP PI was called SAP Exchange Infrastructure (SAP XI). Like other NetWeaver components, SAP PI is compatible with software products of other companies.

SAP Cloud Integration technology offers the standard capabilities of an integration broker, mediating between entities with varying requirements in terms of connectivity, format, and protocols. But is also reduces the TCO of a standard middleware integration by providing a common repository for interfaces with standard cloud capabilities, particularly multitenancy and configuration-based deployment.

Package 3 is the first package delivered with content built on top of the Cloud Integrator. Package 3 focuses on standard integration between SAP ERP HCM and SuccessFactors Compensation Management, and offers flexible data extraction and configuration based data determination based on delta handling to transfer only data changed in SAP ERP HCM. This also allows handling of multiple HR systems scenario support.

Package 4 is focused on hiring, and will also provide a portalized solution where the different functions for the different processes are decomposed and exposed as portal elements.