An Independent SAP Payroll and HCM Software Review
A great deal of news has come out this past year about SAP. From the purchase of SuccessFactors to new enhancements to this industry giant’s on-premise solution. Our focus for this review is on that on-premise solution, but before reviewing the specific functionalities of the system, certain elements need to be explained. To begin with, it became clear early on in our review that SAP’s deployment options were somewhat confusing. Sparing inconsequential details, what we want to make clear here is that our review is for SAP’s legacy/client-server system. Yes, the company has made some serious progress with respect to cloud build-out, but that is not our focus for this analysis. That’s not to say that the system can’t be hosted (it can be by either SAP or a partner solution in a remote data center), but that does not make it Software-as-a-Service (SaaS) like solutions such as Workday. Because of this, a subscription pricing model cannot be followed and licenses must be purchased, annual maintenance fees must be paid, upgrades must still be handled by the customer, and data center management costs will be assessed. Whether SAP continues this model in perpetuity is yet to be seen given the efforts they’ve made towards SaaS, but for now the company still deploys this software in this manner.
As for our review, we discovered that SAP’s Payroll and HR software functionality is sub-divided into 4 broad categories: Core HR and Payroll, Service Delivery, Talent Management, and Workforce Analytics. Here, we review those in greater detail.
Core Human Resource and Payroll Software
SAP's Core Payroll and HR software provides the following key functionality:
The payroll engine is a multinational solution that integrates directly with the HR software from SAP – allowing users to enter HR information that becomes immediately available to the payroll program for gross-to-net calculations. The payroll software can be integrated with SAP ERP Financials as well, which facilitates the efficient transfer of payroll results for the general ledger, controlling and bank transfer activities, and other operational purposes. SAP’s payroll offering carries with it the functionalities of a payroll area (in which employees can be grouped depending on pay date frequency); a period modifier (which segments out periods with the same frequency but different dates); a payroll calendar (which generates cumulating wage type calendars—allowing for month, quarter, and annual sum totals); wage types (payment/deduction coding); and pay scale types, areas, groups, and levels (which respectively aids in the segregation, differentiation, and subdivision of pay scales based on pre-defined criteria).
Further Core HR functionality includes:
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