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What's the difference between SAP HCM & Successfactors | MDSap

MDS AP May 20, 2021

sap hcm vs successfactorsThe most important asset of every business is its employees, and developing, engaging and retaining employees in a highly competitive market is becoming a critical success factor. With a host of Human Resource Management platforms available on the market, how do you know which one is best suited to your needs?

On the heels of digital transformation has come a push towards cloud-based solutions, however, many large corporations still rely on on-premise solutions due to the complex customizations they require for their unique business operations. Migrating from on-premise to the cloud is also a daunting prospect for many people without the technological expertise to pull it off successfully. Therefore, SAP still supports both on-premise and cloud-based HR solutions: SAP HCM (Human Capital Management) and SAP SuccessFactors HXM. But what’s the difference between the two?

 

KEY DIFFERENCES BETWEEN SAP HCM AND SAP SUCCESSFACTORS

 

SAP SuccessFactors is a cloud-based SaaS (Software as a Service) platform, while SAP HCM is SAP’s original on-premise HR solution. Essentially, both solutions solve the same Business problem: Human Resource Management. However, SuccessFactors and HCM are built on completely different technologies and have a lot of differences when compared on a granular level.

SAP Human Capital Management (SAP HCM) is one of the key modules in SAP and is also called SAP Human Resource (HR) or SAP Human Resource Management System (SAP HRMS). These terms essentially refer to the same on-premise Software/System(s)/Suite provided by SAP.

SuccessFactors is part of the newly branded SAP HXM (Human Experience Management) suite and operates in the cloud to provide a comprehensive solution for various HR processes

Both solutions are available from SAP, although they have announced that support for SAP HCM will stop in 2040, as the focus shifts to more HXM/Cloud-based solutions.

Let’s have a look at each solution in more detail.

 

SAP HUMAN CAPITAL MANAGEMENT

 

SAP HCM  is one of the most flexible on-premise software platforms for HR processes widely used across industries. As the successor to SAP HR, it contains all functions that are relevant for personnel administration, payroll, applicant management, and personnel development. In addition, SAP HCM links personnel and personnel management with multi-level application and approval processes.

In addition, the system is closely linked to the organizational structure, whereby hierarchy-dependent processes can be automated. Adaptation to company-specific conditions is possible by integrating numerous submodules.

There are various modules in SAP HCM for different processes:

Organizational Management: Organizational Management is used to map the entire enterprise structure according to its organizational units. The module also supports the analysis of process organization and personnel analyses for personnel planning and forms the basis for functions such as career planning and applicant management.

Personnel Administration: This is the central point or personnel master record, which exists for each employee. This digital employee master data replaces paper-based procedures and ensures that all personnel data is always available in up-to-date form. In addition to general employee master data such as personnel number, name, and address, information such as organizational unit (department), pay scale and pay scale group is stored. Each of these entries is assigned a validity period, which creates a history over time.

Personnel Time Management: This module assists in the processes of planning, recording and evaluating employee performance according to recorded working times. SAP HCM supports classic workflows in personnel time management - for example, requests for flex days, supplements and corrections, as well as attendance management, calculation of wages, and log-in and log-out reports.

Payroll Accounting: Master data such as salary groups as well as working hours, various absence times, flexible salary components and special payments are included in this module. With regular updates, payroll accounting remains compliant with legal requirements. Additional security is provided by simulation runs, which can be carried out before the actual payroll run to ensure that errors can be corrected in advance.

Talent Management: The main task of talent management is to compare open positions with existing human resources. This is done on the basis of defined criteria such as qualifications and personal interests. At the same time, these functionalities allow individual career and development plans for employees to be mapped in the system together with the associated target agreements.

Recruitment: Numerous functions such as scheduling job interviews or application deadlines can be created automatically and tracked in a clear manner. The entire hiring process can be individually mapped.

ESS and MSS: Employee Self-Service (ESS) helps employees to individually track their data in an organization. Management Self-Service (MSS) allows managers to create and maintain the data of employees.

SAP HCM provides important support in two ways. It enables the optimisation and digitalisation of personnel processes, and it contains numerous tools that are important from a personnel strategic point of view.

The simplification and streamlining of administrative processes are achieved among other things by the following HCM features:

  • Digital vacation request (e.g. via web browser) incl. approval workflow
  • Central, system-supported maintenance of all relevant personnel master data
  • Consistent data records and traceable changes (history)
  • Complete data transparency
  • Partial automation of payroll accounting
  • Simplified time-recording (corrections also possible in self-service)
  • Integration with other SAP modules such as FI/CO

The introduction of SAP HCM is also supported by the strategic components of the system, including:

  • Tools for effective and individual employee development
  • Comprehensive talent management
  • Support of modern channels in recruiting
  • Support of onboarding processes (induction)

SAP HCM does not have to be introduced with its complete range of functions. Many companies only start with the most important main modules such as personnel administration, payroll accounting and organizational management. In the course of time, further modules that are particularly relevant for the company can be added.

 

SAP SUCCESSFACTORS HXM

 

SAP SuccessFactors is a market-leading application that delivers a complete set of talent management solutions, plus robust workforce analytics and planning with a next-generation core HR solution that improves executive insight and decision making.

At its core, the SAP SuccessFactors HXM Suite is a global, cloud-based human resource management software system, but it is evolving to help people and businesses thrive in the experience economy.

The suite is organised into four categories:

  • Employee Experience Management: Provides solutions for employee engagement, lifecycle feedback, staff survey analysis, and benefits package optimisation.
  • Core HR and Payroll: Provides global HRIS as well as software for payroll, admin, time and attendance, HR help desk, and more.
  • Talent Management: Provides tools for recruiting, onboarding, performance management, compensation, learning, and succession and development.
  • HR Analytics and Workforce Planning: Provides powerful, embedded HR analytics and reporting tools for strategic HR planning.

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 has massively enhanced its functionality since then.

SuccessFactors is now a complete HCM solution from the cloud. It contains all the functions from the classic SAP HCM, and some new features, including:

  • (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, the 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)
  • 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); the basis for integration with an 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

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