SAP HCM 2022: Understanding its Role in a SuccessFactors World

SAP’s Human Capital Management (HCM) offerings have evolved significantly over recent years. In 2022, SAP HCM for S/4HANA was introduced as an option alongside their industry-leading cloud-based solution, SAP SuccessFactors. This begs the question: Where does the traditional on-premise SAP HCM fit in the modern HR landscape?

Key Points about SAP HCM for S/4HANA

• Continuity, not Revolution: SAP HCM for S/4HANA is a relatively new product. It carries forward the core functionality of SAP ERP HCM while being optimized to run within the S/4HANA architecture.
• A Bridge for Existing Customers: This solution primarily serves organizations heavily invested in on-premise SAP ERP that must transition to S/4HANA. It offers a way to maintain essential HR processes without immediate large-scale migration to the cloud.
• Focused Investment: SAP has clarified that major HCM innovations will primarily happen within SAP SuccessFactors. SAP HCM for S/4HANA will likely receive legal compliance and integration enhancements updates, but we don’t expect groundbreaking new features.

Should You Consider SAP HCM for S/4HANA?

Consider SAP HCM 2022 if:

• You’re on SAP ERP and Migrating to S/4HANA: In this case, it’s the logical path to stay within the SAP ecosystem while modernizing your infrastructure.
• Cloud Readiness Isn’t Immediate: Due to strict data regulations, organizational complexity, or other factors, you will need a solution within the on-premise landscape for the foreseeable future.
• Deeply Customized SAP HCM: Your existing SAP HCM has heavy customizations that would be difficult to replicate in a cloud environment.

Why SuccessFactors Remains the Strategic Choice

While SAP HCM for S/4HANA fills a specific niche, SAP SuccessFactors remains SAP’s flagship HCM solution. Here’s why:

• Innovation Hub: SuccessFactors is developing new AI-powered tools, enhanced analytics, and modern user experiences.
• Comprehensive Talent Management: SuccessFactors provides a broader range of modules covering the entire employee lifecycle, from recruiting and onboarding to performance, learning, succession planning, and more.
• Cloud Advantages: SuccessFactors offers the scalability, regular updates, and flexibility inherent to cloud-based solutions.

The Takeaway

SAP HCM for S/4HANA serves a pragmatic purpose. It provides a transition pathway for companies moving from SAP ERP to S/4HANA, requiring continued on-premise solutions. However, if your organization is ready to embrace the cloud and maximize the latest HR technology advancements, SAP SuccessFactors is the clear strategic direction.