Taking over employees of the purchased company and HR systems

Let’s take a look at popular HR service scenarios after the acquisition of the company:

• Scenario 1: Including employees of the new company in the working SAP HR system. This scenario is relatively easy to implement as it usually does not require major configuration changes. Data migration is key, but it is a well-tested process by partners and customers, and does not pose much risk.
• Scenario 2: Integration of two HR systems (SAP and non-SAP). The capital group wants to have a coherent HR reporting system, but does not decide to include the employees of the new company in its SAP HR system. This is quite a breakneck scenario, because it requires building and maintaining mechanisms to power the reporting system. Doubtful benefits and high costs of such a solution should place it among the less preferred options.
• Scenario 3: Roll-out of the current SAP HR solution to the acquired company together with its extension with functionalities needed to handle specific processes in the new organization. Let’s imagine that a company with a production profile takes over a company specializing in retail sales (a chain of stores). A priority process for the new company that requires automation is time scheduling. So, in addition to including employees in HR and payroll in the current SAP HR system, there is a need to implement an application to support store managers in managing salespeople’s time. With this project, there is a chance to automate working time management also in selected units of the capital group.
• Scenario 4: The first step toward the cloud. Capital Group wants to migrate its old SAP HR solutions to SuccessFactors in the near future. Acquiring a new company is an opportunity to run SF now on a smaller scale, just for the acquired organization or on a smaller scale for all companies. SAP offers two main variants here: side-by-side and core-hybrid. Both are well supported by the vendor, so the risks associated with integrating different solutions are easily manageable.

Towards the cloud

The last two scenarios (automation of a key process and a move to the cloud) add value and can bring tangible benefits in the long run. Particularly interesting, in the context of changes in the SAP offer, is the cloud option (side-by-side or core-hybrid).

The side-by-side variant is based on a different approach, depending on the branch or company belonging to the capital group. For example, in the headquarters, the SAP HR system is used as the leading system, and talent management is carried out in SuccessFactors, while in the acquired companies SF Employee Central is the master system. Wages can be settled in an on-premise system or other local application, depending on the company. This variant is quite popular during the merger or digitization of HR processes of individual companies in the group. In small steps, the corporation can migrate to the cloud. In a side-by-side variant, SF Employee Central can be a consolidating system and at the same time the master system for selected branches.

For those branches for which the master system is SAP ERP HR, the data is replicated to SF EC. This is a relatively complex configuration option due to the frequent lack of alignment of processes and data within the group (e.g., different value lists and processes).

In a side-by-side scenario, observing the adoption process of the SuccessFactors solution by employees of the new company will allow the entire organization to be well prepared for the migration to the cloud.

The core-hybrid option changes a lot in handling HR processes. The employee is not hired in SAP ERP HR, but in SuccessFactors. In the on-premise system, payroll (and possibly the implemented time assessment) is counted, but to make this possible, most of the data is automatically replicated from SF to the appropriate HR infotypes. Only data specific to the payroll portion (e.g., IT0413, IT0515) is stored in the payroll system. Many core-hybrid projects, according to the producer, are expected to lead to a complete migration to the cloud in the long run. The core-hybrid architecture is an interim state, giving customers time to prepare their payroll migration to SF EC Payroll.

Choosing an HR scenario for a corporate merger process is not easy. Questions worth answering include:

• How different is the acquired company from ours? Will integrating it into our system go smoothly?
• Is the merger an opportunity to take the first step to the cloud? The support times for old SAP HR solutions are coming to an end and it may be worthwhile to start migrating now.
• Is the necessity to automate an important HR process in the acquired company not a chance to look at the same process from a different perspective?
• What will be the costs of maintaining two different HR systems with interfaces?