Bimodal HCM

Which term is preferred at Treorbis, HR or HCM? Both Rainer Brand and André Schulte choose Human Capital Management.

"It's all about managing the human resources context."

explains André Schulte.

Human Capital Management (HCM) remains a separate entity in the ERP landscape. In the past, the SAP R/3 HR module was often customized on its own hardware and managed separately from the ERP and IT systems.

For Rainer Brand, this autonomy and compartmentalization still exists for HR:

"Yes, and it's being driven further by development on SAP's part through the S/4 Hana strategy."

Thus, the importance and position of HCM has remained the same over many years. The technical possibilities, on the other hand, have grown. Self-service is a matter of course, and talent management from the cloud is an interesting alternative.

The HR manager is faced with a heterogeneous solution landscape and a bimodal HCM. The HCM manager must take responsibility for different directions and speeds. The opposites must be balanced and a digital transformation must be designed together with the CFO, CIO and CDO.

Whereas in the past it was often a technical challenge when HR servers were too weak for month-end closing and roll-up, today it is a matter of mastering business, organizational, technical and legal aspects with security and usability.

On premise or cloud computing? Abap modifications in Z-space, add-ons or SuccessFactors? Today, a HR manager must be intensively involved in this discussion and not leave the topics to his C-colleagues (Chief Financial, Information or Digital Officer).

What is Treorbis' experience. Does a human resources manager get intensively involved in the IT process?

"Yes, absolutely"

says Rainer Brand, and his colleague André Schulte adds:

"In the future, the HR manager's job will be unthinkable without IT support."

Globalization

The reasons for this are the global networking of systems, the spread and use of social media and, of course, the Internet as the hub of all things. The many challenges are changing the role model and the position of the HCM manager vis-à-vis his CIO.

"In the past, it was more the relationship of an IT supplier and its user"

explains André Schulte. In the present and future, Rainer Brand sees the HCM manager as a partner on a par with the CIO and CDO, actively driving forward topics such as succession, talent, recruiting and proactive reporting.

So the current question is: How much IT knowledge should an HCM manager have? "He should have knowledge of the technological possibilities," says Rainer Brand, and André Schulte says:

"Process know-how and the ability to abstract to represent one's processes are absolute prerequisites."

An important approach to digital transformation is a determination of what will drive HCM. Rainer Brand and André Schulte from Treorbis include the following parameters among the drivers:

Cost pressure in companies and the need to increase efficiency. The separation of value-adding activities and routine activities is also called for. And as already indicated, the technological options must be evaluated - on premise as well as the various cloud models.

Organizationally, many existing SAP customers are confronted with the issue of globalization and the relocation of production to nearshore countries, which ultimately implies excellent, worldwide communication.

There is hardly an IT sector that is not affected by globalization. With the many national legislations in social and human resources - how far can HCM be globalized? "Global master data and global KPI reporting can be established, whereby a standardization of terminology is a mandatory prerequisite," cautions Rainer Brand, and André Schulte adds:

"Processes like talent and recruiting lend themselves to globalization. Payroll services can be globalized - but the technical mapping and execution cannot be globalized and must be done in national jurisdictions."

One answer for HCM globalization is the oneHCM service portfolio from Treorbis.

"In a recent project, we are setting up centralized master data maintenance and globalized processes for talent management and recruiting using SuccessFactors. We are connecting these global components with our partners' decentralized payroll applications worldwide."

is how Rainer Brand describes one of the many reference projects.

New roles

What are the overarching challenges for the HCM manager? André Schulte points to the changes in his role within the company, and Rainer Brand says that ultimately it will be a realignment of the qualifications of HR administrators.

From the past, there are many different areas of responsibility in HCM and thus the work is performed by different teams. But André Schulte thinks:

"The boundaries are going to dissolve more and more in the future as overall processes come to the fore. As Treorbis, we cover both areas, payroll - the bread-and-butter business - modern functions are coming in, systems and processes are growing together."

The transformation process has thus fully begun in HCM.

"HCM is evolving into a business partner for corporate management"

explains Rainer Brand. The trends are outsourcing of standard processes to partners and restructuring of personnel areas and outsourcing of simple work to partners.

For Brand, this means upgrading clerks to highly qualified specialists: advising on processes, identifying recruiting needs, retaining and supporting employees by taking an active role, and acting as a partner to managers.

Hana & HCM

In addition to organizational and business aspects, technology is also a determining parameter.

"Because of technological advances, all stakeholders need to be at the table very early on"

André Schulte knows from his professional experience.

"For us in Germany, however, it's not just HR and IT, but also co-determination that needs to be taken into account"

adds Rainer Brand.

How far is HCM development influenced by disruptive technologies such as SAP Hana, asked E-3 Editor-in-Chief Peter M. Färbinger.

"There is no displacement taking place, but rather an addition and expansion of opportunities"

notes André Schulte.

From Treorbis' point of view, a gap is being closed between on demand and on premise. According to Rainer Brand, one keyword here is the Hana Cloud Platform (HCP).

"SAP Hana will not displace HR, it will enhance and complement it, there are numerous opportunities to bridge the gap from on premise to cloud computing"

he adds.

SAP has started to build a new ERP system with S/4 Finance and Logistics: Will there also be an S/4 HCM? Brand and Schulte say that, according to SAP, nothing is currently being actively planned. But they definitely deny that the complete HCM functionality will be moved to cloud computing.

"For us, hybrid cloud landscapes are here to stay for the next five to ten years"

says André Schulte.

"In the D-A-CH countries in particular, we see hurdles in the area of payroll and time management. As far as we can see, SAP has not yet come up with a market-ready solution.

At Treorbis, they see clear acceptance for SuccessFactors in Europe, but, says André Schulte, "the competition in the form of Workday will also get a share of the market. In Germany, on the other hand, we primarily see demand for SuccessFactors."

However, it is known that companies controlled from abroad bring Workday applications to Germany.

"This creates challenges in developing efficient interfaces"

explains Rainer Brand.

At Treorbis, the company is looking forward to this transformation calmly, because "SuccessFactors is part of our oneHCM solution portfolio"explains Brand. Treorbis has a SuccessFactors consulting team that will be further expanded in the future. And Treorbis has a high level of interface expertise for hybrid solutions.

Cloud computing

"Cloud computing is used and accepted for global harmonization of processes"

knows Rainer Brand.

Abroad, the Payroll Cloud is used, in the D-A-CH area Payroll is used on premise and Treorbis is developing hybrid models for this.

"Treorbis has been familiar with cloud-based processes for years"

confirms André Schulte.

"We deploy these across the oneHCM service portfolio through our partners - Cloudpay, Celergo, Mobile Expense, etc."

SuccessFactors will be used to fill the strategic functions in the cloud in the future. Treorbis very clearly sees a focus in the company's development in cloud computing.

Digital transformation

Thus, there is a need to catch up in the HCM scene: Outdated processes running on premise need to be revised. Add-ons and Abap modifications must be evaluated for an upcoming SAP release change.

In a future S/4 system, numerous Abap tables will have been eliminated. The lean system is faster and more efficient, but the legacy tables must be eliminated.

"And opportunities that arise from digitization must be exploited"

emphasize André Schulte and Rainer Brand emphatically.

A separate point is cloud computing, where there is perhaps the greatest need to catch up:

"Cloud applications must be used where they make sense"

emphasizes André Schulte.

This results in numerous future tasks for HCM, where the conversation with Treorbis can help any existing SAP customer:

"Future tasks will be derived from the new role"

says Rainer Brand.

"Here we can point to many successful projects with our customers."

The task is to free the HCM business partner from administrative tasks. Here, Treorbis provides support and assumes responsibility for the following tasks: firstly, Treorbis has gained experience with globally operating companies for years and can pass this on to the customers; secondly, they are currently dealing with requests for the harmonization of worldwide HR processes involving branches in Malaysia and Thailand - globalization is one of Treorbis' core competencies.

This results very naturally in tasks and areas on which Treorbis will focus: Cloud computing with SuccessFactors and Workforce; and hybrid landscapes and the associated interfaces (synchronous and asynchronous).

"For Treorbis, however, SAP HCM remains the important bread-and-butter business"

explain Brand and Schulte.

In addition, Hana will of course also be at the center of future strategies:

"We have already addressed this issue with our technology team. In addition to a Hana demo environment that has just been activated, a number of employees are currently being prepared for the new technological challenges."

reports Rainer Brand.

Are the topics HEC, Hana Enterprise Cloud, and HCP, Hana Cloud Platform, also becoming relevant for HCM?

"Clearly yes"

answers André Schulte. And Rainer Brand explains:

"Currently, HCP is the focus of our analyses. We are analyzing the possibilities of the new environment."

However, Hana is more than just a database in the SAP ecosystem. With the framework SAP Hana PAL, Predictive Analysis Library, the Hana platform offers numerous statistical and mathematical possibilities - including specific HR development.

Will Treorbis get involved here with Hana in-house developments, we asked in conclusion:

"We certainly see opportunities here for HR as well."

André Schulte is convinced, and his colleague Rainer Brand explains:

"Currently, we are investing in implementing demographic simulation models that take into account complex influencing variables."

The bimodal HCM is a reality: The task is to shape the future in an agile manner and to securely preserve what has been achieved.