Do you feel the same way? Between all the abbreviations, you sometimes feel like you're living in the middle of a Fantastischen 4 song. There is much more to the abbreviations mentioned than a simple MFG – at this point we can reveal that MFG means “With kind regards”. You will understand all other abbreviations once you have finished reading this article.
We will briefly and concisely explain the various terms and give you an overview of the existing SAP software solutions for the HR area. We also show you how to find the optimal solution for your company.
Challenges of an HR department
As a result of digitalization and changes in the world of work, companies are faced with new challenges in human resources management. The requirements for a modern HR department are diverse and complex: from attracting and retaining qualified employees to promoting diversity and inclusion. At the same time, it is important to keep an overview of the legal framework and to design processes efficiently.
The classic, purely administrative human resources work has evolved into a strategic partner that contributes significantly to corporate development and shapes the corporate culture.
Against this background, the importance of IT solutions is increasing. Selecting the right software is crucial in order to make the best possible use of the potential of digitalization and to successfully face the challenges mentioned above.
SAP software solutions for the HR area
SAP offers numerous options, including classic on-premise products as well as modern cloud solutions. You have probably come across terms such as HCM, HXM, H4S4 or SF in this context. However, with the multitude of terms and possibilities that lie behind them, it is not always easy to keep track and find the optimal solution for your company-specific requirements.
A first important step is to know and be able to classify the different options. To do this, we will first briefly and understandably explain the different SAP software solutions for the HR area.
SAP ERP Human Capital Management (SAP HCM)
SAP HCM is a module of SAP ERP (Enterprise Resource Planning) and represents a proven and comprehensive on-premise software solution for human resources management. On-premise means that the software is installed and maintained on your company's own servers and data centers becomes. For the classic on-premise solution SAP ERP HCM, maintenance ends in 2027 – as part of extended maintenance in 2030 at the latest. If you would like to continue to use your HR software as an on-premise variant, you can migrate to it by then SAP Human Capital Management for SAP S/4HANA necessary.
SAP Human Capital Management for S/4HANA (SAP H4S4)
SAP Human Capital Management for S/4HANA, also unofficially called H4S4, is a module of the SAP S/4HANA software solution. It is best explained using the abbreviations chosen. The S stands for simple and the 4 for the fourth generation of the SAP Business Suite. With HANA refers to the underlying database technology that was developed by SAP itself. Among other things, it is characterized by fast data processing. The H4S4 represents an on-premise solution, but is based on more modern technology with S/4 HANA. In addition, H4S4 can also be operated in a private cloud. Maintenance of H4S4 has been promised until at least 2040.
SAP SuccessFactors (SF)
SAP SuccessFactors is also based on the HANA database, but is an independent software product for personnel management. As a cloud solution, you can access it easily and from any location. Other advantages of the cloud include rapid implementation without extensive investments in your IT infrastructure as well as fixed release cycles that contain new features and product improvements. The term HXM (Human Experience Management) is also associated with SAP SuccessFactors. It expands the perspective of HCM (Human Capital Management) and focuses more on employees and their motivation, needs and experiences in the company.
But how should you design your HR software landscape so that you receive the best possible support in the tasks and challenges of your work?
The options are diverse and range from a pure on-premise solution to a full cloud solution. Due to the modular structure of the SAP software, a hybrid strategy is also conceivable. For example, you can use functions such as recruiting or onboarding from SuccessFactors, while time and payroll remain in SAP HCM or H4S4 on-premise.
Choosing the right tool depends on your specific needs, preferences and company resources. There are also external conditions, in particular the end of maintenance for SAP ERP HCM.
In summary, SAP HCM offers you extensive and reliable support to meet the current challenges in human resources management. The cloud-based solution SAP SuccessFactors offers you this support in a further developed form with a high level of future security. A transition from on-premise to cloud is also possible gradually using a hybrid approach. If your company doesn't want to or can't switch to the cloud yet, you get a strong on-premise interim solution with SAP Human Capital Management for S/4HANA that you can use until at least 2040.
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