SAP Solution Brief

SAP ERP AUTOMATE GLOBAL HR AND

SAP ERP Human Capital Management
HR and payroll organizations
worldwide are consolidating
core HR and payroll opera-
tions on a common global
platform with no disruption
to their business. Key to
a smooth implementation is
the know-how embedded
in HR, payroll, and financials
software from SAP.
PAYROLL PROCESSES
INTEGRATED HR FOUNDATION FOR
INSIGHT INTO GLOBAL WORKFORCE
Fragmented software landscapes are
common in today’s multinational organi-
zations. In some cases, they are a result
of “historical reasons” no one can any
longer recall. In other cases, decentral-
ized decision making leads to a hetero-
geneous technology foundation that
may meet the needs of local stakehold-
ers but fails to maximize returns for the
global organization in terms of informa-
tion transparency. This is sometimes
recognized as a stumbling block for
the business and sometimes as a low-
priority challenge to be dealt with at
some point in the future.
What SAP has shown over many years
of serving a variety of HR and payroll
organizations worldwide is that consoli-
dating core HR and payroll operations
on a common global platform does not
need to be an exercise of nerves, nor
must it disrupt business or cause any
discontinuity to operations. A common
global HR and payroll environment is not
only technically feasible and operational-
ly desirable, it can be achieved with a
common global skill set that places con-
trol of previously decentralized opera-
tions within a single instance of SAP®
software. It becomes accessible to all
who need it and extensible to support
non-HR processes like financial opera-
tions with relative ease. (See Figure 1.)
The payoff in these scenarios is enor-
mous – better workforce data, better
ROI, and a surprising agility in handling
disparate legal and end-user require-
ments with a single instance of SAP

Consistent accurate data Reduced risk • Compliance with

• One integrated system and increased legal requirements
of record for personnel, compliance and year-end payroll
payroll, and financial data and accounting
• No duplication of data rules
• Reduced exception • Automated time
handling and attendance
workflows
Human resources • Increased
Benefits transparency
Time
Automated global Payroll
HR processes Financials Payroll
optional (outsourced)
• Consistent, standard-
ized processes
• Global reach (languag- Clear sourcing
es, currencies, and reg- strategy
ulatory requirements) • Multiple deployment
• Adherence to global options – in-house,
financial business outsource, hybrid
requirements (chart of Lower IT cost • Increased efficiency
accounts, tax calcula- • Reduced interface and maintenance costs of HR operations
tions, payroll, deprecia- • Single instance for multiple countries • Reduced adminis-
tion methods) • Flexible technology platform trative workload

Figure 1: Single Integrated Solution with Unified Global Processes

technology. The benefits of the solution
aren’t just operational. Consolidating
HR and payroll operations within a sin-
gle platform provides decision makers
with unprecedented, detailed intelli-
gence about workforce costs that is
simply unachievable in a heteroge-
neous HR IT environment.
Fragmented Solutions and Broken
Processes
HR, payroll, and finance software cer-
tainly have individual stakeholders who
may be involved directly in selecting,
implementing, and managing those so-
lutions on an ongoing basis. Each set
of stakeholders has specific needs and
priorities. The key to achieving best-in-
SAP has shown over many
years of serving a variety of
HR and payroll organizations
worldwide that consolidating
core HR and payroll opera-
tions on a common global
platform does not need
to cause any discontinuity
to operations.
class HR and payroll processes is to
recognize the common challenges an
organization faces in managing its labor
costs and identifying areas for improve-
ment that cut across these disparate
solutions.
For example, public and private sector
organizations today universally recog-
nize the need to be more agile. Never
before have so many organizations
worldwide shifted their sources of labor
and their workforce cost structures in
order to weather economic uncertainty
and continue growing, competing, and
executing their business strategies. But
how does an organization truly know
the makeup of a far-flung global work-
force? How can management deter-
mine the best mix of contingent and
full-time labor without clear reporting
on labor costs across lines of business
and geographical boundaries?
Having a comprehensive end-to-end
process that starts with data entry by
employees and HR staff for payroll and
extends to financials operations is the
prerequisite for enabling strategic work-
force decision making. Eliminating re-
dundant data throughout the process
makes the process more efficient. Uni-
Vice president HR HR administrator
Vice president Benefits
HR administration
Human Create
resources plans
Employee
Plan
enrollment
Payroll
Finance
Manager
Figure 2: Automated Global HR and Payroll Processes Across the Enterprise
fying the process across organizational
and geographical boundaries makes
the data useful. In practical terms, this
means you can run payroll for business
units in multiple countries from a single
solution with a single data model. You
bypass duplicate data entry and benefit
from a posting process that creates
balanced general ledger and other en-
tries in the SAP ERP Financials solution
without requiring extra adjustment or
manual intervention by users to trans-
form the data. This renders analysis
simpler than ever before.
Comprehensive Process Steps
SAP offers a flexible way for you to get
up and running as you automate global
HR and payroll processes. A number of
optional, implementable steps com-
prise the entire process. Each step re-
lies on the foundational HR compo-
nents in SAP software. Each step can
be tailored to your organization’s needs
Payroll manager Controller
Time General ledger
management
Payroll
and controlling
Enter
time
Evaluate Calculate Transfer to
time gross/net financials
Scheduled
close
Analyze labor costs
and legal requirements. And each step
addresses the needs of stakeholders
from different teams across your orga-
nization, from benefits administration
and payroll to accounting. (See Figure
2.) The key implementable steps are
described below.
Benefits Administration
In this implementation step, you create
the benefits plans your employees may
enroll in and can configure the payroll-
relevant processes, including payroll
deductions. You can include self-service
functionality to allow employees to enter
and update their information online – a
key advantage for reducing administration
costs and an attractive option for
shared-services environments.
Time Management
When you implement time manage-
ment, you can define payroll-relevant
shifts and time schedules, working cal-
endars, and vacation allowances. As
with the benefits functionality, this in-
cludes self-service functionality to let
users enter the time they worked as
well as their absences and breaks.
They can allocate the time they worked
to any number of relevant projects with-
in the HR software or within other soft-
ware. For example, staff can allocate
time worked to project tracking soft-
ware or cost allocations software serv-
ing your financial operations. With the
time evaluation function supported in
the SAP software, you can dynamically
generate a variety of payroll-relevant
time codes to be used in determining
employee pay.
Payroll
The payroll engine is a multinational
solution that integrates directly with the
HR software from SAP – allowing users
to enter HR information that becomes
immediately available to the payroll pro-
gram for gross-to-net calculations. The
payroll software can be integrated with
SAP ERP Financials as well, which facil-
itates the efficient transfer of payroll re-
sults for the general ledger, controlling
and bank transfer activities, and other
operational purposes.
General Ledger and Period-End Closing
A variety of processes are run periodi-
cally to generate internal and external
reports from SAP ERP Financials, many
of which rely on accurate data from
the SAP software for HR and payroll.
Configuring these aspects of SAP ERP
Financials allows you to handle tasks
rapidly that would previously have required
extensive data transformation and
manual intervention.
Figure 3: Real-Time,
Relevant Information
for Decision Makers
Labor Costs
SAP provides a wealth of reporting
technology as well as content, with key
performance indicators related to the
workforce available to all users of SAP
software for HR and payroll. Using tech-
nologies such as SAP BusinessObjects™
Xcelsius® Enterprise software, you can
employ powerful analytical tools and
dashboards to deliver real-time informa-
tion about labor costs to decision
makers around the world in a visually
compelling format. (See Figure 3.) Agile
decision making becomes possible
when executives can review the drivers
of workforce-related expenses, observe
how they can change over time, and
develop an anticipatory sense of how
they will continue to fluctuate
in the future.
Find Out More
To find out more, call your SAP
representative or visit us online at
www.sap.com/hcm.
QUICK FACTS www.sap.com /contactsap

Summary
HR and payroll organizations worldwide are consolidating core HR and payroll operations
on a common global platform with no disruption to their business. Key to a smooth
implementation is the know-how embedded in HR, payroll, and financials software from SAP.

Business Challenges
• Unify fragmented software landscapes
• Achieve transparency of information globally
• Consolidate core HR and payroll operations on a common global platform
• Gain control of previously decentralized operations

Key Features
• Flexible, optional implementation steps – Automate global HR and payroll processes
rapidly
• Strong HR foundation – Configure HR and payroll processes based on HR components
in SAP software
• Compliance with legal requirements – Build support for legal compliance right into
the implementation
• Fulfillment of stakeholder needs – Address the needs of stakeholders from different
teams across your organization, from benefits administration and payroll to accounting

Business Benefits
• Better workforce data through consolidation of HR and payroll operations on a
single platform
• Reduced administration costs through implementation of self-service functionality
• Better handling of disparate legal and end-user requirements by running business
processes on a single instance of SAP® technology
• Efficient transfer of payroll results through integration with the SAP ERP Financials
solution

For More Information

For more information, call your SAP representative or visit us online at www.sap.com/hcm.
50 099 703 (10/04)
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