Week 1: Your Journey to the Cloud

Unit 1: Where is HR? Trends and strategy

Where is HR? Trends and Strategy
We are surrounded by drivers for transformation

change
change

disruption

state

rising

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Where is HR? Trends and Strategy
SAP Corporate strategy – the Intelligent Enterprise

Business Business Net work

Process

Across all functions

Business Process Intelligence

Experience Management

Applications Intelligent Suite Industry Cloud

Sustainabilit y Management

Technology Business Technology Platform

Infrastructure SAP Data Center or Hyperscaler

At SAP, we provide the foundation for companies to become intelligent enterprises,

enabling them to make impactful changes to run their business better by growing more
resilient, more profitable, and more sustainable.
Source: SAP Intelligent Enterprise

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Where is HR? Trends and Strategy
It’s A Journey, Not a Destination

Moving to the cloud from a heavy, complex,

and highly customized monolith

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Where is HR? Trends and Strategy
It’s A Journey, Not a Destination

Moving to the cloud from a heavy, complex,

and highly customized monolith

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 Where is HR? Trends and Strategy
SAP supports your specific starting point for ERP and/or HR deployment

3.
1. 2. Exceptional option:

SAP ERP Public Cloud 1) Private Cloud 2) OnPremise 3)

Customer owns software Shared, highly secure cloud Exclusive, managed cloud Customer owns software
and fully manages it. resources for multiple customers. infrastructure for one customer. and fully manages it.

License  Perpetual license  Subscription fee  Subscription fee  Perpetual license

Code changes  Yes  No  Yes, on-premise code line  Yes, on-premise code line
Upgrades  Customer owned  Regular upgrades and innovations by  Customer owned or service by SAP  Customer owned
SAP
Data Residency  Data center (customer)  Data center (hyperscaler, SAP)  Data center (customer)
Customer Preference  Consolidate  Hyperscaler or SAP region
 Evolve  Consolidate
 Transform

as a Product as a Service as a Product

Strategy Enables customer to move to the cloud on their own pace per process area within existing conversion, extension and swap policy

1) SAP SuccessFactors | 2) SAP HCM for SAP S/4HANA, private cloud edition | 3) SAP HCM for SAP S/4HANA, on-premise edition (coming in Q3 2022)

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Where is HR? Trends and Strategy
SAP HR Offerings – Customer Characteristics

Transform HCM Evolve HCM Optimize ERP retain HCM

Exceptional option:

SAP SuccessFactors Private Cloud HCM SAP S/4HANA On-Premise

(= Public Cloud) incl HCM
Customers who desire: Customers who desire:
Customers who require:
• A complete, modern, native SaaS • A rapid conversion of their existing
solution with the full benefits of ERP/ECC environments to a Cloud-based • An in-house infrastructure, because they
public cloud infrastructure are unable to move a cloud managed
infrastructure
• The fastest path to innovation and • The flexibility of a traditional on-premise
the lowest TCO, based on subscriptions application as well as subscription-based, • Complete control and ownership of
cloud economics their application and data landscape
• A clean Cloud solution without
converting old/legacy processes and • Gradual transformation to a pure SaaS • The utilization of their existing
configurations. landscape at their own pace infrastructure and IaaS vendor agreements

• Transform business processes and take • Full, extensive, ERP functionality including • Specific compliance with industry- and
advantage of standardized best partner add-ons with the ability to extend country-specific regulatory requirements
practices, with extensibility and enhance
• Based on SAP ERP HCM with comparable
• Very extensive full scope suite for HXM • Limited functional scope for HCM PCE functional scope

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Where is HR? Trends and Strategy
SAP HR Portfolio Investment Strategy

SAP SuccessFactors SAP Human Capital Management

for SAP S/4HANA
Major and future oriented
investments to meet the latest trends Selective enhancements and
in HR by delivering outstanding localization across Core HR and
innovation to Payroll processes to support continuity
re-think and re-imagine HXM
through bi-annual release cycles.

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Where is HR? Trends and Strategy
Key HR Trends Influencing Innovations in HXM

… and Our Customers’ need for a Transformation Journey

Workforce Composition Employee Expectations Intelligent Technologies

is evolving permanent, temporary, and Demands continue to change are changing everything
alumni, retirees

Upskilling and Reskilling Pay and Rewards Remote Work

are business-critical are moving from “one size fits all” to Simplified with modern technology
highly personalized
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Where is HR? Trends and Strategy
New Ways of Working Are Evolving Fast

Research shows that Learning, Digital Workplace and Employee Experience continue to be
top priorities
Sixty-nine percent of respondents report an increase in
skill building during the pandemic, more so than for other
actions to close skill gaps. Changes in actions used to close
skill gaps, since the end of 2019, % of respondents 2021 Technology Adoption (Deployed or will deploy in 12 months) HCM technology supporting future of work

Building Digital Workplace to Support Working 96%

90%
Skills From Home 79%

62%
Artificial Intelligence/Machine Learning 46%
Redeploying Hiring Releasing Contracting 34%

59%
Robotic Process Automation 56%
48%

58%
Distributed Cloud 44% Market and Workforce
30%
Demographic Shifts Planning
43%
Multiexperience Development Platform 30%
18% Future of Work
35%
Edge Computing 24%
14%
MORE 69 46 42 29 36 22%
5G 16% Consolidated Labor
10% New Employee Market Emerging
LESS 7 8 25 12 20 19% Employment Data Insights Analysis Technologies
Digital Twin 16% Models
10%

15% HCM
Hybrid Talent HR Application
Blockchain/Distributed Ledger 10%
Marketplace Tech Framework
6%

12%
Augmented Humans 8%
62% 38% 17% 17% 16% 5%

0% 20% 40% 60% 80% 100%

Percentage-point difference

Top Typical Trailing

The extensive period of hiring freezes raised management’s awareness of the Due to increased working from home, digital workplace is at the top (96%) and is now considered a Each aspect of the future of work will continue to be supported by multiple
criticality of strategic internal mobility, effective talent management, and advanced fundamental technology. AI (62%), Robotics Process Automation (59%) and Distributed Cloud approaches and solutions. By 2023, 80% of enterprises with 2,500+ employees will
learning systems so people can upskill and reskill from anywhere. (58%) are also expected to show fast growth beyond COVID-19. augment annual engagement surveys to better understand worker sentiment.

Source: McKinsey & Company Source: Gartner Source: Gartner

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Where is HR? Trends and Strategy
Transitioning to the cloud is about remaining competitive in an ever-changing world

Legacy HCM Digital HXM

▪ Intensive infrastructure / ▪ Agile cloud architecture and

disruptive updates infrastructure
▪ Manual processes ▪ Easy and intuitive tools
▪ Staffing / learning / training ▪ Automated processes
intensive ▪ Modern, intuitive and mobile
▪ Complex and fragmented tools ▪ Self-service, anytime,
▪ Timely / costly to innovate / roll anywhere
out innovations ▪ Consumable & continuous
▪ Mobile is challenging innovation
▪ Back-end oriented ▪ Less cost for integration and
flexible to update

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Where is HR? Trends and Strategy
Staying Competitive in an Ever-changing World

Legacy HCM Digital HXM

Less Flexibility Accelerate with a
with On-Premise Cloud People Platform

▪ Organizational strategy and execution enablement: Respond quickly, improve impact

▪ People experience: Provide better workforce experience with simplification, access, and purpose
▪ Operations optimization: Enhance service delivery with simplification, integration, and automation
▪ Compliance and risk management: Leverage cloud baseline, focus on predicting and avoiding risk
▪ TCO reduction and cost avoidance: Reduce resource / system management; leverage configurability,
accelerators, and innovation tools
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Where is HR? Trends and Strategy
Staying Competitive in an Ever-changing World

Target State

SF Next Generation Payroll

• SAP leaves no customer SAP SuccessFactors Employee Central Payroll

SAP SuccessFactors Time Tracking

behind SAP SuccessFactors Core HR (Employee Central incl. Time Off + Benefits)
SAP SuccessFactors Talent Management

Solution Deployment
Transition State

• Each customer has a unique Application Implementation

Transition Solutions, e.g. HCM Private Cloud edition

starting point and it’s own Lift & Shift + Replace Big Bang

pace SAP HCM for SAP S/4HANA on Premise edition

Legend:
Replac
Transition Path Initial State
e Technical Migration

• Transition Scenario’s to
Migration Strategy
On-Premise SAP ERP HCM
Private Cloud
SF Public Cloud

mitigate risks AND optimize Sept 2022

* H4S4: Short for SAP HCM for SAP S/4HANA, on premise; SF: Short for SAP SuccessFactors
Mainstream Maintenance
Dec 2027
Extended Maintenance
Dec 2030 Dec 2040 Timelines

benefits

Your Journey To the SuccessFactors Cloud?

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