Case studies on maximizing SAP Human Capital Management (HCM) benefits

In this SAP ERP HCM user case study, learn how a company realized the benefits of a centralized SAP ERP HCM Employee Administration system after replacing its separate HR and payroll systems with SAP ERP HCM Personnel Administration, Organizational Management, Benefits and Payroll.

Discover SAP ERP HCM, Ch. 2

Table of contents:
Understanding and using SAP ERP HCM Employee Administration
SAP ERP HCM wage types, pay structures and master data maintenance
Case studies on maximizing SAP Human Capital Management (HCM) benefits

Chapter 2: SAP ERP HCM Employee Administration

Case Study

Table 2.10 provides you with a quick overview of a case study before we explain it in more detail.

Table 2.10: SAP Employee Administration Case Study

Company	British Satellite Company
Existing Solutions	SAP R/3 for Finance and Controlling
Challenges	Replace and consolidate separate MS Excel- and Access-based HR administration system and separate legacy payroll system
SAP Solutions	SAP Employee Administration and Payroll
Benefits	Centralized employee information storage Increased process efficiency Divulged data ownership

This relatively small British company manages a highly qualified workforce spread across the globe. The company owns and operates a global satellite network offering global communication services. The company has 600 employees spread over eight countries.

The Challenges

Running two employee data management systems, the HR and Payroll departments operated in a totally autonomous manner with no automatic interface between these two independent systems. Employee master data changes from the HR side (for example, new hires and terminations) were often not communicated to the payroll team, resulting in an unreasonably high error rate in payroll. Similarly, employee data changes such as pay increases or adjustments in allowances and benefits were often only updated in the payroll system, meaning the HR system was frequently looking at incorrect data.

This excerpt from Discover SAP ERP HCM by Greg Newman is reprinted here with permission from SAP Press; Copyright 2008. Download a pdf of this chapter.

The SAP Solution

Over an eight-month period, the implementation team replaced the separate HR and payroll systems with Personnel Administration, Organizational Management, Benefits, and Payroll. Significant time was taken to understand the business processes of both the HR and payroll teams, which were widely different despite large overlaps in responsibility. The new system integrated the requirements of both departments into one set of consistent and efficient processes. Automatic integration with the existing finance system was also introduced to streamline the payroll process. Numerous master data conflicts were encountered during the data cleanse and upload process; employees terminated in one system but not the other, differences in employee salary and benefits data, and even ghost employee records all needed to be investigated and resolved before they could be uploaded.

The Benefits

The biggest benefits the company received were related to the centralizing of their Employee Administration systems. For example, now when new employees are hired, they are instantly available to both the HR and Payroll departments. All of the errors and omissions related to the double entry of employee data are instantly removed by the single centralized system. Both teams save considerable amounts of time in data entry because data only has to be entered once.

Through the maintenance of a single employee data system, the company was able for the first time to allocate distinct areas of responsibility and authorization between the two departments, ensuring that employee data is only maintained by the responsible teams, reducing data entry errors.

Having a centralized Employee Administration system also allows the company to effectively control its employee absence data. The central system allows them to assign leave quotas, and for the first time all unpaid leave is guaranteed to be correctly calculated and deducted from employee payroll results.

The creation of a centralized organizational structure through the use of Organizational Management also had immediate benefits, giving the team the ability to quickly get an overview of the company's structure rather than relying on manually created and maintained PowerPoint documents.

One of the small but surprisingly important benefits of the system from the user's point of view was the access to up-to-date correct finance information, such as new cost centers and cost objects, one of the great benefits of integration with the Finance component.

Summary

Employee Administration gives you a system that efficiently and effectively manages your employee data, freeing up your HR administrators' time to focus on the more strategic (and interesting) parts of their roles.

In this chapter:

• We discussed the wide range of information that can be stored in Employee Administration, how that information is managed, how it is stored, and most important, what we can do with it.
• We were introduced to some of the key concepts in SAP ERP HCM including infotypes, wage types, pay structures and work schedules.
• We discussed the many tools available for maintaining, updating, and reporting on employee data and how this data is integrated with other SAP ERP HCM components.
• Reflecting on the importance of keeping employee data safe and secure, we discussed the security controls and options for managing the critical and sensitive data that we store and manage in Employee Administration.
• We reviewed a case study demonstrating some of the benefits received by one company from centralizing all of its employee data into one database.

In the next chapter we will learn about another key component of SAP ERP HCM: Organizational Management. This component creates the foundation for company organizational structure views, manager and employee self-services, workflow, and integration with other Personnel Development functions such as Performance Management, Career and Development Planning, Succession Planning, Recruiting, and Learning Solution.

You can download a pdf of this chapter. You can also visit SAP Press to purchase a copy of Discover SAP ERP HCM.

You'll find more downloadable excerpts from books by SAP experts in our SAP chapter download library.

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