Flexible job models, demographic change, lack of experts: the challenges for HR are critical, and the complexity will continue to increase rather than decrease in the future. For companies that use SAP Human Capital Management (HCM), there is another problem, as SAP’s maintenance commitment ends in 2027. What should HR managers do now to strengthen their HR department and prepare for the future?
Our working world is constantly changing, as the example of working from home shows. Although many employees are currently working from home, they are doing so on fewer days than before. One reason: more and more employers are endeavoring to bring their employees back to the office. According to the Federal Statistical Office, 23.5 per cent of all employees were working from home at least occasionally in 2023, which is only slightly less than in 2022 (24 per cent)1. However, it is not being used as extensively as in recent years. In 2023, only just over one quarter (26 per cent) worked entirely from home, whereas in 2022, 31 per cent still worked exclusively from home. This means that traditional office workstations are becoming more important again.
To retain their employees in the long term, companies are increasingly promoting flexible work time models. As a study from 2023 shows, they are right on the mark. According to the survey, around 80 per cent of full-time employees would like a four-day week with correspondingly lower weekly working hours2. The advantages: thanks to shorter working hours, employees are more productive, less stressed, and sick less often. It can be assumed that more flexible job models will become increasingly important in the future especially as the baby boomers retire and fewer younger employees follow.
Speaking of baby boomers: another survey found that almost one-third of employees aged 50 and over plan to retire before the statutory retirement age. As a result, 46 per cent of companies will see more than a quarter of their workforce retire in the next five years3. To compensate for demographic change – and the associated shortage of skilled workers – companies should push ahead with their digital transformation. Employees are in favor of this. Almost 75 per cent of employees associate clear benefits with an increasingly digital working day, such as greater work efficiency or a better work-life balance4.
If companies currently use SAP HCM for their HR management, they will have to overcome another challenge. This is because SAP’s maintenance commitment for the classic SAP ERP HCM system ends on 31 December 2027. Although the previous version of SAP HCM can still be used in SAP S/4HANA environments by using a compatibility pack, the license for this will also expire at the end of 2025. If companies leave everything as it is, there is a risk of rising costs due to higher maintenance and support fees. In addition, SAP’s cloud-only strategy raises many questions for customers regarding the future viability of their HR solutions.
Affected customers are under pressure to quickly realize the introduction of the latest HR solutions from SAP. The transition can, however, also be an opportunity. Why not test and modernize processes as part of the HR project? Or consider using cloud services that promise more flexibility and scalability than traditional on-premise solutions? With SuccessFactors (HCM Suite), SAP offers cloud-based HR software with which many HR modules can be used independently. SAP has also recently added AI functions to the solution to make work easier for employees and the HR department.
A good entry-level product into the world of the public cloud is the cloud-based SAP Concur solution for better business travel management. The digital platform helps companies to organize processes relating to the booking of business trips, travel expense accounting, and expense management more efficiently and transparently. Another alternative is the transitional solution, SAP Human Capital Management (HCM) for S/4HANA (H4S4), which has been available since the fourth quarter of 2022. It integrates the HCM module in the SAP S/4HANA core. If you want to safeguard your HCM continuity and investments, this is a good option for the coming years, as SAP provides a maintenance commitment until 2040.
As is so often the case in the digital world, the happy medium has proven its worth—a hybrid core that combines the best of the on-prem and cloud worlds. While cloud solutions are based on rigid standard configurations, specific customer requirements can be mapped in hybrid environments. For example, a company manages its payroll with SAP H4S4 as an on-premise version and connects cloud-based components from SAP SuccessFactors or Concur to HR management, such as the Talent Suite. The SAP HR solutions are either directly linked to each other or connected via the SAP Business Technology Platform (BTP).
As explained, SAP offerings for HR management open up many possibilities for companies—both for public and core hybrid solutions as well as on-premise installations. HR managers are, therefore, faced with the question of which HR solution best suits their company’s requirements. T-Systems helps them answer these questions and find the right strategy. We show HR and IT decision-makers how they can utilize the benefits of SuccessFactors cloud technology (HCM Suite) without sacrificing the comprehensive functions of SAP HCM or H4S4—for example, for payroll accounting.
As a certified SAP partner, we offer an end-to-end SAP portfolio. This enables us to map, implement, and operate all SAP and HR processes for our customers. We have extensive SAP expertise and many years of experience with SAP and cloud projects. With our SAP services related to human capital management, we focus on employees and their needs and support them with modern tools. Another plus: we also integrate third-party solutions, such as workflow automation from Pega Software, to make HR processes more efficient.
1 Press release, Federal Statistical Office (Destatis), June 2024, Wiesbaden
2 Press release, Hans Böckler Foundation, May 2023, Düsseldorf
3 Health Report 2024, Techniker Krankenkasse, July 2024, Berlin
4 New Work in Figures, eco - Verband der Internetwirtschaft e.V., October 2023, Cologne
5 Federal Statistical Office (Destatis), July 2024, Wiesbaden
6 Jobs of the future - The professional world up to 2035, Deloitte, November 2020, Munich
7 Ifo Skilled Labour Barometer, KfW Research, July 2024, Frankfurt a.M.
8 Health Report 2024, Techniker Krankenkasse, July 2024, Berlin
