SAP HR ERP Systems
IS451
April 8, 2025
Professor Garlington
T1 - ERP Consulting
I. Agebsar, S. Burkett, A. Garcia, J. Lopez, F. Ramin, C. Turcios
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EXECUTIVE SUMMARY
An enterprise resource planning (ERP) system is an essential requirement for modern
businesses aiming for efficiency of internal processes, data management, and workforce
performance. As part of the ERP components, HR management is still an important area that
directly affects the organization's culture, productivity, and long-term success. This report
provides a comprehensive consulting proposal for implementing the SAP Human Capital
Management (HCM) and the SAP Human Experience Management (HXM) solutions in a mid-
range organization with an employee strength of 500 to 1000.
The mission of SAP's HCM and HXM is to enable you to gain control over your
complete HCM process, from the moment you recruit a worker to employee engagement,
workforce planning, payroll, succession development, and when they retire (SAP, n.d.). The
HXM suite goes beyond traditional HR management to include components of employee
experience and feedback mechanisms for higher employee satisfaction and retention (Ihsan et al.,
2024). Our firm recommends a strategic but scalable SAP HCM / HXM implementation for the
client using their defined workforce goals and existing IT infrastructure. The market overview of
competing HR ERP solutions (Oracle, Workday, ADP) and a comparative analysis based on
hosting models, cost, customer base, and industry feedback are also covered in this report
(Lougee et al., 2019). We also do the product analysis of SAP HR components and give a guide
on scope, cost, risk, and project schedule.
The budget and implementation cost section describes a $10,000 practical consulting plan
with minimal cost and minimum disruption, which will deliver great value for money. These
include planning, configuration, training, data migration, and post-implementation support. With
competitive costs, a hybrid on-site and remote service approach will ensure a personal
implementation experience. Finally, as presented here, the purpose of the ERP proposal is to help
a client have a system of generate data that will help improve HR operations, be in line with the
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law, give insights into what the workforce is and will be like, and assist in employee
engagement, all of which are vital for sustainable business.
MARKET OVERVIEW
Highlight at least 4 different competitor solutions (including the assigned product) and compare/contrast
using the following criteria:
i. Software provider name and product name
ii. Hosting options (e.g., cloud, on-premise, hybrid, etc.)
ili. Current customers using software
iv. Software costs (e.g., estimates)
v. Customer feedback / product rankings (e.g., Gartner, etc.)
PRODUCT ANALYSIS
No matter the type of business, every corporation has one thing in common– its people.
People are the backbone of any organization and provide the most impact on many critical
business processes, despite the increasing automation of today’s world. Having a team of people
that aren’t only ready to work, but are eager to contribute, is necessary in ensuring that one’s
company finds the success it desires. But getting a team of employees to this state– well trained,
supported, and motivated– can prove to be a challenge without a proper systems implementation.
Enter SAP Human Resources Enterprise Resource Planning. (SAP HR ERP)
SAP has developed multi-generation HR ERP systems, such as a couple SAP Human
Capital Management (HCM) integrations, as well as the more modern SAP Human Experience
Management (HXM) system to assist organizations in maximizing the efficiency and impact of
their HR processes. Dr. Ali Ahsan, an HR business partner, stresses the importance in
maintaining high HR standards within a company, as it “is an integral part of any organization,
playing a crucial role in shaping its culture, driving strategic initiatives, and ensuring the
sustainability and growth of the business” (Ahsan 2024). In a competitive business environment
where recruiting and retaining top talent is more difficult than ever, a strong HR foundation
becomes a key differentiator. Companies that prioritize HR not only build stronger teams but
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also create positive cultures that align with long-term business goals. With this understanding,
we can now observe the core components and activities of SAP’s line of HR products.
Before diving any further, it is important to acknowledge the key differences between
SAP’s different ERP systems available. SAP’s original HR module was released in 1980 as a
part of SAP’s R/2 system. Nearly two decades later, in 2001, SuccessFactors released, being
SAP’s HCM cloud-based solution at its time of release. In 2019, SAP’s SuccessFactors HCM
began to be recognized as SAP Human Experience Management (HXM). Josh Bersin, a well-
renowned HR researcher, commented that SAP “reinvented the concept of the suite from that of
a business-centric operational system…to that of a system that can help companies and
employees grow, evolve, adapt, and thrive.” (Bersin 2023). Fast forward to only a few years ago
in 2022, SAP HCM (for S/4HANA) deployed as an on-premise system that is largely used by
many companies who are looking to operate on their traditional servers and are not ready to
transition their infrastructure to a cloud-based system. Encompassing these different ERP
products, there are in fact a lot of overlapping features a company can benefit from.
Whether a company uses an on-site or cloud-based module, as stated in Monk’s and
Wagner’s Concepts in Enterprise Resource Planning 4th Edition, there are many tools that help
manage the following components:
● Roles and Responsibilities
○ Clarifies role duties and ensures accountability within the organization.
● Definitions
○ Establishes set terms throughout the system to maintain consistency across
departments.
● Personal Employee Information
○ Stores and manages crucial employee data.
● Time Management
○ Primarily handles work schedules and absences among employees.
● Payroll
○ Automates employee salary processing.
● Travel Management
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○ Organizes employee travel and manages expenses, according to company policy.
● Employee Training
○ Coordinates and manages training programs for employees.
Regarding the above components, there are a few key tools SAP’s HR ERP systems utilize that
are worth noting. First, there is the Organization and Staffing Plan Tool that can set a definition
for the company’s management and organizational structure as a whole. This includes the
departments within the business, the roles and responsibilities of each employee, as well as the
definitions associated with them. Closely associated with the Organization and Staffing Plan
Tool is the Manager’s Desktop Tool found in SAP’s HR system. With this tool, all HR data, such
as employee records and key transactions, become available to those with granted access. This is
extremely useful for line managers, department heads, and other individuals placed higher up
within the organizational structure who need to interact with HR data to continue with their
respective tasks.
Advanced SAP HR ERP features, such as time management, payroll, travel and training
also have solutions provided for them within the system’s capabilities. Time management is
crucial since employees’ pays may be contracted differently, and the organization needs an
efficient way of tracking and processing this information. To do this, SAP uses the Cross
Application Time Sheets(CATS) which will collect and organize the data, and then transfer it
through SAP’s Controlling, Production Planning, and Payroll modules. Company payroll
involved several factors like remuneration elements, as well as statutory and voluntary
deductions. Remuneration covers an employee’s bonus pay, sick pay, overtime, etc., while
statutory and voluntary deductions mainly cover tax related expenses and company loans. Within
the Payroll Run in the HR ERP systems from SAP, will filter all this input data and note any data
inaccuracies within the error log. Travel management is also considered to be a more complex
system feature in which the company can handle through SAP’s ERP Travel Management
System. This module will store and organize all travel data for each employee, which ranges
from car, flight, and hotel information. The travel management system integrates its data with
accounting and payroll modules to properly manage expenses and reimbursements for the
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employees. Finally, there is the Training and Development components that are heavily
supported through the implementation of these SAP ERP systems. HR has a heavy focus on
training and development through position requirements and employee qualifications. It is
important to have great security and control over this information so the HR team can develop an
effective Succession Plan for when key employees take a leave from the company–as it’s an
inevitability.
SAP’s HR ERP system is not limited to only these features, as it is very robust and can
find great value across many other aspects for a company as well. The following list( also
sourced from Concepts in Enterprise Resource Planning 4th Edition, as referenced above) can be
provided to truly understand the reach these products have:
● Mobile Time Management
● Family and Medical Leave Management
● Domestic Partner Handling
● Administration of Long-Term Incentives
● Personnel Cost Planning
● Payroll Management for Global Employees
● Management by Objectives
It should now be very transparent to see the absolute potential these products have once
implemented into an organization’s infrastructure. And now having a greater understanding of
these SAP HR ERP systems through the detailed information up to this point, our team can
proceed with the project management considerations for the organization.
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PROJECT MANAGEMENT
Implementation Considerations for:
i. Scope
Project Scope
The scope of our SAP HR/HCM/HXM implementation requires full usage of HR
functionalities for the 500-100 employees. Recruiting, onboarding, time management, performance
tracking, and employee engagement tools are
Deliverables:
ii. Schedule
Project Initiation Week 1 Stakeholder alignment and
finalizing charter and project
scope
Project Planning Week 2-2 Finalize requirements,
schedule, risk planning and
resource allocation
Design Weeks 4-6 SAP HCM/HXM system
design, system configuration,
Development Weeks 7-8 Integration, security settings,
customization
Testing Weeks 9-10 Unit & system testing, user
acceptance testing
Training Week 11 Develop and hold training
sessions, gather user
documentation
Deployment Week 12 Final data migration. monitor
performance
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Post Project Support Week 12-16 User support
iii. Cost
iv. Risk Management
BUDGET & IMPLEMENTATION COSTS
What is our firm going to be charging for our services? And Why?
i. Light breakdown of hypothetical budget for our client and final cost analysis for resource
and labor acquisition.
BUDGET & IMPLEMENTATION COSTS
Regarding SAP Human Capital Management or Human Experience Management consulting
services, our firm’s assigned fee for service would be computed based on the scope or length of
the partnership and complexity of the project. Some of them include solution architecture,
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system setup, data transfer, training, system verification, and system support after the
implementation.
Overall, the consulting cost for a mid-sized organization of 500-1000 employees for
implementing our services will be $10,000, and the breakdown will be as follows;
1. Consulting & Planning Services – $1,000
● Initial needs assessment
● Selection of SAP HCM or HXM modules based on client priorities
● Planning system architecture
● Alignment with business goals
2. System Configuration & Customization – $2,000
● Integration with existing ERP or third-party tools
● Tailoring HR modules (e.g., recruiting, payroll, talent management)
● Custom report setup
3. Training & Change Management – $2,000
● Supporting organizational change and user adoption
● Training HR staff, managers, and system admins
● Developing user manuals and training materials
4. Data Migration & Testing – $2,000
● Extracting, cleaning, and importing historical HR data
● Functional and performance testing to ensure system readiness
5. Post-implementation support (3 months) – $1,000
● Knowledge transfer and documentation
● Troubleshooting
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● Software updates and minor changes
6. Licensing & Third-Party Costs – $2,000 (estimate)
● SAP HCM/HXM license fees (varies based on modules and the users)
● Potential cloud hosting or infrastructure costs if not already in place
Total Estimated Budget: $10,000
This cost is a blended model of an on-site consulting service done during the kickoff and testing
phases, besides a configuration and other support, which this approach does at a lesser cost. The
price is relatively reasonable and fits the average rates within the SAP HCM/HXM market,
hence the high value and return on investment when it comes to implementing the solution in
order to minimize some of the tedious manual work in HR functions, increasing compliance, and
in general, improving the overall experience of employees. Overall, a strategic implementation
ensures that the client derives benefits from well-adopted, scalable, and efficient HR systems and
reliable assessment of the workforce.
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References
Ihsan, M., Saeed, M., & Rahman, A. U. (2024). An intuitionistic fuzzy hypersoft expert set-
based robust decision-support framework for human resource management integrated with
modified topsis and correlation coefficient. Neural Computing and Applications, 36(3), 1123-
1147.
Lougee, M., Chandra, R., Cerrato, J., Pang, C., Hanscome, R., Freyermuth, J., & Poitevin, H.
(2019). Magic Quadrant for Cloud HCM Suites for 1,000+ Employee Enterprises.
SAP. (n.d.). Human Capital Management (HCM) | Cloud HR Software Systems. SAP.
https://www.sap.com/products/hcm.html
https://sapns2.com/the-rise-of-human-experience-management/
https://hrizons.com/resources/what-is-hxm-human-experience-management-with-sap-
successfactors/
https://www.linkedin.com/pulse/value-human-resources-why-hr-important-md-ali-ahsan-b7asc
https://joshbersin.com/2023/10/successfactors-delivers-on-hxm-and-the-promise-of-ai/
#:~:text=So%20they%20invented%20the%20idea,grow%2C%20evolve%2C%20adapt%2C
%20and
