If you are running your SAP payroll in more ‘traditional’ on premise and S4HANA mode, it may feel like making plans to move to SAP cloud payroll leaves you with more questions than answers:

• Is the SAP cloud offering robust enough for your business?
• Will we have to start again from scratch?
• Will the move cause disruption to your existing payroll solution and to the team processing it?
• How long will SAP continue to support my existing solution?

While the answer to that final point seems to change regularly (on-premise support can be extended to 2030 at the time of writing), Gavdi’s team of expert SAP Payroll Consultants are on hand to guide you through cloud payroll vs ‘on premise’ and provide answers with solutions, giving you the confidence that now really is the time to plan that move.

What is SAP Cloud Payroll?

SAP Employee Central Payroll (“ECP”) consists of three core elements:

Employee Central (EC)

You start with your core or foundation with EC which is the ‘system of record’ for your Master Data for employees in the award-winning SAP SuccessFactors solution. Here you maintain all the starters/leavers/movers in your company, adding personal, contractual and payment information to build up a detailed HR record. In addition, we activate a new Payroll specific ‘portlet’, enabling you to add compulsory payroll data e.g Tax Codes, National Insurance Category, Pension and Statutory Absences. If you are already using EC Time Recording for Absences and Overtime, this data can also be seamlessly integrated for Payroll.

Employee Central Payroll (ECP)

This is your new Payroll processing engine, hosted by SAP. It looks like ‘traditional’ SAP, so the end-user experience is pretty much the same, with arguably the most powerful payroll engine – SAP Payroll. Data marked for payroll flows from EC to ECP, building up your payroll records in the Personnel Administration (“PA”) module that is identical to your ‘on-premise’ payroll records. All the traditional payroll transactions are present and correct, from PA30 to PC00_M08_CALC. The difference is you won’t be using them in the traditional manner, you’ll be working in the new SAP Payroll Control Centre.

Payroll Control Centre (PCC)

The PCC is a SuccessFactors module that connects EC to your ECP payroll instance and allows you to interact with the SAP payroll transaction in an entirely new and innovative way. Gone are the days of remembering convoluted transaction codes, your SAP partner will build ‘processes’ that consist of linked core transactions, arranged in a logical order that can be run to your specific timetables. These processes trigger alerts and reports that are automatically distributed to ‘teams’ that you define in PCC. All the while, you’ll get real time analytics and KPI’s showing changes in pay, missing data, trends and errors etc. Furthermore, the PCC gives you all of this from simulation runs, reducing the time you need to close or ‘lock’ payroll – streamlining your processes even further.

All three elements above are integrated using Point-to-Pont (“P2P”) integrations which has been developed by SAP keep integration complexity to an absolute minimum.

Ready to Make the Move?

It might please you to know that if we start with your EC system, it’s going to be a case of ‘evolution’ not ‘revolution’. If you currently have EC, your core EC data can remain unchanged, especially if you are already integrating to your on-premise payroll system. We’ll add the payroll portlet and link to the SAP info-types (0065, 0069, 0071, 0088 etc.) and work with you to ensure your data is in shape for replication.

Your existing replication technology (for example Dell BOOMI or Business Integration Builder (BIB)) can continue to function while we configure P2P, ensuring minimal disruption to BAU.

If you don’t currently use EC, Gavdi can easily deploy it within your organisation using our Packaged Solutions approach when implementing ECP at a small incremental cost.

When it comes to your ECP payroll build, its similarly good news. ECP is nearly identical to your ‘on-premise’ SAP payroll solution. The same structures and tables you’ve configured for years are all present and correct. This allows us to ‘pick-up’ your existing payroll build (‘lift and shift’) and move it to ECP via a series of SAP Transports as copies of your existing transport list. Every wage type, work pattern, custom rule, Payslip and most importantly, your company schema will be moved and available in your new ECP instance without the need to re-build.

As we know, some payrolls are more complicated than others and if you’ve been running on-premise payroll for many years, you could have hundreds of transports. Gavdi will work with you to analyse your existing build and plan the move. Fortunately, when we add old transports into a newly created one, it copies the object in its current most complete state, giving us confidence we won’t need to worry about version control or overtakes.

Test Strategy

A key aspect of the move to ECP will be the regression testing against your existing system. Gavdi will help you define a detailed test strategy that includes positive and negative testing of the core payroll technical build and processes as well as your data. Comparing SAP to SAP is more simple than migrating from an entire different technology. Tables are identical, output can be exported to excel in mirror image files and data can be migrated, without any manipulation, to make it SAP compatible (year to date figures being a prime example if you are migrating mid tax year).

At this point in the project, you’ll need to ask yourself a question. Should ECP be an exact copy of our Legacy SAP system or is there room for improvement? If you’re lucky to have the perfect payroll system, an exact copy might be all that’s required. But, maybe your Pension Auto Enrolment has never worked or you’ve far too many work patterns, or average holiday pay always requires a manual work around? Use this as an opportunity to improve and enhance your system. Our consultants will help to ensure your payroll system is working to its maximum potential.

As we near ECP Go Live, focus will shift to 100% data accuracy and system readiness. We will need to complete some parallel runs (at least 2-3 periods recommended) to give you the confidence that ECP perfectly mirrors your outgoing payroll. An important test will be to ensure accurate reporting to your country’s tax authority. Using HMRC as an example in UK, data must report seamlessly from old to new system – Personnel numbers, year to date figures, personal data must be perfect to ensure employees are not automatically taxed for a second employment.

Conclusion

The future of Payroll is here and has been for a while – it is tried and tested. ECP is where SAP is focusing its payroll innovation and development and that is ongoing. The latest version of the Payroll Control Centre is being used worldwide by many customers who are enjoying its enhanced features and improvements over traditional on premise payroll. If the upgrade to ECP is on your roadmap, Gavdi Group would like to work with you, so please contact us to arrange a brief chat with our experts to see if it is the right thing for your organisation.

Gavdi Group is an employee-owned company with a proud heritage and an outstanding reputation for delivering award-winning SAP workforce management solutions built around human experience management.