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"Implementing Human Resource Management with SAP R/3" - by Shannon K. Cambell 

The number of companies using SAP R/3's Human Resource (HR) module has increased dramatically in the last few years, with many clients adding HR to their live suite of modules, or even choosing HR as an initial or standalone implementation. As an HR application consultant involved with several complete implementations, I would like to share some insight into SAP's HR capabilities, experiences from recent projects, and some critical success factors for HR projects.

The HR module enables customers to effectively manage information about the people in their organization, and to integrate that information with other SAP modules and external systems. From the Organization Management perspective, companies can model a business hierarchy, the relationships of employees to various business units and the reporting structure among employees. The Personnel Administration (PA) submodule helps employers to track employee master data, work schedules, salary and benefits information. Current Personnel Development (PD) functionality focuses on employees' skills, qualifications and career plans. Finally, the Time Evaluation and Payroll submodules process attendance and absences, gross salary and tax calculations, and payments to employees and third-party vendors.

Consistent with the overall integration of SAP R/3, the HR module shares information with other modules, such as Financial Accounting (FI), Controlling (CO), Production Planning and Business Workflow. The Payroll processes use Accounts Payable functions to print checks, manage payment and bank information, and process payments to tax authorities and other third-party vendors. Payroll results are also posted to General Ledger accounts for use in periodic income and expense reporting. For management accounting, information regarding employment costs can be transferred to Cost Centers with in the CO module. Employees can be assigned to Work Centers, which are used in conjunction with Production Planning. Assigned positions and reporting relationships from PD are used in Business Workflow to route purchase requisitions and other documents for approval. HR works with external systems either through certified interfaces with SAP partner products, or custom developed interfaces to customer defined systems.

I got involved in HR configuration in 1997, through my involvement with another functional module. While working for a global Manufacturing company that was prototyping several modules in version 3.0f, including Financials and Controlling, I was 'drafted' by the HR team, which needed analysts to work on the international phases of the project. The company had implemented HR/Payroll for its United States employees, and planned to use the HR functionality globally. I volunteered in order to gain experience with an ongoing implementation. I was already familiar with the SAP basics, but needed to learn the business processes and functionality specific to HR management. Most of the training was on-the- job, learning the configuration by working side by side with members of the consulting team. This project focused on PA and PD, with emphasis on processing employee master data, benefits choices, and basic time and payroll data for employees in Europe and Asia Pacific. I gained valuable experience working with international team members, and an understanding of the full life cycle of an SAP implementation. I left this position when development projects declined and began consulting in order to work in an implementation environment.

My first assignment was with a small consulting group, implementing the 3.1h version of HR and US Payroll for a mid-size Engineering and Construction firm. HR/Payroll was the first phase for this client, who is currently implementing FI/CO and Materials Management, and plans to add Project Systems for a completely integrated suite of business tools. This assignment was an opportunity to work with most of the HR module, as the only full-time consultant on the project. The Basis team worked part-time at the client site, but primarily through remote access, in order to keep consulting fees and expenses low. The project used the ASAP methodology, and I was involved in all 5 phases of the project, from Planning through one month of Production Support. The biggest challenge was configuring Time Evaluation, Payroll and Benefits for several different unions who provide resources to the client. Using Schemas and Rules, which are specific to HR, we were able to expand SAP's standard functionality to accommodate these complex requirements without any code modifications. This is important to smaller SAP clients, who want to keep the system as easy to support and maintain as possible.

I am currently working with a global Engineering and Construction firm as an independent consultant. This multi- year project, using version 4.0b, includes Global HR master data, several national payrolls and integration with several legacy systems and possibly a data warehouse. The long-term scope includes merging processes for HR master data with time collection, payroll processing, and labor reporting for job costing and billing, as well as developing solutions for managing international assignments and payroll. We are still in the planning stages, trying to scope the project into manageable, intermediate steps to achieve the overall conceptual design.

HR implementations are similar to other SAP projects in many ways. Companies need accurate, timely information to compete in a global marketplace, and this extends to people as well as inventory, manufacturing capacity and sales data. The goal of most SAP HR projects is to provide managers and HR professionals with the capability to manage this people information effectively, to the benefit of both the employer and the employee. As with any SAP project, it is important to recognize that scope changes cost time and money, and to evaluate the potential cost and risk of increasing the project scope after the planning phase. Most SAP project teams consist of client employees, Implementation Partner consultants and independent contractors, with a wide variety of skills and experience in business processes, information systems and SAP R/3. Consistent direction from both client and consulting project managers is critical to developing the 'one team' atmosphere which can make the difference between an on-time, on-budget project and one that is late and far beyond estimated costs.

Some of the challenges customers face when implementing SAP HR stem from the differences between HR projects and other projects, such as Finance or Production Planning. The primary distinction is that the processes revolve around people rather than more finite data, such as sales orders, or balance sheet entries. It is complicated to define the handling of people, and to know when a process is a best practice, without being able to balance totals at the close of business. The business users also bring a different perspective to the project; unlike a typical finance user, many HR professionals and managers do not view computer systems as a primary tool for their business. To be successful, it is critical to define the project as more than a systems installation, and to include senior HR managers in the ownership of the project. It is also essential to align the HR and systems team members as closely as possible. Methods of accomplishing this include physically locating the teams together, scheduling team building activities early in the project and holding cross- functional status meetings throughout the entire implementation.

The future of SAP's HR module looks promising for both customers and implementers. Internet technologies will provide SAP customers new tools to include employees in maintaining their own data, and increase management's ability to quickly report on critical employee information. Developing solutions for companies with extensive expatriate assignments will improve the way businesses manage and pay international employees. These factors, along with emerging rapid implementation tools will make SAP an ever-stronger choice among HR management systems.


















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