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SAP offers two popular HCM solutions in SAP HCM and SuccessFactors. While both offer excellent features for human resource management, there are some major differences between the two. Businesses would do well to understand both the products, assess their needs and then make an informed choice.

Human Capital Management (HCM) technologies or products are widely used in enterprises today. A good HCM solution empowers the human resources department to streamline and automate various HR processes, thereby, saving a lot of time, resources and money. Regulatory compliance in many countries also demands employers to not only pay compensation to their employees but also record various details of them. An HCM solution helps businesses to also comply with various regulatory requirements.

In recent years, with the emergence of SaaS, cloud-based HCM solutions are in demand for various reasons. SAP’s most popular HCM solutions SAP HCM and SuccessFactors provide a wide variety of features to manage various HR activities including recruiting, compensation, payroll, training and talent management, etc. In this post, we compare SAP HCM and SuccessFactors on various parameters to help you make an informed choice.

  1. Overview

SAP HCM is a key module in SAP. It is also called SAP Human Resource (HR) or SAP HXM. It is an on-premise solution which means the software is locally installed on hardware that resides in a physical location like your business premise.

SAP acquired SuccessFactors in 2011. It is a cloud-based solution offered on SaaS (Software-as-a-Service) model. The software is hosted by SAP and you don’t have to keep it on your business premises.

  1. Key Features

SAP HCM offers various modules related to HR including Organizational Management, Personnel Administration, E-Recruitment, Time Management, Payroll and Reporting etc.

SAP SuccessFactors has a slightly different architecture and offers modules including Employee Central, Employee Central Payroll, Time and Attendance, Recruiting, Onboarding, Performance and Goals, Compensation, Succession and Development, SAP JAM etc.

SAP HCM vs SuccessFactors: The Key Differences

Gemini Consulting & Services can help you make an informed decision in choosing the right HCM platform for your business and then implementing it. We are a global SAP partner and have built considerable expertise and authority over various SAP products. Our experts will recommend you the best solution through a comprehensive need discovery process and customize and implement the solution. Contact us to know more about our services.

As we see both the SAP products offer more or less similar features, there are a few key differences which you must know and consider while selecting a solution for your business.

  1. On-Premise vs Cloud: SAP HCM is on-premise while SuccessFactors is a cloud-based solution. If you choose SAP HCM then you have to keep all of the IT infrastructure onsite and manage it either on your own or hire a vendor. SAP SuccessFactors is housed offsite with SAP responsible for monitoring and maintaining it.
  2. Features: In terms of HR features, SAP SuccessFactors provides a full suite of HR functionalities which makes it a one-stop platform for your HR team. It enables cross-module reporting and analytics. There are few features missing in HCM, especially in Talent, that are available in SuccessFactors.
  3. Customization: SAP HCM offers good customization features to businesses whereas SuccessFactors is built on standardized best practice methodology with some customization choices.
  4. Maintenance: SAP HCM being an on-premise solution requires resources and is costly to maintain. There is also reliance on the IT team to manage it. In comparison, SAP SuccessFactors is easy to maintain.
  5. Scalability: In general, a cloud-based solution offers greater flexibility in scaling up/down your requirements. You can easily increase or decrease levels as per your needs.

The SAP HCM and SAP SuccessFactors offer very similar features and functionalities. The SAP HCM software is highly customizable and can meet your business specific needs in an efficient way as compared to SAP SuccessFactors.

However, SAP SuccessFactors scores on some features, maintenance and scalability which are also key considerations, especially for medium and small businesses. So, ultimately it boils down to your business needs, budget, and other choices like scalability etc., to choose between SAP HCM and SuccessFactors.