Key SAP HCM items during a merger or acquisition – Part 2

By Posted November 2nd, 2012

Note:  The following is the second of a two-part blog post. You may read the first half of this post here.

So are you still with me?  Great!  You’ve got your “Business Consolidation Planning and Execution Approach” in place and approved by the executives.  You know what your functional scope is and you have figure out what business process reengineering is required.  And you understand what needs to completed with regard to the system configuration implications and integration.  It looks like you are moving down the right track. However, before you move too far ahead, there are a few more things to consider.

Part two of this blog outlines the following topics and how they need to be addressed in any SAP HCM merger or acquisition scenario:

  • System configuration implications and integration
  • HR data governance
  • Resource assessment and alignment

System Configuration Implications and Integration

Getting a handle on how complicated the system configuration is in both environments is probably easier than most people think.  Why? Because the system never lies.  All of the configuration values, custom infotypes, features, functions and programs are right there for any competent SAP HCM functional or technical person to see.   However, you will definitely need tools to accelerate this process.  SpinifexIT’s Easy Reporter and Easy Clone were designed to assist in this highly critical area of the SAP HCM consolidation and these solutions can be used by HR business users or IT functional/technical consultants without having to create custom code or reports.

The determination of what the new consolidated system enterprise structure or subtype values will be is the biggest challenge.  The tendency will be to think that you can just slam the two systems together and that might work for basic reason codes, but you will have to do your homework when it comes to date types, work schedules, employee groups, and subgroups.

Another critical area is aligning and redefining interfaces to either internal or external systems.  Once again, SpinifexIT solutions can streamline this process because they are embedded with your SAP HCM environment and allow HR business users to create the functional version of the interface without the assistance of IT resources.

Have you determined your plan regarding consolidated reporting – especially year-over-year comparisons – once the system has been redesigned and implemented? This is always an area that gets pushed back or forgotten during the system merger project because everyone just wants to make the system work correctly first (“we can worry about reports later”).   Look to Easy Reporter to help in this area during the M&A process and in the future because information provided by reporting and analytics is the only way many executives evaluate the success of the consolidation.  If executives and management can’t get the information that they need to make decisions, they will consider your part of the consolidation between companies to be a failure.

HR Data Governance

SpinifexIT defines and divides HR data governance into the following three areas:  completeness, quality and compliance of all related HR data. In other words, the SAP HR data is in the system, correctly, and adheres to governmental or organizational requirements.  Regardless of which HR software is used, these three aspects must be completely achieved in order to have a successful level of data governance as it relates to Human Resources.

This is the backbone of how the success of your SAP HCM system consolidation will be evaluated.  Let’s face it – if you get the consolidation done on time and on budget and the information is wrong, you can equate yourself to the surgeon who says, “The operation was a success but the patient died!”

The master SAP HCM system must have pristine data that is not only complete, but validated by employees, managers, executives and HR practitioners.  Employees should be involved so that they know that they are correctly reflected in the company and receive appropriate entitlements (e.g., salary, benefits, vacation, etc.).  Managers are important because they can make appropriate tactical decisions and recommendations for their direct reports on a daily basis.  Executives validate data for strategic decision making so they can look at information holistically and operationally and determine future needs for the organization.  HR uses data for policy and procedural decision making and for the ability to look at opportunities for improvement in all aspects of HR and even operational business processes and evaluate trends (e.g., turnover rates, absenteeism, benefit claims, etc.) which could require preventative or corrective action on behave of the organization.

Ultimately, without this information being correct the upstream and downstream effects of incorrect, inconsistent and even missing data will drive the process the technology was intended to improve to a grinding halt.

SpinifexIT applications are specifically designed to address this issue by creating detailed HR/Payroll reports that incorporate all the appropriate information from various aspects to validate that your system is in compliance.

Easy Reporter provides HR departments with the ability to run specifically designed reports to evaluate the completeness, quality and compliance of all related SAP HR data.  Easy Reporter greatly extends the capability of existing SAP HR/Payroll solutions so that end users can develop custom reports and utilize a suite of entirely new reports that cover virtually all employee reporting needs.

Resource Assessment and Alignment

Although not your primary concern on day one, you do need to investigate resource alignment from two perspectives.  Tactically, you will need to look at the resources in both companies to see who is best qualified to help you achieve your goals during the consolidation of the two systems.  Simultaneously, HR will need to do a full assessment of all resources and skills within both organizations to determine the overlap and redundancies that exists.  Whether we like it or not, staffing reductions are the fallout of mergers and acquisitions and HR must have the most accurate data to make those assessment and recommendations.  Having Easy Reporter available in both environments will allow those HR business users to get that information in a timely and confidential manner and compare the results in a highly effective manner.