In my previous posts I talked about declustering and the benefits for HCM on SAP HANA. In this post I will explain how we leverage this declustering functionality in our latest innovation: the SAP Payroll control center add-on. This will be the first wave of UX and process innovation for payroll. This blog talks about the second wave: The new SAP HCM Payroll experience (HR Renewal 2.0 FP1). Now back to the first wave:
A bit of background
It is undisputed that SAP offers the best and broadest payroll functionality in the market. The solution is used by ~7600 customers and the largest BPO providers of all sizes and in all industries all over the globe. SAP Globalization Services and SAP Partners are offering a localized payroll in 53 countries that can be run from a single instance.
Currently for these customers the end-to-end payroll processing time is many days in which most time is spend on analyzing payroll master data that goes into the payroll and reconciliation activities that take place after the payroll has run. The data is scattered over different (wage-type) reports. Many of these reports run over-night in batch processes which increases the end-to-end payroll cycle time.
The new SAP Payroll control center add-on provides a fundamentally new approach in which potential issues are pointed out in real-time by the application rather than payroll administrators digging through information and trying to find issues themselves. With this functionality payroll administrators only need to focus on issue solving and this saves payroll departments a lot of valuable time.
How does it work?
During the preparation of the payroll there are a lot of validations on master data executed by payroll administrators. They make sure that information like tax info, missing address info or any other payroll relevant information is valid or corrected before the payroll runs.
And after the payroll has run these payroll administrators make sure the results are correct before the actual pay-out. That means that they run analyses like:
- Gross variance deviation of 10%: this identifies employees with a 10% or more deviation in their current salary compared to their last salary;
- Zero Net: this identifies active, inactive and withdrawn employees who will receive “zero net” pay out;
- Excess Net: this identifies employees with a net pay over a specified tolerance;
- And many many more.
Currently there are a lot of different reports created for these analyses. These can now be converted in so called ‘validation rules’ that run in the SAP Payroll Control Center. Via these validation rules potential issues will be pointed out by the application. The validation rules ‘framework’ can encapsulate almost any type of master data and reconciliation analysis that is required.
How does it look like?
When a payroll administrator logs on to the application there will be an overview all payroll areas he or she works for. the image below shows a payroll area overview and below the payroll areas there are 5 tiles that all have a unique process purpose. In the example below there are process tiles for master data quality, pre-payroll validation rules, errors from the payroll run, payroll validation, and post processing.
When a payroll administrator clicks on a tile there is a structure with different groups (folders) to which the validation rules can be linked. In the example below there are master data validation rules linked to the selected Data consistency group that run as part of the Master data quality process step (from the first image). 
The payroll administered can branch through the groups to see which validation rules are pointing out potential issues. In the following image you can see how the group ‘Master data change’ contains validation rules that track missing hiring information, or missing data from employees that left. The validation rules framework can encapsulate any type of master data check that is required.
What is so unique?
What is fundamentally different to this application is that all potential errors will be pointed out by the SAP Payroll Control Center rather than payroll administrators digging through loads of individual reports. This is really a big ‘time saver’
The following images will explain how. In this payroll validation example the payroll has run and there are 12 potential issues pointed out by the business rule that Identifies employees with a 10% or more deviation in their current salary compared to their last salary.
When the payroll administrator clicks on the gross variance rule this opens up the following screen:
On the left side of the screen there are 12 employees with potential employees pointed out. The right side of the screen shows an overview of the employee and the variance for this employee. Robert is about to receive 16,61% more salary compared to the last cycle. This comes down to €669,50.
When the payroll administrator clicks on the Details button the following is displayed:
This immediately shows the reasoning why Robert will receive more payment. He had 17,36 hours overtime and he received a project bonus. This already saves the payroll administrator lots of time.
The payroll administrator can pull up a brief card that provides more info on the employee:
This card can for example contain information on Robert’s eligibility to work overtime. After evaluating the payroll administrator can rate Robert’s case as correct, or the payroll administrator can reach out to the manager for the necessary corrections. The status functionality at the bottom can be used to set Robert to green and to make sure Robert does not show up on this list anymore for this scenario. These status change actions are logged and auditable in the back-end system.
The beauty of the application is that the potential issues brought up by the validation rule can be different for each case. In the mock up below Corinna (number 2 in the list) is shown with other wage types that cause the issue:
In the customizing of the application the different tiles, group folders, validation rules, header information & status reasons per business rule can be set up. The validation rules require a bit of programming to make sure the application provides the results that are required. This makes the solution highly flexible and ensures it can handle all analyses that are required from pre-payroll to the post-payroll process.
How does it all fit together?
The SAP Payroll Control Center is developed in the latest HTML5 technology and will be delivered as part of HR Renewal 2.0 (http://help.sap.com/hr_renewal). Payroll Administrators can launch the SAP Payroll Control Center via a small lane in the HR Renewal screen. Customers that do not have HR Renewal implemented can embed a link in their portal or SAP ECC HCM system.
The SAP Payroll Control Center points out which master data and other corrections need to be made before the payroll can run. These master data corrections can be made in HR Renewal applications or in SAP ECC HCM. Then the payroll can run and when the program is ready the SAP Payroll Control Center points out the potential issues that need to be evaluated and possibly corrected. This can again be done via HR Renewal or the SAP ECC HCM application.
The following graph displays the screens:
What are the technical prerequisites?
Customers can start using the SAP Payroll Control Center when they have SAP ECC HCM on Enhancement Package 7 and they have their SAP NetWeaver on the 7.4 release. The payroll data on which the validation rules are running is stored in the declustered tables. Therefore the declustering Business function must be switched on (HCM_LOC_CI_50).
In addition, SAP recommends the usage of SAP HANA due to the performance improvement and the ability to build complex validation rules. SAP Payroll Control Center also runs on non-HANA databases, however when data is declustered on a non-HANA database this results in factor 2-5 times larger data size. That is challenging on traditional databases and this also results in a situation in which it’s not possible to create validation rules with the complexity that most customers require.
SAP HANA can be used in 2 deployment options, which our outlined in the following graph:
In the case of a side-by-side scenario the SAP Control Center leverages (master) data coming from the SAP ECC HCM system plus data from the declustered tables on SAP HANA. In the configuration of the validation rules there is a special field in the configuration table in which it can be specified on which system to run them.
How can you start?
This is a step-by-step guide on how to install the SAP Payroll control center add-on:
1. Download the software (HR renewal 2.0). Import the transports; check that there were no critical import errors on the transports.
2. Check that the following packages are installed in the abap application sever:
- PAOC_PAY_PYD
- PCPYD
- PCDCT
- PCTRRES
3. Activate the following business functions:
- HCM_LOC_CI_62 - Payroll Data Source Framework
- HCM_LOC_CI_63 - authorization framework
4. Set up the gateway server. To install and set up the gateway server on your system landscape (if not already done), please refer to the following SAP Gateway guides: http://help.sap.com/saphelp_gateway20sp05/helpdata/en/82/4ad13ee9dd4d4a88e1ef8712e33aee/content.htm
In the SAP NetWeaver Gateway system, you activate the required OData services in Customizing for > SAP NetWeaver Gateway > oData Channel > Administration > General Settings > Activate and Maintain Services.
- Application: Payroll Control Center
- Technical Name of Application: HRPY_COCKPIT
- OData Service (Maintain in SAP NetWeaver Gateway system): Payroll Control Center PYD_FRW_SRV; PYD_CONT_SRV
5. Set up the SAP UI5 service: Go to the SICF transaction and activate the payroll control conter add-on (cockpit) UI5 services.
Configure ICF (Internet Communication Framework) nodes for the Payroll Cockpit as follows:
- In your SAP ABAP back-end system, access the Maintain Services (SICF) transaction and choose Execute > The Maintain Service screen appears > Choose default_host - SAP - bc - bsp - SAP, select the following services:
- HRPY_COCKPIT
- HRPY_COCKPIT_XX
- Activate the above services (either via right-click of the mouse and Activate Service or in the menu under Service/Host -> Activate).
- Choose default_host - SAP - bc - ui5_ui5 - SAP, select the following services:
- HRPY_COCKPIT
- HRPY_COCKPIT_XX
- Activate the above services (either via right-click of the mouse and Activate Service or in the menu under Service/Host -> Activate). More information about transaction SICF can be found here: http://help.sap.com/saphelp_nw70ehp1/helpdata/en/46/d28dfa34bb12bee10000000a1553f7/content.htm
In order to develop content in the SAP Payroll control center add-on framework SAP delivered a note with important information on how to develop it. For more information please check Note 1995698 "Validation rules for Payroll control center - Setup and example". In addition, SAP delivered a rapid-deployment solution (RDS) with best practice predefined validation rules for customers that want to accelerate their implementation. This RDS is free of any license charge and can be implemented by SAP Consulting and/or SAP Partners. This blog explains how to best implement it: A best-practice to implement SAP Payroll control center add-on
Is this also available in the cloud?
This functionality is available for Employee Central Payroll customers since the 1411 release. Check this video: SuccessFactors November 2014 Release Highlights - YouTube
Closing comments
For the development of this functionality we have been talking to many of our largest customers with the most complex payrolls. All these customers agreed that this new functionality will meet their (diverse) needs and that it will result in significant time savings. Therefore, the only thing to be aware of is that you have to think in advance what you will with your new free time and without the current stress :wink:
For more information on HCM on HANA please check these Fact books: http://www.saphana.com/community/learn/solutions/sap-business-suite-on-hana/fact-book
Looking forward to your feedback. And if you have any questions feel free to contact me.
Frans Smolders
Frans.smolders@sap.com
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