Back in 2003 for the inaugural issue of HR Expert I wrote an article about seven ways that SAP Payroll implementations go wrong. It's been a long time since then, and SAP Payroll implementations are still going wrong. The software has changed, and I've learned more. So here's an updated version of that first article.
All too often as consultants we end up configuring the same process for each customer because the SAP payroll software doesn’t provide it. For example, in the US we setup stock option processing for most every customer. In Brazil it might be Vacation Scheduling, or electronic payslips in Argentina. Every country has some examples of these common processes companies require that are not fully delivered with the software.
So in my previous blog I established that Future Payroll is smart. It has a lot of business content, it tells you about how it is setup and put together. It knows about all the compliance-related things, and it makes sure you are doing payroll right. So with all that knowledge built in, let’s have Future Payroll do more of the configuration and setup work for you. Again, an example will make it clearer.
What does a smart payroll system look like? It has a lot of business knowledge built in to it that users can leverage to get their work done, and to ease the implementation process. Sounds good, but what does that mean in practical terms, and why do we need it? Let's dig into a bit of that. 
I like SAP R3 payroll, with all its strengths and weaknesses. But I’m ready – the industry and customers are ready – for a new payroll. I’m calling it Future Payroll.
Future Payroll has to be new, from the ground up. R3’s foundation of schemas, rules and wagetypes is great. It’s powerful when you know how to use it, but it’s also antique compared to what we have available today. Maybe more important than the technical foundation is what the business value, the end-result needs to look like.
Are they skills and methodology? Are they consulting experience and thorough testing? Are they change management and integration? Well, those are all important and failing in any of them will seriously damage your project. But there are two that rise above all those: Leadership and Execution.
I've been working with SAP's payroll since 1993. When I was trained, R3 didn't really exist so I was trained on R2 payroll - oh, those were the green screen days. And I was around to see and participate in the development and roll out of R3 payroll for the US. Oh, those were some days.... So now with the end of R3 coming in 2025 (as announced so far), and everything moves to SuccessFactors except payroll (I don't count EC Payroll as a cloud offering since it's a dressed up R3 Payroll), people wonder just what is up with the he future of SAP Payroll. It's a good question.
Since my earliest days working with SAP's Payroll module I've used a certain structure for the payroll calculation schema that gives customers more flexibility than what's delivered out of the box. It's pretty simple, decreases maintenance effort and improves the quality of your testing, Who wouldn't want that?
A while ago we had dinner at one of our favorite restaurants, but this time we sat at their kitchen-bar. Their kitchen is open for the patrons to see, and if you want an up close view of it you can sit at a bar that is adjacent to the line cooks. As someone who loves good food, and loves to cook good food, this was a real treat! We arrived early, so we got to see the kitchen go from relaxed to frenetic. I didn’t expect to gain some consulting insights from the evening, but I did.
One of the curious things in life is that what might appear to be simple, is really more complex than it seems. We can look at the recruiting process, for example: We need to fill a position so we tell HR, they post some ads and work with recruiters to get us a list of candidates, we interview them and hire one. Those in HR know the process is much more detailed and complex than that, but if you’re not the process owner then you don’t really ever get an appreciation for those details and complexity. The same goes for my favorite function – payroll.