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On-premise SAP Payroll customers set to stay on-premise

On-premise SAP Payroll customers set to stay on-premise 627 314 SpinifexIT

Recently, a research survey was conducted by SAPinsider across a large number of SAP HCM customers. Out of this were many interesting findings, and over the coming weeks, I will share some of these with you.

SpinifexIT Darren Souter
Darren Souter

SpinifexIT Solution Architect

One of the more surprising numbers was related to the plans for moving from the On-Premise solution. As many of you would be aware, SAP has now determined that the current SAP On-Premise ECC solution will be supported until 2027 (with extended paid support until 2030). This gives only 6 years of time to make a decision on what to do and to actually then move to an alternative solution.

As you can see from the following survey result, just over 60% of customers have no plans to do anything for the moment and to remain on-premise.

Approximately 25% are planning to move to the cloud, which means they will migrate to the Employee Central Payroll (ECP) platform. With this number and the 60% continuing to make no decision, the SAP Payroll Platform remains a very powerful and good option for most customers – especially those who have international Payrolls with multiple countries needing to be paid.

The remainder of these customers will be looking to outsource their payroll to one of the other payroll vendors. 

This, however, doesn’t mean the customers are moving away from SAP, as many of the vendors out there are using the SAP Payroll Solution as the base of their outsourced payroll offering.

From this chart, I can make a few additional observations

  • The insight here is that the SAP Payroll remains a robust and future-proofed solution with the majority of customers not planning to move away from this solution.
  • The vast majority of customers are wanting to keep payroll processing in-house. I believe for many customers, this makes sense as the core business rules and knowledge around the payroll remains close to the business

I feel that many of the customers who are undecided may make more concrete decisions over the coming months or years, once SAP releases more details about the options for migration to the S/4HANA solution for those who want to remain on-premise (this solution will be supported by SAP through to 2040).

This is just one part of the SAPinsider Report, so I would highly recommend reading this to understand the market better and to even compare your own situation to other SAP customers. There is no cost to receive this report, you just have to register.

Stay tuned for Part 2 of the SAPinsider Survey insights series!

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