Why Human Capital Management Is Important in SAP by TechFunnel

Why Human Capital Management Is Important in SAP

Why Human Capital Management Is Important in SAP

The relationship between modern human capital management (HCM) and systems, applications, and products (SAP) is more than just acronyms and business jargon. SAP is playing a huge role in how companies handle human capital management. SAP technology has also grown significantly by adding HCM capabilities.

SAP is one of the largest software companies in the world. The company was founded in 1972 and is primarily known for its enterprise resource planning (ERP) software that helps businesses connect systems across enterprises, including finance, logistics, distribution, and inventory. Businesses who use a holistic, end-to-end solution like an ERP have found that they experience more accurate inventory control, smoother transport and distribution, and a better overall picture of incoming revenue and outgoing expenses for a clearer understanding of the financial aspects of the business, all in real time.

Exploring the relationship between HCM and SAP

While ERPs, and SAP specifically, has helped to revolutionize how businesses handle their product distribution, data handling, and financial reporting, SAP has also helped to change and modernize human capital management through another comprehensive planning and reporting software, specifically for HR.

The capabilities of the SAP HCM software are extremely beneficial to businesses and help to streamline all processes pertaining to employment, including the tasks of recruiting and hiring.

Here are some of the important modules of human capital management in SAP software:

  1. Organizational management: This feature primarily focuses on assisting businesses with workflow management. Analytics allow for leadership and HR teams to track the staffing needs of the company. For instance, if there are seasonal peaks that affect distribution, it’s key to be able to predict these and appropriate schedule staffing. SAP gives HCM teams the ability to more strategically plan their workforce needs.
  1. Payroll: Payroll is one of the core human resource functions and is essential to successful overall human capital management. SAP provides solutions that enable comprehensive payroll distribution, benefits, insurance, taxes, and more, all tying into financial accounting systems.
  1. Scheduling and time management: Employee record keeping is an essential part of human capital management and SAP gives organizations an integrated solution for managing data related to time off requests, hours worked, available PTO, attendance, and more.
  1. Team and personnel management: This function can relate to the building and maintaining of a team and help to support recruiting, onboarding, and even performance management, which tracks reviews, goals, and compensation increases.
  1. Development and training: One of the keys to retaining talent and avoiding the high costs and low output of turnover is using employee feedback to better the employee experience. SAP HR software helps businesses to develop better business processes to advance the organization, as well as help implement development, training, and educational opportunities for employees. Employee development benefits the business through increased productivity and increased job skills, and it benefits individual employees by engaging and valuing them as assets.

HCM is made up of a lot of data, organizing, and analytics, so the need to have a central hub for information and analysis is clear. A human capital management solution like the one created and administered by SAP has the potential to save both time and money for businesses, meaning it could become an important part of their overall strategy.

A successful HCM plan can help increase business collaboration and productivity, as well as help retain top talent. This is one reason successful businesses take their HCM process seriously. In fact, SAP reports that businesses that employ one of their solutions experience 32% less turnover.

Additionally, SAP has seen a bump in business subscribers from their SAP HR software solutions, making human capital management in SAP an important part of their overall business. With its expansive capabilities, SAP has an opportunity to assist HR departments and whole companies with better HCM practices and policies.

Marianne Chrisos
Marianne Chrisos
Born in Salem, Massachusetts, growing up outside of Chicago, Illinois, and currently living near Dallas, Texas, Marianne is a content writer at a company near Dallas and contributing writer around the internet. She earned her master's degree in Writing and Publishing from DePaul University in Chicago and has worked in publishing, advertising, digital marketing, and content strategy.
    Top