When organizations move to SAP S/4HANA, one of the biggest HR technology decisions they face is whether to continue with SAP ERP Human Capital Management (HCM) or adopt SAP SuccessFactors.
Both options offer human capital management capabilities, but their long-term strategic value differs. SAP has positioned SAP SuccessFactors as the go-forward HCM solution for SAP S/4HANA, while SAP HCM for SAP S/4HANA remains available for customers who need more time to transition. In this post, we’ll compare the two, explore integration scenarios, and highlight what each path means for HR and IT leaders.
SAP’s HR Strategy for SAP S/4HANA
From SAP’s perspective, SAP SuccessFactors (as opposed to an SAP S/4HANA version of SAP ERP Human Capital Management [SAP ERP HCM]) is the go-forward human capital management (HCM) solution for SAP S/4HANA and the go-forward solution for the HR category within SAP’s diversified cloud strategy. With adoption of the SAP HANA platform for foundation, integration, analytics, and application development, and with SAP Fiori for UX, the SAP SuccessFactors suite is the firmly established solution in the SAP solution portfolio and the future SAP S/4HANA roadmap.
SAP S/4HANA delivers significant simplifications and innovations compared to the previous-generation SAP ERP solution in which the SAP ERP HCM component resided. After the acquisition of SAP SuccessFactors, the adoption has quadrupled for SAP customers using SAP SuccessFactors. This originally led to the strategic direction from SAP not to do a simplification or add additional new functionality in SAP ERP HCM. SAP now offers the HCM functionality via SAP Human Capital Management for SAP S/4HANA (SAP HCM for SAP S/4HANA), which we’ll outline later.
Integration Between SAP SuccessFactors and SAP S/4HANA
The SAP SuccessFactors solution can be integrated easily from the data and process perspective with on-premise and other cloud systems via prepackaged and SAP-maintained integrations, predefined integration templates, and APIs and custom integrations.
Although customers have multiple options available for integrating SAP SuccessFactors with other solutions, SAP’s preferred solution for SAP SuccessFactors integration middleware is SAP Integration Suite, an integration platform as a service (iPaaS) specifically designed to support integration of SAP’s range of cloud solutions with other on-premise and cloud systems. SAP is significantly investing in extending the range of prepackaged integrations with SAP cloud applications and other vendors’ solutions. As illustrated in the figure below, a set of integration content is currently available for the integration of SAP S/4HANA Cloud and SAP SuccessFactors to serve the integration of employee and employment data, as well as payroll data.
When to Choose SAP SuccessFactors
For companies using on-premise SAP ERP HCM that want to implement talent management solutions, SAP SuccessFactors should be the first choice. For companies that want to implement an HR information system with SAP, the SAP ERP HCM on-premise solution is still a viable option (i.e., it will still be tweaked for specific industry regulations, compliance localizations, and language support); however, from the long-term strategic perspective, Employee Central is a safer route.
In the end, companies that want to implement SAP S/4HANA or SAP S/4HANA Cloud that also require an HCM suite will likely focus on the SAP SuccessFactors solution due to the current and planned SAP investment level and innovation in cloud HCM solutions, as follows:
- Prepackaged integrations are available now via SAP Signavio Process Navigator.
- Companies that want to implement SAP S/4HANA are using SAP ERP HCM on-premise and aren’t yet ready to implement SAP SuccessFactors can continue to use SAP ERP HCM running in a separate instance or a single instance together with SAP S/4HANA. SAP has plans for prepackaged integrations to enable both scenarios.
- One SAP roadmap for SAP S/4HANA Cloud and SAP S/4HANA integration continues to expand in the areas of employee integration, time sheet integration, and total workforce integration with SAP Fieldglass, Employee Central, SAP ERP HCM, and SAP Ariba for the integration of contingent workforces.
SAP Human Capital Management for SAP S/4HANA
As an outcome of several customers’ requests, SAP supports customers that aren’t able to quickly change the adoption path to SAP SuccessFactors as a cloud solution and offers an SAP HCM for SAP S/4HANA alternative. From a scope perspective, it covers the key functionality of SAP ERP HCM and SAP S/4HANA compatibility packs without any significant functional additions. The transition requires an SAP HANA database and a license conversion. Migration tools and services are provided from the different starting points into the target release.
Conclusion
SAP customers face a critical choice when modernizing HR alongside their S/4HANA journey: stay with SAP HCM for SAP S/4HANA or move to SAP SuccessFactors. While the on-premise HCM option offers continuity for organizations not yet ready for the cloud, SAP’s investment, innovation, and roadmap clearly favor SuccessFactors. With prepackaged integrations, expanded employee and contingent workforce support, and deep alignment to SAP’s cloud strategy, SuccessFactors represents the future of SAP HCM. For organizations planning long-term HR transformation, SuccessFactors is the safer and more strategic path.
Editor’s note: This post has been adapted from a section of the book SAP S/4HANA: An Introduction by Devraj Bardhan, Axel Baumgartl, Madalina Dascalescu, Mark Dudgeon, Piotr Górecki, Asidhara Lahiri, Richard Maund, Bert Meijerink, and Andrew Worsley-Tonks. They are are a multinational author team working for IBM, SAP, and Accenture. They have
been working with SAP S/4HANA since its first release.
This post was originally published 10/2025.
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