Implementation of SAP HCM Payroll for 65000 employees by in-house team

Customer
Eurasian Resources Group
Project manager on the customer side
Rustem Uvaliyev
Head of Enterprise IT architecture
IT Provider
Business & Technology services (part of ERG)
Year of project completion
2023
Project timeline
October, 2021 - June, 2023
Project scope
20310 man-hours
Goals
Implementation of a unified remuneration system and SAP HCM Payroll functionality on the SAP S4/HANA platform by automating the process of “Payroll calculation (accounting for mutual settlements with personnel)” for enterprises in the Kazakhstan region Eurasian Resources Group (ERG) by 01/01/2023.
Enable: a unified methodology for calculating wages (regular wages, shift accounting, piece work payment, additional allowances, employee loans, etc.); uniform system configuration across all assets; linking the functions of personnel accounting and payroll; elimination of double entry in personnel accounting systems and payroll systems; implementation of regulatory and mandatory reporting.

Project Results
As the result of this project, ERG could achieve:
  • True unification of the process across all business entities
  • Significantly increase quality of HR data for 65000 employees
  • Increased performance of HR operations staff
  • Automated provision of HR services such as payslips, employment certificates, calculation of remaining vacation dates, etc.

The uniqueness of the project

A big audacious ambitious goal, a “BHAG”, an ambitious deadline, an ambitious project – these are the synonyms for the SAP Payroll project at the ERG group of companies from the very beginning. In itself, the implementation of the SAP HCM Payroll functionality is not an exclusive and unique task, but the conditions in which the project’s goal was achieved within the set period make it reasonable to consider it unique. Indeed, one does not have to be an innovator to be unique.
Just 15 months from start to go-live, including transformation of processes, unification of reference books and algorithms for 35 enterprises of the Kazakhstan ERG region. Designing a new solution based on the functionality of SAP HCM Payroll in parallel with the separation of the existing functions of SAP HCM organizational design and personnel accounting from the SAP ERP system into a separate system. Pilot operation using the example of calculation of 2 months in parallel with the current calculation in historical systems. On top of that the launch into commercial operation with a “big bang”, for 35 enterprises and 65,000 staff simultaneously.
The whole project was carried out by a core in-house team without involvement of third-party partners.

Used software
  1. SAP HCM (Human Capital Management) S/4 HANA,
  2. SAP Process Orchestration 7.5 integration bus
  3. Integration with the following systems:
  • SAP ERP,
  • Personnel document management system,
  • Several instances of 1C systems of different versions,
  • Master Data Management (MDM) system,
  • e-Timesheets (system for recording working hours data and coordinating employee timesheets),
  • Employee meals accounting system,
  • MyERG (enterprise mobile application).


Difficulty of implementation
The main difficulties we encountered:
1) At the input of the project, there are heterogeneous processes of personnel accounting, time tracking and salary calculations and heterogeneous historical systems - 12 different systems and configurations at ERG enterprises;
2) Designing a solution based on the functionality of SAP HCM Payroll and starting to implement the solution in parallel with the separation of the existing functions of SAP HCM, organizational design and personnel records from the SAP ERP system into a separate system with the transfer of all historical data;
3) A large number of integrations, including with numerous configurations of financial accounting systems;
4) A large number of developed reports and output forms;
5) Poor quality personnel records, which are the basis for salary calculation processes. It was necessary to normalize the data before launching the solution;
6) Difficulty in accessing end users for pilot operation and training due to their operational tasks;
7) Huge amount of data to migrate.


Project Description
The main objective of the project was the implementation and launch into operation of a solution that guarantees the accuracy of all wage calculations and payments for each of the 65,000 employees of the enterprises of the Kazakhstan Eurasian Resources Group (ERG) region, allowing to manage gross and net wages from a single source of truth, taking into account all benefits and deductions and providing 24/7 access to all payroll transactions.
As prerequisites for automation, two large-scale and significant tasks were completed within the project.
  1. First is the development of a methodology for a unified remuneration system for ERG Enterprises, with the revision and transformation of business processes for personnel accounting and working hours recording, the construction of salary calculation processes, the unification of order templates, catalogs of working time schedules, absences and presences, types of payments, accruals and deductions, thereby ensuring compliance with all norms of labor legislation of the Republic of Kazakhstan.
  2. The second prerequisite is the separation of the previously implemented functionality of SAP HCM organizational management, personnel records and time tracking from the SAP ERP system into a separate SAP HCM system on the SAP S4/HANA platform, and as a result, providing a platform for automating the process of calculating salary with reliable protection of personal data and confidential information.
Among the implemented functions, it is also worth noting the integration with the “e-Timesheet” system, which, without the cost of licenses for timesheets, solved the problem of obtaining, within the scheduled time frame, an agreed upon fact for recording working hours, as a necessary component for calculating the salary. By implementing a user interface for receiving a payslip from SAP HCM Payroll in the MyERG corporate mobile application, one of the most important points of interaction between employer and employee was achieved.


Project geography
ERG enterprises in the Republic of Kazakhstan - 35 enterprises, with a total number of 65,000 employees.
Additional presentations:
SAP Payroll - project brief.pdf
The winners of the Project of the Year 2023 competition are IT leaders from India, Malaysia, Turkey, Kazakhstan, Uzbekistan, Kyrgyzstan, Armenia, Iraq and Brazil. 

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