The Edge: Human Capital Management Newsletter - Winter 2008Giving you a market edge |
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It is with great pleasure that I welcome you to the first issue of The Edge, a quarterly electronic newsletter from the Deloitte SAP service line that is specifically focused on HCM topics. Our goal is to provide you with timely and relevant information on human resources (HR) strategy, operations and technology.
Our mission is to keep you “in the know” on leading issues that impact your business and alert you to upcoming HR conferences and Webcasts that support the effectiveness of your service delivery, processes and management systems (whether SAP-based, or not). We will also run features that highlight Deloitte’s practices and tools that are designed to help you accelerate SAP HCM initiatives in your organization and realize their benefits and value faster than ever.
We believe The Edge will become a useful resource for you as you manage the many challenges facing HR departments today. Thanks in advance for giving us the time and opportunity to share our latest thinking with you and perhaps others in your company.
Best regards,
Emmanuel C. Ramirez
Principal, Human Capital Services
Deloitte Consulting LLP
A client’s perspective: The power of great teamwork
By Anna Majchrowicz
HCM Time, Disability & Pay Team Lead
Southern California Edison
I am very pleased to report that four months into post “go-live,” our Time & Pay implementation has proven to be quite successful. Admittedly, there were a few “elusive” requirements that seemed to have been missing during Blueprinting, but we are overall very pleased with how everything has gone.
The key, I believe, is that we had a good team, representing both sides of the effort, Edison and Deloitte, and a shared commitment and dedication to success. So far, that success has included meeting payroll processing timelines from the first payroll run and achieving relatively the same number of off-cycle requests as we did in the legacy system after the sixth biweekly payroll in SAP. In addition, we continue to fine tune configurations associated with our collective bargaining agreements and our rather complex, self-administered disability plan. Furthermore, our Third Quarterly Tax Reporting, the first filing in SAP, is one of our more recent positive achievements.
In order to help ensure ongoing success beyond these early stages, we continue to train and reinforce process and procedures through knowledge transfer sessions from the core project to the support organization and the business units.
There is no doubt in my mind that our successes through go-live and during the post stabilization period could not have been achieved without the dedication and commitment of the knowledgeable and experienced Deloitte team. In fact, our relationship with the Deloitte team members has evolved in such a way that all the actions are transparent and point to a shared set of objectives and a common sensitivity to change. Thanks to all who have been involved!
Put HR transformation support in high gear
If you are interested in learning how to jump-start your HR transformation efforts with a technology-enabled solution, then now is the time to find out more about HR FastFoward (HRFF), a service offering that combines the latest elements of SAP HR technology with Deloitte’s in-depth Human Capital experience, knowledge and skills.
Today’s HR executives face extraordinary challenges associated with keeping traditional HR services running smoothly while also positioning themselves to play an expanding role in key strategic areas of their overall organization, such as achieving talent management and performance improvement objectives. HRFF offers them the speed of technology combined with the proven effectiveness of our Human Capital professionals’ comprehensive capabilities gained from years of experience. Together, these groups have created a practical, scalable approach to generating HR transformation value quicker.
In a nutshell, HRFF takes the guesswork out of leveraging SAP HR functionality to enable business-driven HR processes. We have found that when an organization combines strategic processes with a core set of standardized HR practices—and then enables them all with SAP HR functionality—they can achieve a faster return on their investment and show value quicker both in transactional and strategic areas.
Deloitte author demystifies SAP ERP HCM organizational management
Want to get more value from your SAP enterprise resource planning (ERP) HCM organizational management (OM) implementation? Sylvia Chaudoir has just released "Mastering SAP ERP HCM Organizational Management." Published by SAP Press, the book goes beyond the basics and delves into the key OM functions, their purpose and how to use and customize them. Visit Deloitte.com to learn more or request a copy.
Sylvia Chaudoir, a specialist leader for Deloitte Consulting LLP in the Human Capital Service Area, has worked with SAP HR since 1994 and has expertise in several SAP HCM functional areas, including Personnel Administration, Organizational Management, Benefits, Time Management and U.S. Payroll.
Payroll Year End - Are You Ready?
By Kevin Gao
Payroll Year End is fast approaching, and payroll practitioners are getting into their busiest season of the year.
This year, since SAP will not be providing any “year-end angels” or support programs, you will need to visit SAP’s Service Market Place and do it yourself. Are you ready?
If this reality finds you very determined, but unsure of what to do next, let’s conduct a quick check to see where you are and then get up to speed. Start by running your W-2 and Fourth Quarter 941. Add up all four quarters of 941 taxable and tax. Do they match total W-2 wage and tax?
Depending on your outcome, here’s how you can best use the content of this article:
- If you can’t successfully generate W-2 and 941 at this stage, you need to read through this article in its entirety.
- If, however, you successfully generated W-2, but your 941 and W-2 total wages don’t match, please check out the reconciliation section of this article.
- If your W-2 and 941 wage match, please review the configuration and testing section, where we provide tips and techniques four your benefit.
To help you get through Year End, Deloitte Consulting offers our past and current clients up to two hours of free consulting. This offer is made on a first come, first served basis. Call +1 510 378 8261 or e-mail kgao@deloitte.com for immediate access to a team of Deloitte’s SAP Year-End specialists.
Deloitte’s Year-End Approach
Deloitte has accumulated extensive SAP Year-End experience during our many years collaborating with SAP and supporting our clients. In that time, we have developed a structured approach designed to help our clients streamline their year-end activities, as well as tools and accelerators to expedite testing.
Deloitte’s Year-End Wheel (seen in the accompanying graphic) provides an overview of our approach: plan, configure, test, reconcile, adjust, production and on-going support.
While each one of these steps could be expanded into its own separate article, in the interest of brevity we cover here the four steps that are the focus of the next six to eight weeks: configure, test, reconcile and adjust. Let’s look at each one:
Configure
Before any configuration takes place, please make sure you check the minimum HR Support Package (HRSP) and Country Legal Changes (CLC) levels that are needed to run Tax Reporter. If you’re on ERP 6.0, you need to be on HRSP 31 and CLC 35.
Applying the minimum level of HRSP and CLC is mandatory for all Tax Reporter users. Some HRSPs have complex legal changes and require extensive regression testing. Start early so that you can focus on testing the tax forms in December instead of testing HRSPs.
If you are on SAP ERP 6.0, you are required to employ SAP Print Forms by Adobe. SAPScript forms can no longer be used to generate 2008 tax forms.
If you are a public sector client using add-on HR-PS and you are on R/3 4.6C, you need to apply Conflict Resolution Transport (CRT) SAPKISM890.
Two common mistakes made by first-year Tax Reporter users are:
- Underestimating the technical understanding and experience required to complete configuration
- Ignoring configuration of correction forms such as W-2c. These forms are mandatory, if corrections are made to the original W-2
Also, please don’t forget Year End is also the start of the next year. Before running the first 2009 payroll, it is mandatory that you apply the version “j” of TaxFactory 8.0. SAP Note 1264717 must be applied on top of the TaxFactory upgrade if you run payroll for employees in the Commonwealth of Pennsylvania. You’re also required to apply, at a minimum, Tax Update Bulletin TUB115 before the first 2009 payroll. Finally, please also configure State Unemployment Insurance (SUI) ceilings and experience rates, and generate new public holiday calendars.
Testing
Testing is a good insurance policy if you want to enjoy some quality time with your family during the holidays. Leave enough time to fully test the system, including, but not limited to:
- Regression testing of the HRSP
- Unit, string and integration testing of the entire Year-End process, including form generation, Year-End adjustment workbench, manual adjustment
- Test your printer, your forms and form alignment
- Test the format of the electronic file
- Test the electronic posting of your W-2, if applicable
- Fully test security, i.e. authorization to view spool files with employee details
One handy tool you may use to check the accuracy of your W-2 file is AccuWage. It’s a tool that can be conveniently downloaded from the Social Security Administration Web site.
AccuWage checks the W-2 wage reports to ensure they comply with Publication 42-007: Specifications for Filing Forms W-2 Electronically (EFW2), and provides reports listing all errors found in the wage report. However, it does not verify employee names and social security numbers.
Deloitte has also developed tools and accelerators for testing. Some of the tools are embedded in the HR Fast Forward™, which has benefited many of our clients.
Reconciliation
Your payroll data may seem perfect until the numbers on various forms don’t agree with each other! This constitutes the biggest headache of any Year End. The reconciliation complexity and difficulty is compounded by cross-border issues with countries such as Canada or Mexico. A seasoned payroll practitioner does not bet on any last minute “magic.”
In fact, to offset last-minute problems, many payroll departments have monthly or quarterly reconciliation. That makes the reconciliation easier at Year End. If you haven’t kept up with reconciliation, below are a few quick steps that will help you to identify exceptions:
- Reconcile total wages and tax between W-2 and 941 with current year data in the system.
- If reconciliation fails, reconcile by quarter: Run 941 for Quarter One and Run W-2, coinciding the “Consider Payroll Results up to Date” with the quarter end date. If numbers still don’t match, separate your population and reconcile by groups of employees. That will get you to the “problem” group of employees quickly.
- Repeat step two for the rest of the quarters and identify all issues.
Make the best use of the Payroll Reconciliation Report. Payroll Reconciliation Reports have features for reconciling total amounts by the fields used in tax forms.
Adjustment
Adjustment is an integral and critical part of the year-end process. It is needed to resolve reconciliation issues, record additional reportable tax and taxable, and clear claims.
You may use Adjustment Workbench to enter additional reportable tax and taxable. If you want to enter an adjustment that is earlier than the last payroll run, you would have to use Adjustment Workbench with special retro processing (Transaction PAUY).
Some adjustments come late and yet don’t result in any material change in tax liability. In that case, you may use manual adjustments to make the changes to taxable and tax entries in T5UT1 and deposit, interest and penalty in table T5UT2. Bear in mind, however, the entries in T5UT1 and T5UT2 are not used by reports outside of the Tax Reporter, which means these entries will not remove discrepancies displayed in the Payroll Reconciliation Report.
SAP recommends that clients clear all claims before Year End. SAP provides options to collect, write-off or some combination of the two. While SAP’s guide, “Claims Processing,” is documented, it takes an experienced Payroll consultant to fully configure and test the claims processing. This is an area in which a lot of clients can experience frustration.
I have selectively covered important Year-End topics. If you need more details regarding what is covered in this article, please call me at +1 510 378 8261 or e-mail kgao@deloitte.com.
Here’s wishing you a successful Year End!
Kevin Gao is a specialist leader with Deloitte Consulting LLP in the Human Capital Service Area. He has more than 15 years of consulting experience, including 13 years dedicated to SAP HCM-related services. Kevin also has extensive experience in providing HR and Payroll compliance-related services.
This Quarter’s featured practitioner: Zahava Kahan; inside advice—“Don’t over-engineer the solution!”
Each quarter, The Edge will feature an interview with one of Deloitte’s outstanding SAP practitioners. Just a little insight into what makes us tick.
How long have you been consulting?
Just over four years now.How much total experience do you have with SAP, HR and/or Payroll and process design/package implementations?
I’ve been involved in all of those areas for the past 10 years.That’s quite a bit of experience—so on how many implementations have you been involved?
The best way I know how to answer that one is that it’s a couple more than the number of times the New York Yankees have won the World Series!If you could tattoo one piece of advice for clients on your forehead, what would it say?
No tats for me, please! Especially not on my forehead. But, if I could give only one piece of advice, it would be don’t over-engineer the solution.What do you think is the primary “key success factor” in an SAP implementation?
I know this is going to sound like a typical consultant response, but the fact is, “it depends.” Every implementation has its own nuances, so understanding what makes them different is very important. You also need to know the long-term strategies at stake and make sure the right people are designated as decision makers. In addition, understanding the limitations from a time, cost and effort perspective is critical. Finally, scorecards and status reporting are essential to success.What’s new in SAP that has you really excited?
All of the new Talent Management functionality excites me. There is now a great deal of functionality that will be available as standard—and that are designed to help SAP clients run their businesses better.What’s your proudest moment as an SAP consultant?
It is always a great moment when I can watch my clients take the new processes that we helped them develop and use them successfully with the technology that we helped them build. That is very rewarding!Just to get a sense of Zahava, the person…what’s a key piece of professional and life advice?
Well, my motto is: If at first you don’t succeed, change your shoes. Maybe that’s why I just listened to Johnny Cash’s “Walk the Line” on my iPod!Zahava Kahan is a manager with Deloitte Consulting LLP in our New York office and is an accomplished SAP specialist.
SAP HR 2009
It’s being called by some as one of the most important events of 2009 for organizations that run and support SAP HR, payroll, MSS, ESS, benefits, compensation and talent management solutions. The “it” is the much-anticipated SAP HR Conference 2009, which will be held in Las Vegas, March 17-20.
Deloitte will have broad participation in many of the more than 300 specialist sessions that will address such topics as strategies for HR process optimization, shared services and organizational performance; comprehensive education for SAP talent management; and in-depth case studies that show you how your industry counterparts leverage SAP solutions to meet their organizational goals, among hundreds of others.
SAP HR 2009 is co-located with SAP Financials 2009 and SAP Governance, Risk & Compliance 2009.
Registration at one conference admits you to all three events. Visit www.SAPHR2009.com for more information.
Clients questions and answers
Here, we will include our responses to questions we frequently hear from our clients.
Question: Development of our people is very important; how does SAP functionality compare with other options?
Answer: There are specific functional differences between Point Solution Vendors, or “best-of-breed” solutions and the SAP HCM talent management solution. The table below outlines some of the key differences as they relate to talent management (TM) suite applications.
| SAP HCM Solution | SAP HCM Solution |
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For more information about how our SAP HCM services can support your talent management objectives, please visit Deloitte.com, or contact Manny Ramirez at +1 610 772 3148.
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The Edge: Human Capital Management Newsletter - Spring 2009
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This publication contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this publication, rendering business, financial, investment or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates and related entities shall not be responsible for any loss sustained by any person who relies on this publication.
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