Weighing the Benefits of Lift and Shift vs. Rip and Replace in SAP Payroll
If you are moving from SAP ERP Payroll on-premise to SAP SuccessFactors Employee Central Payroll (ECP), there are two primary options for SAP Payroll migration: Lift and Shift and Rip and Replace. Depending on your organization’s situation, one might make more sense than the other. There are benefits to both to consider.
First, what are Lift and Shift and Rip and Replace? The names are somewhat explanatory, if not dramatic, in the case of Rip and Replace.
Lift and Shift: This is essentially a like-for-like migration of SAP Payroll on-premise to ECP in the cloud. Your payroll rules, configurations, and data will be carried over, and there will be no rebuild or redesign of the system. There are partner tools that enable Lift and Shift to happen without reconfiguration.
Within Lift and Shift, there is also the “Lift and Shift and Adjust” possibility that allows you to run parallels to ensure the migration is successful. Once that is done, you can start making adjustments to the configuration. You’ll choose this option if you still want to have the payroll history but still make some changes.
Rip and Replace: This is a wholly new payroll implementation. It is rethinking everything—including fundamental configurations—from the ground up when moving from SAP Payroll on-premise to ECP.
Choosing Lift and Shift or Rip and Replace
Most companies thus far have tended to choose a Lift and Shift migration vs. Rip and Replace. This is in part because, at most companies, payroll works fine, and the thought of disrupting payroll is considered too great a risk weighed against any potential benefits of reconfiguration.
Lift and Shift allows an organization to keep its history and the ability to make retroactive payroll actions—salary changes that may come out of collective bargaining, for example. A like-to-like migration from SAP Payroll on-premise to ECP is also going to be the quickest route to the cloud, and likely to be the lowest migration cost.
So, when might a company choose Rip and Replace? If they aren’t happy with how their payroll operates, that’s certainly a drive. There may be legacy configurations and add-ons that have become unmanageable, and the people that managed them have since left the company.
Other factors in choosing to go with a whole new implementation include wanting to unify disparate systems that may have come from mergers and acquisitions, where it doesn’t make sense to keep all those leftover payroll rules.
The bottom line: If your payroll works for you, Lift and Shift could be a viable accelerator to the cloud for payroll. If you have a real need for change, Rip and Replace may be the best path to ECP. If you find yourself in between, it might make sense to discuss the “Lift and Shift and Adjust” option.
Why Move to the Cloud for Payroll, Anyway?
You may be thinking: If Lift and Shift makes sense for me because my SAP Payroll on-premise system works, then why would I want to migrate to ECP?
There are the standard benefits of cloud that pertain to any system—less need for internal maintenance resources, support packs, system administration, technical updates, and managing hardware are no longer required.
Beyond that, there are real benefits in ECP over SAP Payroll on-premise. New features are being rolled out in Employee Central Payroll on a biannual release schedule, so you are very likely to gain more value by migrating over time. This is where SAP is focusing its payroll innovation. You won’t get much in legacy SAP Payroll on-premise beyond patches.
If you also plan to move core HR to SAP SuccessFactors Employee Central, then you’ll find a simplified integration with ECP vs. SAP Payroll on-premise. There are process efficiencies in payroll tasks that will be gained through the cloud-to-cloud integration.
There’s also Payroll Control Center, which is very rare for on-premise customers to have implemented but the default if you use ECP. Payroll Control Center allows you to modernize your payroll process with a more consumer-grade look and feel. That’s going to make life easier for your payroll team.
So, whether you choose Lift and Shift or Rip and Replace, there are plenty of reasons for SAP Payroll migration from on-premise to ECP.
Making the Right Call on SAP Payroll Migration
Lift and Shift and Rip and Replace are broad terms—your SAP Payroll migration is likely to have its unique aspects. That’s why it is important to talk with SAP and your implementation partner about the options available. There are partner tools that can make a move relatively easy, but you need to make sure those will work for your organization.
For more on moving to the cloud, download The Comprehensive Guide for Upgrading from SAP ERP HCM to SAP SuccessFactors whitepaper.