SAP Success Factors Cloud Licensing
- Subscription-Based Model: Pay per user annually.
- Modules Sold Separately: Choose HR, payroll, or performance management.
- Scalable Options: Add or remove users easily.
- Custom Pricing: Based on the module, company size, and user count.
- Cloud Deployment: Fully hosted and maintained by SAP.
SAP Success Factors Cloud Licensing
SAP SuccessFactors is a leading cloud-based Human Capital Management (HCM) solution today. It provides a full suite of applications to manage HR processes efficiently.
Understanding its licensing model is key whether you are just exploring SAP SuccessFactors or already considering implementation.
Licensing for SAP SuccessFactors can be complex, and this article will walk you through everything you need to know in an easy-to-digest manner.
Below, we cover the essentials of SAP SuccessFactors Cloud Licensing, including available packages, user types, pricing models, and best practices for your organization.
1. What are SAP Success Factors?
SAP Success Factors is a comprehensive cloud-based HCM solution that manages various HR functions, from employee onboarding to performance management. It includes multiple modules, such as:
- Employee Central: Manages core HR processes and serves as a central data repository.
- Recruiting: Handles candidate sourcing, hiring, and onboarding.
- Performance and Goals: Helps track employee progress, goal setting, and appraisals.
- Learning: Manages employee training and skill development.
- Compensation: Streamlines bonus calculations and salary adjustments.
These modules work together to simplify HR processes and improve employee satisfaction. However, each module has its licensing structure, complicating the decision-making process.
2. SAP Success Factors Licensing Model
The licensing model for SAP SuccessFactors is based on user count and modules, which means you pay depending on the number of employees using the service and the specific modules that suit your business needs.
Key Aspects of the Licensing Model
- Module-Based Licensing
- Pick and Choose: SuccessFactors allows organizations to purchase only the necessary modules rather than buying the entire suite.
- Scalability: The licensing is scalable so that you can add more modules as your organization’s requirements change.
- User-Based Pricing
- Per-User Licensing: Pricing is calculated per user and often depends on user type (active or employee-only access).
- Employee-Based Pricing: Sometimes, the licensing cost is calculated based on the total number of employees in the organization, regardless of how many employees actively use the software.
- Subscription-Based Pricing
- Annual Subscription: SAP SuccessFactors typically uses a subscription model where you pay an annual fee based on the number of employees and modules.
- Different User Types
- Professional Users: These are users who need full access to the system, such as HR administrators.
- Self-Service Users: Users, like general employees, might only need access to features like leave requests and performance reviews.
3. Available Packages in SAP Success Factors
SAP SuccessFactors offers various licensing packages to suit different business needs. Understanding these packages can help you decide which one best suits your organization.
- Core HR and Payroll: Includes Employee Central and Employee Central Payroll.
- Talent Management: Comprises modules for Recruiting, Onboarding, Performance & Goals, and Succession & Development.
- HR Analytics and Workforce Planning: Provides workforce analytics tools for understanding trends and predicting future HR needs.
- Learning and Development: Includes the Learning module to manage employee skills and certifications.
Example: A retail company may choose Talent Management and Learning modules to address its high turnover and effectively train new hires.
4. Common Challenges with SAP Success Factors Licensing
Understanding SAP SuccessFactors licensing can be challenging because of its modularity and complexity.
Some common issues include:
- Lack of Clarity on User Types: Differentiating between professional and self-service users can become confusing when allocating licenses.
- Overpaying for Features Not Used: Organizations often purchase a comprehensive suite and later realize some modules are rarely used.
- Scalability Confusion: As businesses grow, figuring out how to adjust existing licenses for new users or modules can be daunting.
5. How to Choose the Right Modules
Choosing the right SAP SuccessFactors modules for your organization requires careful planning. Here are some factors to consider:
- Company Size: Larger organizations may benefit from more comprehensive offerings like Talent Management, whereas smaller firms may just need the Core HR module.
- Current Challenges: If your organization struggles with high employee turnover, consider investing in Recruiting and Learning modules.
- Employee Skill Development: If upskilling is a key focus, prioritize the Learning module, as it enables the creation of comprehensive training programs.
6. SAP Success Factors Pricing
The pricing for SAP SuccessFactors is influenced by a variety of factors, such as:
- Number of Users: Typically, the more users, the higher the total cost.
- Modules Chosen: The cost differs significantly based on the combination of modules chosen.
- Customization Requirements: Any customization requirements might lead to an increase in the overall pricing.
Example Pricing Breakdown
Suppose a company has 500 employees and is interested in Employee Central and Recruiting modules. The licensing might involve:
- Employee Central: $6 per employee per month.
- Recruiting Module: $8 per employee per month.
- Total Monthly Cost: (6 + 8) * 500 = $7,000 monthly.
The above pricing is purely an estimate, as SAP SuccessFactors pricing can vary considerably based on the specifics of your contract.
7. Negotiation Tips for SAP Success Factors Licensing
If you’re negotiating SAP SuccessFactors licensing for your organization, consider these tips to help you get the best deal:
- Leverage Employee Numbers: If your employee count is high, ask for volume discounts on per-user pricing.
- Bundle Negotiation: Consider negotiating for a bundle of modules rather than purchasing them individually to lower costs.
- Renewal Discounts: If signing a multi-year contract, ask for renewal discounts.
- Usage Analysis: Evaluate the actual usage of existing modules during renewal time to avoid paying for unused features.
Example: During renewal negotiations, a company realized it had overpaid for unused Learning modules. By removing these from the contract, it saved around 20% annually.
8. License Compliance and Audit Management
SAP SuccessFactors licensing is subject to compliance checks, and ensuring your company stays compliant is critical.
Here are key things to keep in mind:
- Track User Accounts: Ensure only valid, active employees have access to avoid paying for inactive accounts.
- Monitor User Types: Distinguish between professional and self-service users carefully. Assign the correct user type to avoid compliance issues.
- Be Prepared for Audits: SAP has the right to audit your usage, so keeping accurate records of your licenses and usage is essential.
9. Cost Optimization Strategies
Optimizing costs for SAP SuccessFactors licensing requires proactive strategies:
- Conduct Periodic Reviews: Regularly assess which modules are being actively used.
- Optimize User Roles: Based on their needs, assign users the correct license type (e.g., switching a professional user to self-service if access requirements change).
- Centralize License Management: Designate a single point of contact within the company to handle all licensing needs. This will ensure better tracking and compliance.
Example: A company discovered that many employees only needed access for leave requests. By reassigning them as self-service users, they saved considerable costs.
10. Licensing Best Practices
To make the most out of your SAP SuccessFactors licenses, adopt the following best practices:
- Align Licensing with Business Needs: Only purchase modules aligning with your business challenges.
- Understand Terms and Conditions: SAP licensing contracts can have detailed conditions, so it’s critical to understand what’s included, from upgrade rights to termination clauses.
- Employee Training: Train HR teams to use the system effectively. This ensures that the modules are utilized fully, maximizing value.
- Plan for Growth: If you anticipate a rapid increase in employee count, consider scalable licensing agreements to accommodate future needs.
11. Migrating from On-Premise to SAP Success Factors Cloud
For organizations moving from an on-premise SAP HCM solution to SuccessFactors, there are a few licensing considerations:
- Hybrid Licensing: During the transition, some companies opt for hybrid licensing to run both solutions simultaneously until the migration is complete.
- Migration Credits: In some cases, SAP offers migration credits to ease the transition financially. Be sure to explore these options.
FAQ: SAP Success Factors Cloud Licensing
What is SAP Success Factors Cloud Licensing?
It is a subscription-based model in which businesses pay annually for each user’s access to SAP’s HR and talent management tools.
How are modules priced?
Each module, like Employee Central or Learning Management, has its own cost, typically calculated per user.
Are there volume discounts?
Yes, SAP often provides discounts for large user counts or enterprise-scale agreements.
What are the core licensing components?
Key components include a base subscription fee and user access to specific modules.
Is implementation included in the licensing cost?
No, implementation services are separate and may require third-party consultants.
How are additional users added?
Users can be added anytime, and costs are prorated for the remainder of the subscription.
Is there a free trial available?
SAP does not typically offer free trials but provides demos and guided product tours.
Can role customize licenses?
Yes, licenses can be tailored based on user roles, such as admin or employee access.
What support is included in the license?
Basic technical support is included; advanced support plans are available for an extra cost.
How does the licensing handle upgrades?
Licensing covers upgrades to the latest software versions without extra charges.
Are data storage costs included?
Basic data storage is included, but additional storage needs may require extra fees.
Can licenses be transferred between employees?
Yes, unused licenses can be reassigned to new employees without additional costs.
What is the contract length for licensing?
Contracts typically span 1 to 3 years, with renewal terms negotiated afterward.
Is integration with other SAP products included?
Integration features are available but may require separate licenses for additional SAP systems.
What happens if the license is not renewed?
Access to the system is revoked after the contract ends, with data export options provided before deactivation.
