5 reasons, why HCM outsourcing is worthwhile

To change this and ensure more efficient, digital processes, companies are increasingly turning to appropriate human capital management (HCM) systems such as SAP HCM. However, these systems no longer "simply" support payroll. They combine the latest technologies (e.g. for self-services or personnel controlling) with the requirements specified by the legislator, for example in the context of GDPR compliance provisions or B2A procedures. This makes HCM systems a comprehensive specialized application with a variety of new requirements for ongoing operations. Due to time and resource constraints, internal HR and IT teams are not always able to cope with these requirements. So why is it worthwhile to bring in outside support or outsource certain processes altogether? Here are 5 reasons...

Reason 1: Your internal HR and IT teams can focus on the essentials

The processes surrounding personnel administration, payroll and time management have grown historically and are cost- and time-intensive due to many manual, paper-based activities.
Less administrative, more strategic: The monthly payroll accounting of your employees is essential, but a time-consuming task for your HR team. The same applies to checking whether legal requirements such as data protection regulations are adhered to in the HCM systems. If you outsource these standardized, unpleasant administrative processes, you can relieve your HR department. At the same time, you free up resources that your HR team can use to focus on strategic tasks such as building and developing your workforce. The same is true for technical system operation and its further development. Outsourcing these operational standard solutions focuses IT on technological innovation and value creation through technology deployment.

Reason 2: Cost reduction in ongoing HCM operations

Once set up, an HCM system is basically ready for use. However, the costs associated with ongoing operations are often underestimated. If this task is to be managed internally, personnel costs will of course occur. When introducing the system for the first time, your HR department must also be adequately trained in its use. After all, errors caused by untrained personnel can lead to expensive operational downtime. Outsourcing system support, on the other hand, helps to reduce costs and increase efficiency in your HR department. The obligatory internal substitution arrangement is also eliminated by using external capacities.

Reason 3: Benefit from technical and professional expertise

To exploit the maximum potential of your HCM system, your HR team needs dedicated knowledge. However, it is becoming increasingly difficult to find qualified personnel that have this knowledge and can thus fully take care of system operation and its further development. In addition, legislation and compliance with legal and tax regulations become more and more complex. External service providers deal with these issues and the corresponding implementation in HCM systems on a daily basis. With outsourcing, you can rest assured that your processes are in the hands of absolute professionals.

Reason 4: Minimized risk of downtime

With the support of an external HCM service provider, you also ensure business continuity in the event that your internal HR team should ever be unavailable due to a flu epidemic, for example. Smaller companies in particular, with correspondingly small HR departments, usually have no more than one back-up option in the event of sick leave - if any. Nevertheless, salaries should be in your employees' accounts on time.

Reason 5: Ensuring IT security

As processes become increasingly digitalized, the risk of cyberattacks increases at the same time. HR software solutions are no exception. That's why protecting the particularly sensitive HR data located in HCM systems must not be neglected. External service providers usually have proven procedures and methods for implementing appropriate security measures - so you can hand over this issue with a clear conscience.

Natuvion: Your reliable HCM partner!

Are you convinced of the benefits of outsourcing your HCM processes and looking for support? Then Natuvion may be the right partner for you. Depending on your requirements and needs, we will work with you to develop an appropriate SAP HCM roadmap and can perform some or all of the tasks on your behalf. From smooth payroll, to year-end changes, automated self-services or GDPR compliance. If you want to learn more about how to effectively implement operational services for payroll and time management in SAP HCM and how we can support you, take a look at our fact sheet.