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Roadmap for HR/IT transformation before the end of SAP ERP HCM

HR/IT target picture for HERMA GmbH: Digital renewal for a future-oriented HR system landscape

Company / Industry
HERMA GmbH / Labeling technology

Range of services
As an expert in marking technology, HERMA GmbH develops and produces adhesive materials, labels and labeling machines for the marking, identification and design of packaging and products. HERMA employs over 1,000 people and generated an annual turnover of 429.4 million euros in 2023.

HERMA website
www.herma.de

In a world in which digitalization is penetrating all areas of life, HERMA GmbH is facing a significant transformation in HR. Today's employees are used to using state-of-the-art digital tools with intuitive user guidance. They expect companies to meet their growing demands in a professional context as well. Since the 1990s, HERMA has relied on the on-premise SAP ERP HCM as its leading HR management system. This has been systematically expanded to include numerous solutions to cover a wide range of business processes, but over the years has resulted in a heterogeneous HR/IT landscape that no longer meets current requirements. The challenges resulting from outdated HR processes and an outdated HR software solution have prompted HERMA to initiate a fundamental renewal and digitalization of the HR landscape.

This project is made even more urgent by the impending expiry of the SAP ERP HCM on-premise solution in 2027, as the software manufacturer will no longer provide regular maintenance from this point onwards. The need to adapt to modern requirements and continue to position itself optimally in the competition for the best talent has prompted HERMA to develop a comprehensive digital strategy and define a precise HR/IT target picture.

In this context, HERMA sought cooperation with the IT consulting and services company projekt0708 in order to develop a detailed HR/IT transformation roadmap for a future-proof solution based on SAP ERP HCM. The partnership aims to use a structured approach to develop an optimal HR/IT target picture for HERMA that does justice to both current and future developments.

Development in record time
Customized HR/IT roadmap
SAP S4/HANA migration and SF implementation

Strategic reorganization of the HR department

HERMA has been an SAP user company for many years. In the 1990s, the marking technology expert introduced SAP ERP Human Capital Management (HCM) as its leading HR system. Over the years, many solutions have been connected or integrated into this system to cover a wide range of business processes. The result was a heterogeneous HR/IT landscape that was only selectively developed in terms of content and technology. The HR system at HERMA has thus become outdated over the years and represents a challenge for HR experts, but also for managers and employees.

In addition to outdated or missing HR processes, HERMA was confronted with an HR/IT system landscape that no longer met modern requirements. Manual, often still paper-based workflows slowed down employees' ability to act and react, for example during recruitment processes or onboarding. The HR landscape had to be fundamentally overhauled and digitalized so that HERMA could continue to be an attractive employer for potential specialists.  

In order to effectively retain employees and thus counteract the shortage of skilled workers, HERMA saw the use of an efficient recruiting solution, self-services for employees and an advanced learning management system (LMS) as a major necessity.

At the same time, HERMA initiated the development of a holistic digital strategy. The HR landscape was also a focal point. Workshops were held to initially examine where change was necessary in order to generate added value within the company and in the area of employer branding. An HR/IT strategy was developed together with external support.

Another external factor reinforced the drive for transformation: the usage rights for SAP ERP HCM, which is operated in compatibility mode within an SAP S/4HANA on-premise instance, expire at the end of 2025. This deadline increases the pressure at HERMA to take holistic care of the HR/IT transformation in the company. HERMA plans to migrate to the successor solution SAP HCM for S4/HANA, On-Premise Edition - also known as "H4S4" - as a transitional solution. Its solution scope is similar to the classic SAP HCM and includes functions for personnel administration, organizational management, payroll accounting and time management. Parallel to this move to H4S4 at the on-premise level, HERMA faced the challenge of completely rethinking its HR department and reorganizing its HR IT accordingly using SAP SuccessFactors HCM in the cloud.

Following the successful migration of the SAP ERP system - on which SAP HCM is also operated - to S4/HANA and an internal reorganization of the HR department, HERMA went in search of a suitable partner to validate and continue the previously developed HR/IT transformation planning. The decision was made in favor of projekt0708 as a partner for the creation of a detailed HR/IT transformation roadmap for a future-proof solution based on SAP ERP HCM.

„You could already feel the spirit of optimism at HERMA in the appointments at all levels. HERMA has taken a general approach to the whole thing, which is also important. You have to ask yourself very fundamental, elementary questions and be prepared to take a step back if necessary.”
Michael Scheffler
Managing Director at p78 GmbH
4 HERMA Mitarbeitende stehen im Büro und besprechen sich

From analysis to target picture with projekt0708

The HR/IT transformation project at HERMA in collaboration with projekt0708 was based on a structured approach that was specifically designed to develop an optimal HR/IT target picture for the company. The HR/IT Roadmap Starter Package from projekt0708 provided the necessary orientation and structured approach. The spirit of optimism was transformed into momentum in the collaboration between HERMA and projekt0708: Within a very short space of time, a roadmap was developed that visualized the blocks of topics to be addressed at HERMA.

Initialization and concept development

The process began with a one-hour remote kick-off meeting. In this initial meeting, mutual expectations of the project were clarified and essential information was collected in preparation for the on-site workshops. This collaborative approach made it possible to fundamentally question the existing HR strategy and take a new direction that took into account both the technical and cultural aspects of HR work at HERMA.

Motivational high thanks to effective workshops

Right from the start, it was crucial to create a spirit of optimism among everyone involved. HERMA's first workshop with projekt0708 brought IT and HR employees together in one room, which not only laid the foundation for successful collaboration, but also created broad motivation within the company. The willingness to rethink existing processes and embrace new, digital solutions was encouraged. This first workshop aimed to develop an in-depth understanding of the current situation at HERMA. The second workshop focused on developing various TO-BE scenarios for HERMA's future HR/IT landscape.

A central aspect of the project was the in-depth analysis of the existing HR/IT system landscape, which had been in place since 1998 and had only been adapted slightly over the years. This investment backlog and the lack of further development in the HR area formed the starting point for the development of a comprehensive HR/IT transformation roadmap. projekt0708 adapted its standardized consulting package individually to HERMA's needs in order to develop a tailor-made solution.

Creation of the HR/IT roadmap

The future-proof roadmap was developed in "absolute record time" - within just three months from the start of the project in October 2023. This was made possible by applying a tried-and-tested approach that built on the existing draft strategies.

Result

This structured approach enabled HERMA and projekt0708 to develop a clear and implementable HR/IT target picture that is not only aligned with current requirements, but also with future developments.

The migration to SAP S4/HANA and the introduction of SAP SuccessFactors not only renewed the technical basis, but also ushered in a new era of employee retention and development. The result is a future-proof HR/IT strategy that will enable HERMA to continue to successfully attract and retain talent.

„We were able to get into very deep and creative processes very quickly and had excellent discussions - even in the first workshop. This demonstrated the expertise, breadth and depth of projekt0708 very well, whether at a strategic level or with regard to technical details such as SAP interfaces or databases.”
Dominik Bräuchle
CIO of the HERMA Group
„You could really feel it when everyone involved sat together in one room. The first workshop with projekt0708 has become a very important momentum. With this workshop, we managed to generate motivation everywhere. It made us realize where we are in reality and where we can go if we pull together.”
Dominik Bräuchle
CIO of the HERMA Group

Challenges & experience

Time and investment pressure:

One of the biggest challenges was to develop the roadmap within the tight timeframe, especially given the impending deadline for the expiry of the rights to use SAP HCM in compatibility mode on the integrated S/4HANA system at the end of 2025.

Convincing stakeholders:

A key aspect was to convince the steering committee and management of the necessity and benefits of the significant investment in HR processes. The challenge was to make the value of the transformation tangible and create trust in the planned approach.

Capacity challenges:

Securing the necessary capacity in HR and IT was another challenge. Intensive discussions had to be held on how resources from both areas could be provided effectively in order to support the transformation in the long term.

Continuous participation in development:

A decisive learning was the realization that an investment backlog over a long period of time can lead to considerable challenges. For the future, HERMA has recognized that continuous participation in technological and process development is essential in order to continue to set future-oriented market standards. The SAP SuccessFactors deployment model, i.e. the cloud approach, provides the appropriate basis for this.

Importance of early involvement and clear communication:

The early involvement of all stakeholders and clear, transparent communication were key to success. The workshops and discussions made it possible to delve deep into the creative and technical processes, with all participants feeling understood and listened to. This open communication created the basis for strong motivation and a spirit of optimism throughout the company.

Benefit orientation at the heart of the transformation:

Another important learning was the realization that the benefits of the transformation should primarily arise outside the HR department. The support of projekt0708 in relation to the change process was crucial to maximize the positive impact of the transformation on the entire company and to make the recruiting process and other HR processes more efficient and user-friendly.

Flexibility and adaptability:

The ability to adapt quickly to new insights and rethink the strategy accordingly was a key factor in the success of the project. This flexibility enabled HERMA and projekt0708 to respond to challenges in real time and ensure that the transformation roadmap delivered the most value to the business.

„p78 also succeeded in demonstrating that it is affordable. It has helped us at HERMA to see which packages put together by projekt0708 can really be used to implement the project. There is a plan for how it should proceed - and now it is becoming concrete.”
Matthias Meyder
Head of Human Resources at HERMA
Zwei HERMA Mitarbeiter stehen vor großer Ettikettierrolle in Produktion

The outlook - what's next

Following the successful development of an HR/IT roadmap, HERMA is at a crucial point, as the implementation of the HR/IT transformation is next on the agenda. The detailed roadmap outlines a clear roadmap for the coming years and lays the foundation for continuous optimization and expansion of the HR system. In concrete terms, this means that HERMA is setting up a hybrid system landscape. On the one hand, SAP SuccessFactors Employee Central and Recruiting were introduced in the first expansion stage. Secondly, the migration from SAP HCM to SAP ERP HCM for S/4HANA, including self-services based on SAP Fiori, took place in the second half of 2024. In addition, the SAP Travel & Expense solution, SAP Concur, will be introduced in the first half of 2024. The entire implementation program is initially scheduled to take two years, with the expectation that the full implementation of additional functions in the form of further SAP SuccessFactors modules will take between three and four years in total.


The detailed planning for the next two years includes a careful elaboration of the next steps, which will run in parallel in numerous work streams and projects. This coordinated approach will allow HERMA to respond flexibly to challenges while continuously improving the efficiency and effectiveness of HR processes.

An outstanding aspect of this project is the close cooperation between the three main players: the HR department, IT and the SAP implementation and consulting partner projekt0708. The joint action and the obvious enjoyment of the project underline the positive dynamics and commitment of all those involved.

The HR/IT roadmap serves as a living document that is flexibly adapted to the changing needs of the company.

With the successful development of a digital HR/IT strategy, HERMA has taken a significant step towards future viability. The next few years promise to be an exciting time of further development and optimization, during which HERMA will further consolidate its position as an innovative company. The basis for this success also lies in the strong partnership with projekt0708 and the close cooperation between HR and IT, which are jointly driving forward the digital transformation at HERMA.

„We started the workshop series with projekt0708 and all of a sudden everyone involved had a really well-rounded picture. That's what they managed to do: to bring together both IT and the specialist area, as well as the managers - each at their own level of knowledge and with their own ideas - in a really competent overview and to say this is what the future could look like.”
Dominik Bräuchle
CIO of the HERMA Group
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