Telefónica: Delivering a digitalized payroll solution to support its future-ready people strategy
Establishing a cloud payroll solution for 8,000 employees
With more than 388 million customers, Telefónica SA is one of the world’s largest telecommunications providers. Its German business, Telefónica Germany, is spearheading the use of the SAP SuccessFactors Employee Central Payroll solution to combine personalized data for 8,000 employees in a single instance. The company uses SAP Business Suite to unify its core HR, payroll, and finance processes.
| Industry | Region | Company Size | Partner |
| Telecommunications | Madrid, Spain | 104,000 employees | Telefónica Global Technology and Zalaris ASA |
consolidated payroll solution, down from three customized systems.
interfaces for payments, accounting, SAP SuccessFactors, and the tax authority, down from 12 interfaces.
reduction in complexity of payroll schema by harmonizing schemas from the three old systems.
Head of Digitalization and Technology, Telefónica Germany
Consolidating complex and sensitive payroll data
Telephone operator and mobile network provider Telefónica SA offers fixed and mobile telephony, broadband, and subscription television services in 11 countries across Europe and Latin America. Its mission to make the world more human by connecting lives puts people at the center of everything it does. The telecommunications sector is undergoing continuous transformation, and the company is experiencing disruptions that require new capabilities to manage talent. As part of the growth pillar of its strategic plan, Telefónica realizes that to transform in a digital and dynamic world, it needs to ensure that its processes and working methods constantly evolve to become more agile.
Paying employees correctly and on time is a critical business requirement. After a series of mergers and acquisitions in recent years, Telefónica Germany had three separate payroll instances running on the on-premises SAP ERP Human Capital Management solution. Each of the 8,000 employees had a personalized contract and working framework that dictated their pay structure, so there was significant complexity and sensitivity around the payroll model, with no room for error. The legacy systems were heavily customized and needed to be individually maintained, making them costly to manage, time-consuming to operate, and requiring a high degree of manual intervention.
The business views technology as an enabler to achieving its business and people goals, and having a modern, digitalized payroll solution was a core element of its people strategy. In addition, a solution was needed that could align with German employment legislation and the remit of Telefónica’s Workers Council.
Head of Digitalization and Technology, Telefónica Germany
Integrating payroll with core HR and cloud ERP data through digitalization
Globally, Telefónica was already using the SAP SuccessFactors Employee Central solution for managing its 104,000 employees’ master data and SAP S/4HANA Cloud Private Edition for finance and accounting processes. Telefónica Germany chose the SAP SuccessFactors Employee Central Payroll solution as a locally managed instance due to its integration capabilities with the core HR and cloud ERP solutions. For example, the payroll solution is connected to the SAP SuccessFactors Employee Central Time Management application, which enables absence and attendance management (including timesheet and time-off functionality) at Telefónica Germany.
The localization capabilities of SAP SuccessFactors Employee Central Payroll allow the company to comply with German regulations and tax rules, such as ELSTER integration, Sarbanes-Oxley Act audit requirements, and statutory health insurance certification. And it can unify its core HR, payroll, and finance processes with SAP Business Suite.
Telefónica Germany used the SAP Preferred Success offering for the deployment, allowing quick decision-making, added value, and ongoing advice. Telefónica Global Technology (TGT), which is the company’s global IT operations and management division and leads the digital transformation of the Telefónica Group and its B2B customers through the centralized and efficient management of its global information systems, worked with Telefónica Germany on the business case, scope, and analysis. In its role of setting the global IT strategy and providing guidance and advice to the individual Telefónica businesses, TGT also supported the integration with SAP SuccessFactors Employee Central and SAP S/4HANA Cloud Private Edition. Zalaris ASA was the partner for the implementation project, providing strategy, advisory, transformation, and application support.
Global Functional Lead, Telefónica Global Technology
Streamlining payroll processes and helping ensure local compliance
Telefónica Germany completed the implementation of SAP SuccessFactors Employee Central Payroll in just over 12 months. This was a major achievement given the complexity of migrating the highly specific and personalized data of several thousand employees. The cloud-based solution is now combined with core HR information in a secure and validated way. In replacing the three previous systems, the single payroll solution has consolidated many of the company’s technical processes, interfaces, and business processes. It has also contributed to reduced system maintenance. And with traceable and auditable data, Telefónica Germany can be confident in complying with local regulatory requirements.
SAP SuccessFactors Employee Central Payroll has enabled the business to streamline payroll management and improve data quality. Moving to a flexible solution also delivers cost efficiencies to the company and a quicker time to market if a new feature needs to be rolled out. The solution helps Telefónica support the growth pillar of its strategic plan to achieve its goals and overcome any challenge.
Head of Digitalization and Technology, Telefónica Germany
Paving the way to more-efficient payroll processes
As the first business in the group to implement the SAP SuccessFactors Employee Central Payroll solution, Telefónica Germany is pioneering best practices in payroll processes. The lessons learned from this deployment can benefit other businesses should they adopt the solution with the help of TGT. For example, Brazil is evaluating the payroll software.
Currently running a proof of concept, the company is investigating deploying the payroll control center capability in SAP SuccessFactors Employee Central Payroll to bring greater efficiencies through further automation. This would enable Telefónica Germany to oversee comprehensive payroll processes, including prepayroll validations, simulations, payroll runs, and postpayroll activities from the SAP SuccessFactors Employee Central solution or SAP Fiori launchpad.
Featured partners
Telefónica Global Technology leads the digital transformation of the Telefónica Group and its B2B customers through the centralized and efficient management of its global information systems.
Zalaris ASA operates throughout Europe and Asia Pacific, providing solutions and services to clients in over 100 countries worldwide through a unique international delivery model while maintaining locally based support for clients with local requirements. Recognized as an SAP gold partner, Zalaris’ consulting business specializes in market-leading tier-one HCM solutions and supports customers throughout their own cloud HR and payroll journeys.