Microsoft Overhauls Core HR System

Microsoft's core Human Resources (HR) system was outdated and in need of a significant upgrade. Due to its limitations, employees transferring to new jobs in different countries or regions often felt like they were starting over from scratch. This issue arose because HR operations teams had to manually move employees to different country codes behind the scenes.

The primary goal of the overhaul was to bring the company's HR data together in one centralised system. By aggregating and mastering all employee data across 109 countries, Microsoft aimed to implement a single global policy while accommodating country-specific local policies in one place. This consolidation would reduce error-prone, high-touch manual processes, thereby improving the efficiency and smooth operation of HR systems while supporting employees globally.

Microsoft Digital, the organisation responsible for powering, protecting, and transforming the company, has been spearheading the effort to upgrade Microsoft's core HR systems. The key objective was to unify the employee experience, ensuring that it felt like the same Microsoft regardless of the country or region an employee worked in.

The multiyear project involves migrating Microsoft’s core HR systems to SAP SuccessFactors. The transformation is nearly complete, with the last group of external staff and newly acquired employees scheduled for upgrade this winter. The legacy system could no longer scale to meet Microsoft’s global requirements and aspirations for a consistent employee experience. A more modern, flexible, and capable core HR system was needed.

After reviewing various HR systems and considering the possibility of building an in-house solution, Microsoft chose SAP SuccessFactors. This decision was influenced by the system's ability to play a foundational role in transforming secondary HR systems, such as mobility, new acquisitions, and payroll. Additionally, the cloud-based SAP SuccessFactors Human Experience Management (HXM) Suite runs on Microsoft Azure, benefiting from the longstanding partnership between Microsoft and SAP.

Microsoft is one of the first large on-premises enterprises to move its HR systems to Microsoft Azure, a migration that is setting a precedent for other SAP SuccessFactors customers and SAP SuccessFactors itself to transition to the same cloud platform. Successfully establishing the instance on Azure was a significant milestone for both Microsoft and SAP.

The journey to upgrade Microsoft’s HR core has been challenging due to the massive and complex nature of the system, encompassing HR systems in 109 countries and regions. Before this overhaul, the approach to HR data management varied considerably worldwide, making it seem like the company had a separate HR system in each location. The project exemplified the need for the simultaneous transformation of people, processes, and technology to achieve successful enterprise-level change.

Despite the complexity, Microsoft rejected the traditional approach of starting over when upgrading HR systems. Instead, the company opted to keep the lights on and incrementally improve the system over four years. This strategy allowed for continuous operation and minimized disruption while implementing significant enhancements to the HR infrastructure.

By upgrading to SAP SuccessFactors and leveraging Microsoft Azure, Microsoft is paving the way for a more unified and efficient HR experience for its global workforce, ensuring that employees feel connected and supported, no matter where they are in the world.