Figure 1: Key Drivers Shaping HCM and SAP S/4HANA Strategic Priorities in 2023 31% 27% DEMAND FOR VISIBILITY INTO HIGHER EMPLOYEE EXPECTATIONS HR PROCESSES AND FOR MORE TAILORED AND USER-FRIENDLY EMPLOYEE ENGAGEMENT HR EXPERIENCES pate by moving to HXM systems — a better user experience for employees (63%) and increased employee satisfaction (45%). The transition to HXM allows organizations to reorient their HR strat- egies around enhancing the employee experience. While HCM systems have successfully and efficiently managed HR operations, they often struggle to meet the needs of the modern, digitally empowered workforce. This struggle is particu- larly noticeable across workforce management of deskless workers (i.e., frontline or shift workers), who constitute approximately 80% of the global workforce today. However, transitioning from tra- ditional Human Capital Management (HCM) systems to more modern, experience-centric HXM platforms is not without challenges. These challenges reflect in the survey findings as gaps be- tween the respondent organizations’ aspiration to enhance user experiences and the planned adoption of HXM systems. Only 12% of organizations intend to implement an HXM system by 2024. An additional 14% will target 2025, while other organizations have extended timeframes, with 11% planning to implement them by 2027 (Figure 2). The survey indicated 37% of respondents have no HXM adoption plans, highlighting some key roadblocks in the path of HXM adoption. The cost was the biggest barrier highlighted by 38% of respondents, while 35% identified competing priorities as a barrier, and 25% held the complexity of transitioning from an existing HCM to an HXM system as a core concern (Figure 3). This insight underscores the importance of a robust business case that addresses such appre- hensions and simplifies the transition toward HXM adoption. However, organizations are reluctant due to the perceived need for ROI from their existing HCM investments, with some stating, “We have invested a lot into our SuccessFactors instance; we do not think we will be looking to change systems anytime soon.” As the technology divide between the desked and deskless workers becomes more apparent, the challenge of promptly sourcing trained personnel during operational disruptions and supply chain issues has also emerged. This operational challenge, coupled with the persistent concerns regarding low engagement and retention, has steered progressive organizations to regard robust time and attendance functionalities as a fundamental aspect of their HXM strategy. This approach SAPinsider Benchmark Report | HCM and SAP S/4HANA 3