What is HCM Software and What Does HCM Software Do?

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Introduction of HCM Software?

HCM Software is an approach to employee staffing that recognizes people as an asset (human capital/human resources) whose current and future worth can be measured and improved through investment.

What is human capital management (HCM)?

You must need to know who to select people, who will prove as valuable resource for your organization. You should be capable enough to select most talented & ambitious people that will act as a valuable resources in your organization’s success story. You must aware of where your talent gaps are and how to get top performance with HCM (Human Capital Management) Software.

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Human capital management software which is specially designed for the help to Manage and maintain the organization work force. In other words HCM software is like enterprises, software that provide automate process like payroll, employee performance reviews, employee recruiting and employee training etc.

Human Capital Management System (HCM) is also referred to Human Resource Management System (HRMS) or Human Resource Information System (HRIS).

Structures Of HCM

­­­The Structures of in HCM system is required for configuration as per the organizational structures and their relationships. So it’s really important for a person to understand the true nature of human capital management system. The structure of Human Capital Management System is basically categorized into three sub-structures that are named as:

  1. Enterprise Structure
  2. Personnel Structure
  3. Organizational Structure

We will discuss each above mentioned heading with respect to the configuration & generic definitions.

1. Configuration of Enterprise Structure

Enterprise Structure_Basically includes Company Code, Personnel Area and Personnel Subarea. Before you start work with HCM you need to configure it with enterprise structure. You must know about how to configure from scratch. There are many modules, but you must need to configure HCM with your required modules first, as your top priority.

2. Configuration of Personnel Structure

Personnel Structure_Basically includes Employee Group, Employee Subgroups and Payroll Accounting Area. The configuration of Personnel structure means aligning your dashboard as per your requirements. It includes the Configuration of HCM module requirements with your own dashboard and personal structure.

3. Overview of Organizational Structure

Organization Structure_Includes Organizational Units, Jobs and Designations. Before you get started working with HCM software, you must have an overview about the organizational structure. You must collect information about the organization and its requirement about HCM system. Gather all data from a company which need for  functional & automate.

Personnel Administration (PA)

The Personnel Administration Section is fatherly sub-categorized into various things that you must be aware of all. Here I have discussed each of the one by one.

1. Transaction Codes and Infotype Maintenance

You must be aware of Transaction code and infotype maintenance individually and the time it’ll take for implementation. You should be aware of that, what will be the scenario of the implementation of transaction codes?

2. Configuration of Features - Default Values

Integration of features modules with default value of HCM software. Default value of all required data and configure with a thematic assembling. And also assign a default value each module.

3. Configuration of Personnel Number Range and Feature NUMKR

You must have knowledge about the Configuration of personnel number range and features of Human Capital management.

4. Configuration of Master Data Infotypes

All configurations with master data infotype. And how to arrange data with the help of infotypes.

5. Configuration on Evaluation Basis

Evaluation of all HCM Modules’ Configuration & their core basis requirements.

6. Configuration of Infogroups and Actions

The Configuration of all infogroups and their actions, accessibility rights that you need to give them as per client’s requirements.

7. Configuration of Dynamic Action

Make sure the configuration of the dynamic action of HCM System on your organizational structure.

8. Configuration of Screen Modification

While configuring the dashboard of (HCM) Human Capital Management System you need to configure the Screen & adjust its’ modification as per requirements.

Organizational Management (OM)

Organizational management is the most common way to manage the small & modern businesses. The organizational management is an approach in which the managers break downs all operations into different phases.

This division gives a clear picture of organization desired goals, and the fields that need to be improved. These unambiguous portray of destiny raise the organization response time towards internal & external uncertainties. Organizational Management basically includes 4 basic things that are:

  1. Planning
  2. Organization
  3. Leadership
  4. Resource Control

In the context of Human Capital Management System (HCM) structure, organizational management has its own importance that cannot be neglected.

Organizational Management (OM) actually comes in the Configuration of Enterprise Structure.Before starting the configuration HCM you should be aware of OM objectives, their relationships and some other configurative points that are mentioned below.

  1. Organizational Management Objects
  2. Relationships Among Organizational Management Objects
  3. Organizational Management Info types, Transaction Codes and Plan Version
  4. Configuration of Organizational Management Interfaces (Simple Maintenance, Expert Mode & Organization Staffing)
  5. Configuration of Evaluation Path
  6. Integration between Organizational Management and Personnel Administration
  7. Configuration of Number Ranges and Creation of Custom Objects

Time Management (TM)

Time Management (TM) skills are the most important one for an organization to progress towards their dreamed level. No organization can progress without having time management skills. Good organization got failed to meet their declared deadlines of projects because of poor time management.

The core objective of Human Capital Management (HCM) system is to provide a clear time management approach for your organization. Some people are naturally organized while others need to be work on it.

Smart business owners provide their workforce with efficient time management tools that only track organization entire year schedule, but also help them to make estimation of all periods that they must acquire to accomplish their project & meet deadlines.

With the help of Human Capital Management System (HCM) manager became capable enough to allot each employee a time slot as per their required work effort to complete a project.

Good time management (TM) provides clear the vision & target goals. Time Management (TM) tools usually include Activity Logs, To-Do Lists, Action Programs, Prioritization of Task and Task Scheduling. There are some points that belongs HCM System’ time management (TM) configuration these are:

  1. Configuration of Public Holiday Class and Holiday Calendar
  2. Configuration of Personnel Subarea Grouping for Work Schedule
  3. Configuration of Daily Work Schedule and Period Work Schedule
  4. Day Types
  5. Configuration of Work Schedule Rules and Work Schedule
  6. Infotpye 0007 and Feature SCHKZ
  7. Configuration of Time Data Recording and Administration (Absences - IT2001)
  8. Configuring Time Data Recording and Administration (Absence Quotas - IT2006)

Payroll (PY)

Payroll is a list of total number of employee’s work in an organization. But the term Payroll refers to the total amount of money that an organization pays to all its employees. In the organization database, it will be called as employees’ salaries, wages, bonuses and taxes. Usually account department of an organization deal with payroll functions.

The configuration of the Payroll system usually includes all below mentioned points, which you must be aware of before proceeding.

  1. Configuration of Payroll Area and their Feature
  2. Payroll Control Record and Payroll Process
  3. Payroll Period and Period Parameter
  4. Configuration of Pay Scale Structure and Features
  5. Configuration of Custom Wages types and its Tables
  6. Payroll Run and Remuneration Statement
  7. Display Payroll Result


Human Capital Management (HCM) system is enlisted with efficient feature of accurate reports generation system. It includes:

  1. Employee Salary Reports
  2. Employee Allowances Reports
  3. Employee Deduction Reports
  4. Employee Progress Reports
  5. Employee Attendance Reports

Overview of HCM

A cornerstone of successful Human Capital Management System (HCM) always provides larger & smaller enterprise immense benefits.

Because of the higher number of advantages that an organization can get from HCM, a huge number of organizations are switching to adopt such new innovation to maintain their image in the market.

The Automated reviews function of HCM system provides a dreamed picture of all important functions of workforces & make sure of information flawless flow within the different geological stations of an organization.

In short, we can say that HCM Software has opened new doors for all SEMs Enterprises’ evolvement. Now it’s time to say hello to new innovations!