German state seeks comprehensive operational, consulting and development services for SAP HCM reference model serving public administration across Hesse.

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Germany’s federal states manage some of Europe’s most complex public sector HR systems, and Hessen, with 6.3 million residents and one of Germany’s largest education systems, sits at the center of this administrative challenge. The Hessische Zentrale für Datenverarbeitung (HZD), the state’s central data processing agency, has opened a €9.5 million framework for SAP Human Capital Management support services. With 1,750 person-days required annually and custom components serving tens of thousands of public employees, this contract represents one of the most substantial SAP HCM opportunities in German public administration this year.

The Opportunity

Contract value: €9,499,000.00
Duration: 12 months (extendable to maximum 4 years)
Buyer: Land Hessen (State of Hesse), represented by Hessische Zentrale für Datenverarbeitung
Location: Wiesbaden, Hesse
Deadline: 20 February 2026
Procedure: Open
Language: German only

This public tender in Germany covers operational support, strategic consulting, and development services for the Hessian SAP state reference model (LRM HR). Services encompass the full SAP HCM suite including Personnel Administration (PA), Organization Management (OM), Position Planning Management (SPM), Time Management (PT), Event Management (VM), Personnel Recruitment and Development (PB, PE), Personnel Cost Planning (PKPL), Travel Management (TM), Payroll (PY), and Pension Administration (VADM).

Technical scope includes ESS applications such as e-Recruiting and absence management, Electronic Personnel File, print and output management, authorization management, programming, Learning Solution, HANA transformation, artificial intelligence implementation, and mobile ESS processes on the Business Technology Platform (BTP).

Special emphasis falls on supporting the Hessian Ministry of Education (Kultusministerium) with custom SAP components including PPB (Personnel and Budget Planning), BeKA (Demand, Capacity and Work Planning for study seminars), and VMQUAK (SAP Event, Qualification and Accreditation Management). These custom solutions require adaptation for HANA transformation and migration to future-oriented platforms aligned with SAP’s development strategy.

Estimated workload: 1,750 person-days per year, totaling 7,000 person-days over the maximum 4-year contract period.

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Authority Background and SAP HCM Context

Buyer characteristics:

• Entity: Land Hessen, represented by Hessische Zentrale für Datenverarbeitung (HZD)
• Type: Regional government agency
• Main activity: General public services, central data processing for Hesse
• Location: Wiesbaden, Hesse’s capital city
• Population served: 6.3 million residents across Hesse
• Public sector workforce: Tens of thousands of employees across state ministries, education system, and public administration
• System landscape: Multiple SAP systems in HCM environment, service portal, and interconnected system landscapes

The Hessische Zentrale für Datenverarbeitung functions as Hesse’s central IT service provider, managing digital infrastructure and applications for state government operations. This includes the Hessian SAP state reference model (Landesreferenzmodell), a standardized SAP implementation serving multiple state agencies with shared processes and custom components.

The Ministry of Education represents the largest user base, managing personnel administration, payroll, and specialized processes for teachers, administrators, and education professionals across Hesse’s comprehensive school system. Custom applications like VMQUAK handle qualification management and professional development for educators, while BeKA manages capacity planning for teacher training seminars (Studienseminare).

The authority’s technical environment includes both SAP Backend systems and the Service Portal, with ongoing transformation to HANA database technology and migration of custom solutions to modern platforms including the Business Technology Platform (BTP). This represents significant technical complexity requiring vendors with deep SAP HCM expertise and experience managing custom developments through platform migrations.

Procurement context:
Similar SAP HCM frameworks in German public administration typically run 3-4 years with option years, supporting continuous operational requirements while allowing periodic market testing. The estimated 1,750 person-days annually suggests a mid-sized support team of 7-9 full-time equivalents, indicating substantial ongoing requirements for incident management, change management, and development projects.

Competitive Landscape: SAP HCM Specialists Dominate

The competitive analysis reveals a market dominated by specialized SAP service providers with deep public sector experience, predominantly German-based firms with minimal cross-border competition.

Market leaders by contract value:

SINC leads decisively with €419 million across 56 contracts (€7.6 million average), representing the strongest position in German public sector SAP services. SINC’s portfolio spans multiple SAP modules with particular strength in complex custom development and HANA migrations.

Swiss IT Security Deutschland SINC follows with €275 million across 42 contracts (€6.6 million average). Despite the Swiss parent company name, operations are Germany-based, specializing in secure SAP implementations for government clients with stringent data protection requirements.

URANO Informationssysteme secured €163 million across just 12 contracts (€14 million average per contract), indicating focus on large-scale, high-value frameworks. URANO specializes in SAP HCM for public administration with particular expertise in payroll and personnel cost planning.

SVA System Vertrieb Alexander won €116 million across 9 contracts (€13 million average), another large-contract specialist focusing on SAP infrastructure and basis services supporting HCM implementations.

CGI Deutschland captured €111 million across 8 contracts (€16 million average), representing the highest average contract value. As part of the global CGI group, they bring enterprise-scale SAP capabilities with strong public sector credentials.

PICO Engineering secured €58 million across 10 contracts (€7.3 million average), specializing in technical SAP development and custom component creation.

ADESSO SE won €34 million across 8 contracts (€11 million average). This German IT consultancy focuses on SAP HCM consulting and business process optimization for public sector clients.

Staffing specialists: HAYS (€7.8M across 16 contracts) and STHREE TEMP Experts (€11M across 7 contracts) provide contract SAP specialists and temporary expertise, often supporting larger prime contractors.

Geographic concentration:
The market shows overwhelming domestic preference with German contractors winning €2.1 billion across 405 contracts (average €5.4M). International presence is minimal: Austria (€2M/2 contracts), Belgium (€9M/1 contract), and Israel (€2.1M/1 contract) together represent less than 1% of market value.

Market insights:
Contract values ranging from €6-16 million average for SAP HCM frameworks align with this tender’s €9.5 million baseline, suggesting HZD has calibrated pricing realistically for the German market. The dominance of specialized SAP service providers over general IT contractors indicates technical depth and SAP certification carry more weight than broad consulting capabilities.

The complete absence of non-German competition in HCM contracts reflects language barriers (German-language requirement), data residency concerns for sensitive personnel data, and preference for contractors with established presence in German public administration.

Commercial and Procedural Requirements

Procurement structure:
Single-lot framework covering all SAP HCM components and services. The 12-month initial term with extension to 4 years maximum provides flexibility for performance-based renewal while securing long-term support continuity.

Award criteria:
Quality and price evaluation, though specific weighting is not disclosed in the contract notice. German public procurement typically weights quality 60-70% for complex IT services, with price carrying 30-40%, though individual authorities set their own ratios.

Language requirement:
German language mandatory for all submissions. This effectively limits competition to German-based contractors or international firms with established German subsidiaries and native-speaking personnel. Technical documentation, consulting deliverables, and all communications must be in German.

Technical requirements:
Contractors must demonstrate expertise across:

• SAP HCM modules: PA, OM, SPM, PT, VM, PB, PE, PKPL, TM, PY, VADM
• Development technologies: ABAP, ABAP OO, WebDynpro, Fiori, Business Server Pages, Web UI, Java
• Modern platforms: HANA, Cloud applications, Business Technology Platform (BTP), artificial intelligence integration
• Custom component development: Experience creating and maintaining customer-specific SAP solutions
• Migration expertise: HANA transformation experience, platform migration from legacy systems
• Public sector knowledge: Understanding of German public administration HR processes, data protection requirements, and regulatory compliance

Service categories:
The framework encompasses three distinct service types requiring different skill sets:

1. Operational support (Betrieb): Incident management, change management, ongoing system maintenance, user support for standard and custom components
2. Consulting services (Beratung): Strategic advice on process optimization, business process redesign, technology roadmap development, methodological coaching following professional standards
3. Development services (Entwicklung): Custom component creation, programming in ABAP/Java/Fiori, customizing, technical implementation of new business processes, HANA transformation work, AI integration

Workload structure:
The estimated 1,750 person-days annually breaks down across multiple work streams: incident resolution, change requests, development projects for new features, HANA transformation activities, and strategic consulting. The detailed lot description emphasizes the need for comprehensive process knowledge and specific module and programming expertise across Hesse’s interconnected SAP system landscape.

Service delivery expectations:
Contractors must support not only individual SAP systems but also interactive processes between system landscapes, requiring holistic understanding of data flows and integration points. Work includes know-how transfer through workshops, creation and presentation of documentation, and structured handover of work results.

Submission details:
Tender submissions must be made through the Hessian procurement portal at https://vergabe.hessen.de, which requires vendor registration and digital submission capabilities. Questions to the contracting authority should be directed to vergabestelle@hzd.hessen.de or phone +49 611340 0.

Strategic Context: German Public Sector Digital Transformation

This procurement sits within Germany’s broader public sector digital transformation, where federal states modernize administrative systems while navigating the transition from legacy SAP ERP to S/4HANA. Hesse’s emphasis on HANA transformation, cloud readiness, and AI integration reflects strategic priorities shared across German Länder.

The custom components (PPB, BeKA, VMQUAK) represent significant investment in bespoke solutions tailored to German public administration requirements that don’t exist in standard SAP. These must be re-platformed for modern SAP architectures without disrupting operations for thousands of users dependent on daily functionality for payroll, personnel administration, and qualification management.

The integration of artificial intelligence and mobile capabilities on BTP signals Hesse’s ambition to modernize user experience beyond traditional SAP interfaces, particularly for employee self-service functions. This requires contractors capable of bridging traditional ABAP development with modern cloud-native approaches.

Takeaways

This opportunity suits contractors who:

• Hold SAP HCM expertise across multiple modules with proven public sector delivery
• Maintain German-speaking teams with understanding of German administrative processes
• Possess HANA transformation experience and cloud migration capabilities
• Can staff projects with 7-9 FTE availability over multi-year timeframes
• Demonstrate custom SAP development capabilities in ABAP, Fiori, and BTP technologies
• Understand German data protection requirements for sensitive personnel data

Key considerations for bidders:

• German language proficiency is non-negotiable for all team members
• Experience with Hessian systems or similar German Länder SAP implementations provides significant advantage
• Quality evaluation likely emphasizes technical approach, team qualifications, and methodology over price
• Understanding of education sector requirements (particularly teacher administration) strengthens proposals
• HANA and BTP capabilities are essential, not optional—legacy SAP-only expertise insufficient
• Wiesbaden location suggests expectation for regular on-site presence, though remote work arrangements may be negotiable

Market positioning analysis:
The €9.5 million value over 4 years positions this as a mid-to-upper tier SAP HCM framework in the German public sector market. Comparable contracts average €6-14 million, suggesting competitive pricing requires rates around €1,200-1,400 per person-day for blended teams of senior architects, developers, and junior consultants.

Prime contractors like SINC, URANO, and CGI typically lead such frameworks with subcontracting arrangements for specialized capabilities. Smaller firms might pursue roles as specialized subcontractors for specific modules (e.g., Payroll, Learning Solution) or technical specialties (e.g., HANA migration, BTP development) rather than competing as prime contractors.

Closing

Hessen’s €9.5 million SAP HCM support framework represents more than routine system maintenance—it’s a multi-year partnership to modernize one of Germany’s largest state HR systems while ensuring uninterrupted service for tens of thousands of public employees. With HANA transformation, cloud migration, and AI integration on the roadmap alongside daily operational support, the successful contractor will help shape how Germany’s fifth-largest state manages its public workforce for years to come.

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