Hybrid HCM: PeopleSoft & Oracle Cloud Coexistence

Hybrid HCM: PeopleSoft & Oracle Cloud Coexistence

Synopsis: PeopleSoft uses perpetual licensing. Oracle HCM Cloud uses subscription licensing. Running both systems in parallel requires careful planning to avoid duplicate spend.

For a better understanding, read our ultimate guide, Oracle HCM Cloud Licensing Overview.

Step 1 – Understanding PeopleSoft Licensing in a Hybrid Model

A PeopleSoft license is typically perpetual. This means you made a one-time purchase for the software and continue to use it indefinitely. During a coexistence period, that perpetual license remains in effect.

However, you will still owe annual support fees if you want updates and help from Oracle. It’s important to know how PeopleSoft licensing works so you can manage costs while using PeopleSoft on-premises alongside Oracle Cloud.

Checklist: PeopleSoft Hybrid Licensing Basics

• ✔ Perpetual license stays active
• ✔ Annual support continues during coexistence
• ✔ Modules remain licensed by the number of users or employees
• ✔ Upgrade projects still required for new releases
• ✔ Self-service licensing may stay in scope if still used

Table: PeopleSoft Hybrid Framework

In summary, your PeopleSoft costs continue until you intentionally reduce or cancel support. The perpetual license doesn’t expire, but you keep paying support unless you take action.

Read how they differ in licensing: Oracle HCM Cloud vs. PeopleSoft.

Step 2 – Understanding Oracle HCM Cloud Licensing in a Hybrid Model

Oracle HCM Cloud uses a subscription model. You pay per employee (or per user), usually on an annual or monthly basis, as part of a term contract. In a hybrid scenario, you might start a cloud subscription for a portion of your workforce or certain modules while still running PeopleSoft.

The cloud subscription includes support and regular updates. It’s crucial to understand the cloud pricing structure so you only subscribe to what you need during each phase of migration.

Checklist: HCM Cloud Hybrid Licensing Basics

• ✔ Subscription pricing applies (ongoing pay-as-you-go)
• ✔ Priced per employee per month (or per named user for some modules)
• ✔ Some modules use specialist user metrics (e.g., HR admins or recruiters)
• ✔ Support is included in the subscription fee
• ✔ Contracts are term-based (commonly 1–5 year commitments)

Table: HCM Cloud Subscription Framework

With HCM Cloud, costs will scale up as you migrate more employees and modules to the cloud. Start with a small scope and expand, so your subscription cost grows in step with your rollout.

Step 3 – Identifying Overlapping Functionality

When running PeopleSoft and Oracle HCM Cloud together, you need to identify areas where both systems provide the same functions. Those overlapping areas are where you risk paying twice – once for PeopleSoft licenses/support and again for cloud subscription fees.

For example, if both systems handle Core HR or performance management at the same time, you’re effectively double-paying for that capability. Map out which modules and features are duplicated during each phase of coexistence.

Checklist: Overlap Areas

• ✔ Core HR data management (employee records in both systems)
• ✔ Talent modules (performance, succession, learning in both)
• ✔ Time tracking and absence management
• ✔ Payroll processing or integrations
• ✔ Employee self-service features

Table: Overlap Risk Map

Identifying these overlaps early is critical. It allows you to decide where to cut one system off or limit usage, so you don’t pay two vendors for the same result.

Step 4 – Strategies to Avoid Paying Twice

To control costs, organizations must be proactive in license management during coexistence. The goal is to avoid double licensing for the same functionality.

Several strategies can help: phasing in cloud modules one at a time, timing when you activate (and start paying for) a cloud service to coincide with the retirement of a PeopleSoft module, and adjusting support contracts.

You might also consider reducing the scope of PeopleSoft (e.g., dropping modules or users) as you migrate those functions to the cloud.

Checklist: Cost Avoidance Tactics

• ✔ Phase modules gradually rather than all at once
• ✔ Delay activating HCM Cloud modules until needed in production
• ✔ De-scope or turn off unused PeopleSoft modules to reduce support costs
• ✔ Align PeopleSoft support renewals with cloud go-live dates
• ✔ Review module dependencies before dropping anything (ensure no chain reactions)

Table: Dual Cost Avoidance

The key is timing. By aligning contract dates and phasing the migration, you can minimize or eliminate periods where you’re paying two sets of fees for the same capability.

Read about HCM cloud costs, Oracle HCM Cloud Pricing Guide: Modules, Costs, and Budgeting Examples.

Step 5 – Sequencing PeopleSoft to HCM Cloud Functions

How you sequence the migration matters for both operational success and cost management. Many organizations find it best to move less critical or standalone functions to the cloud first.

For example, talent management modules (performance reviews, learning, recruiting) often migrate early because they can run somewhat independently of Core HR.

Core HR (the main HR records system) is usually migrated later, once peripheral modules are in place. Payroll is frequently last, as it’s complex and may require all core data to be settled in the new system.

Checklist: Sequencing Steps

• ✔ Identify which modules will move first (e.g., talent or recruiting)
• ✔ Map integrations between PeopleSoft and Cloud for each phase
• ✔ Consider phasing talent modules before the core HR module
• ✔ Plan to tackle payroll last in the sequence
• ✔ Confirm data flows so both systems stay in sync during transition

Table: Sequencing Framework

Choosing the right sequence prevents disruption. It also means you can time the ramp-down of PeopleSoft modules as soon as their cloud replacements are live, thereby limiting the time you pay for both.

Step 6 – Support and Maintenance Management

Running PeopleSoft on-premises and Oracle HCM Cloud together means you have two support models running simultaneously. For PeopleSoft, you continue with Oracle’s annual support (or possibly third-party support if you chose that route) to get patches, fixes, and help desk support.

You will need to keep applying PeopleSoft updates (especially for critical fixes or regulatory changes) until you retire it. On the cloud side, Oracle automatically manages updates, and your subscription includes support services.

Be prepared for the fact that your team may need to manage both an on-prem upgrade cycle and cloud updates concurrently during coexistence.

Checklist: Support Considerations

• ✔ PeopleSoft support remains an annual contract (unless you end or reduce it)
• ✔ Oracle HCM Cloud support is embedded in the subscription
• ✔ Continue applying PeopleSoft patches and updates until migration is complete
• ✔ Cloud updates occur automatically (keep an eye on release notes)
• ✔ Expect a temporary increase in support workload with two systems live

Table: Support Overview

During the overlap period, you’re essentially maintaining two environments. This parallel support approach adds cost and work, so plan your staffing and budget accordingly until you can fully switch to the cloud.

Step 7 – Managing User and Employee Counts Across Systems

Licensing costs for both PeopleSoft and Oracle HCM Cloud depend on the number of users or employees. In a hybrid HCM architecture, it’s important to keep these counts clean and aligned. You don’t want to be caught paying for an employee twice or missing a count that triggers compliance issues. For PeopleSoft, ensure you’re not over your licensed number of users/employees.

For HCM Cloud, include only employees who are actually on the cloud system, if possible (for example, if you roll out by region or department, the subscription might be sized to that group initially). Remove or archive inactive employee records in both systems to prevent them from being counted in licensing totals.

Checklist: Count Alignment

• ✔ Align PeopleSoft HR records with who is in Oracle Cloud to avoid overlap
• ✔ Track which employees are using which system during each phase
• ✔ Avoid double-counting the same individuals for cloud subscription metrics
• ✔ Remove or deactivate terminated employees from active license counts
• ✔ Keep a clear migration roster to know which employees have moved to the cloud

Table: Count Alignment Framework

Being diligent with user counts prevents unexpected bills. For instance, if Oracle HCM Cloud is priced per employee, you want to delay adding an employee to the cloud system until they actually start using it, especially if you are phasing deployment by groups.

Step 8 – Contract Timing and Renewal Planning

One of the biggest cost-saving levers in a coexistence scenario is strategically timing your contract renewals. PeopleSoft support is renewed annually on a set schedule – often in the same month each year. Oracle HCM Cloud subscriptions will have their own term and renewal dates. You should aim to synchronize these timelines to minimize overlap.

For example, suppose your PeopleSoft support comes up for renewal next June, and you plan to go live with some cloud modules in July. In that case, you might negotiate a shorter renewal or a partial reduction in support for PeopleSoft. It’s also wise to negotiate caps (uplifts) on any price increases in both agreements. Oracle’s on-prem support typically has small yearly increases (or caps), whereas cloud contracts might not automatically cap renewal hikes unless you negotiate it.

Checklist: Renewal Planning Actions

• ✔ Align PeopleSoft support renewal dates with cloud launch milestones
• ✔ Negotiate caps on support fee increases or cloud renewal price hikes
• ✔ If possible, reduce PeopleSoft support scope (drop modules) as you progress
• ✔ Plan cloud subscription terms to end or renew after you stabilize onthe cloud
• ✔ Keep renewal cycles synchronized to manage budgeting easily

Table: Renewal Strategy

By carefully timing when contracts expire or renew, you avoid getting stuck paying full support on PeopleSoft after you’ve largely moved to the cloud. It also gives you negotiation leverage – for example, you can tell Oracle you might drop certain PeopleSoft support at renewal if the cloud is replacing it, which could encourage better pricing on the cloud side.

Step 9 – Building a Multi-Year Hybrid Cost Model

A multi-year cost projection is essential to navigate the hybrid period. You’ll want to forecast how PeopleSoft costs decline, and Oracle HCM Cloud costs rise over the course of the migration. Start by mapping out your timeline: which year each module migrates, and when you plan to fully retire PeopleSoft. For PeopleSoft, project the annual support fees each year (factoring any expected percentage increases or planned support cancellations for certain components).

For Oracle HCM Cloud, project the subscription fees as you add more employees and modules each year. Don’t forget to incorporate any one-time costs (such as implementation services, data migration, or overlap infrastructure). Having a clear cost model will help justify the project and avoid budget surprises.

Checklist: Forecast Steps

• ✔ Outline PeopleSoft support costs for each year of coexistence
• ✔ Estimate HCM Cloud subscription fees growth as more users migrate
• ✔ Incorporate the planned module rollout schedule into the cost timing
• ✔ Account for changes in workforce size that affect license counts
• ✔ Set a target decommission date for PeopleSoft and include any ramp-down costs

Table: Hybrid Forecasting Framework

By visualizing the costs over, say, a 3-5 year horizon, you can clearly see the peak of overlap spending and plan for it. A strong forecast also helps leadership understand that any period of double spending is temporary and controlled, ultimately leading to a full switch to the cloud and long-term cost efficiency.

5 Expert Takeaways

1. PeopleSoft licensing continues – Your on-prem PeopleSoft licenses (and support fees) remain in force until you actively reduce or terminate them. Plan for those costs until cutover.
2. HCM Cloud spend ramps up – Oracle HCM Cloud subscription costs will grow in stages as you migrate more functions and users. Start small and increase spending only as needed.
3. Map and avoid overlap – Identify overlapping functionalities early and manage them. Don’t pay for the same feature in both systems longer than necessary.
4. Align contracts to save money – Coordinate the timing of support renewals and cloud contract start and end dates. Aligned contracts prevent duplicate payments and provide negotiation leverage.
5. Forecast the hybrid period – Build a multi-year cost model for the transition. A clear forecast helps you anticipate the budget impact and demonstrates a path to eventual cost savings once PeopleSoft is fully retired.

By following these steps, HRIT and procurement teams can confidently navigate a hybrid coexistence of PeopleSoft and Oracle HCM Cloud. A careful, phased approach with attention to licensing details will protect your budget and ensure a smooth transition to the cloud.

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