Making the Case: Integrated Data Systems Vs. Legacy HR Overhauls
What's the value of unified and accessible HR data? For global organizations, the growing importance of big data and the need for agile HR efforts presents a compelling case — why not make the move from legacy solutions to integrated data systems?
But it's not always so simple. Existing legacy applications, data privacy and compliance agreements and the existing legislation of other large markets such as Europe, Brazil and China may limit efficacy of new HCM tools.
Should you integrate or overhaul? Here's the case for both.
Privacy Potential
Differing markets demand different approaches to privacy. In the U.S., for example, digital privacy laws lag behind technological advancement while specific legislation such as HIPAA and private industry standards such as the PCI DSS mandate how employee, patient and consumer data must be collected, handled and stored.
In Europe, meanwhile, new privacy regulations demand a much more active role from corporations that store or process any data within EU countries, as SiliconANGLE.com notes. Not only are individuals granted basic rights over their online presence, but compliance and use challenges must be answered in a timely fashion. In addition, the General Data Protection Regulation (GDPR) applies equally to all EU member states without the need for nation-specific legislation. Other countries, such as Brazil, are in the formative stages of data privacy legislation, meaning that businesses must tread carefully when seeking consent or storing information.
The result? For organizations running multiple HR data portals that comply with existing laws, a legacy refresh may be the easiest way to maximize value. If HR data management is just now emerging on the C-suite radar, integrated HCM systems may offer the best ROI as they provide the foundation of relatively future-proof data deployments.
Compatibility Concerns
How do you handle data within your organization? Is there a data management strategy in place, or are different departments effectively "siloed" from one another, with each using its own form of data classification and storage? If you're already running a legacy system that effectively handles data across departments, then anonymizes and combines it for HR use, adopting a new solution probably won't pass budget review.
Since most legacy solutions weren't designed to handle this level of data portability and uniformity, however, it's often worth considering the value of an HCM system that automatically collects relevant data, strips it of critical identifiers and then delivers it to HR professionals.
For global organizations this is especially critical since geographical distance tends to create information interference. What seems clear at local offices can become jumbled at worldwide headquarters — like a bad game of "telephone" except the outcome is reduced strategic impact. The bottom line? If your data isn't currently compatible across the organization, you need a new solution.
Security and Access
According to Human Resources Director Magazine, the words of 20-year HR veteran Frank Riccardi, senior vice president and general manager of Cornerstone OnDemand's business in Asia-Pacific and Japan, ring loud: "We've just scratched the surface of where big data can take us."
Given the rise of cloud-based, data-enabled and analytics-capable HR systems, Riccardi's assertion has merit. Emerging solutions can help businesses make better hiring decisions, predict the long-term behavior of employees and design solid, data-driven human capital investment strategies.
But collecting and using HCM data also opens the door to potential security and access concerns. Who's using your data? Why? Is data routed from other countries to corporate headquarters properly encrypted? Securely stored? While legacy tools may provide at-the-moment assurances that information is protected, once HR data makes the jump from local source to international pipeline there's no guarantee of end-to-end security. Here, HCM systems excel — firms get the benefit of a single access portal and security structure to ensure HR professionals always know exactly where data is, who has access and what information has been collected.
Should You Spend on HCM or Refurbish Existing Systems?
Upfront, the costs often skew in favor of overhauling legacy solutions — after all, why pay for an entirely new framework if current tools are still working as intended? But it's not so simple. First, locally owned technology has a finite lifespan, even if it's occasionally upgraded with more capacity or newer software. In addition, businesses looking to empower regional mobility and get information about their workforce worldwide are naturally limited by disparate legacy systems. The other side of the coin? Brands with global sales presences, but highly localized operations and manufacturing procedures.
Assessing the cost of integrated data systems comes down to line-of-business aims. Are you looking for more control over local processes and better insight into local talent? Refurbished legacy systems may be your best value. Are you hoping to connect disparate data sources to empower a globally driven workforce? Then new HCM tools can justify upfront costs with long-term benefits.
In HR, there's no hard-and-fast rule when it comes to HCM. If legacy systems are "good enough" and local data trumps global collection, an overhaul may provide solid ROI. But if you're looking to unify global data, comply with changing privacy laws and improve digital security, new HCM deployments probably offer the best value for your budget.
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