Integrated HCM solutions are good for business, but why are so many organizations still using multiple vendors? Follow these three steps to maximize the benefits of integration.
The cost benefit of an integrated HCM system is an important consideration as finance leaders evaluate investments in technologies to improve productivity and profitability across all levels of the organization. The ADP Research Institute® finds that "having all the workforce data in one place globally takes Human Capital Management to entirely new levels. It enables companies to start doing workforce analytics and predictive modeling, increasing both efficiency and effectiveness across a global organization."
And while the Sierra-Cedar 2017/2018 HR Systems Survey says implementing an integration strategy could impact business outcomes by 20%, it finds that only 17% of organizations have a strategy for integrating HR applications, with 47% handling them on a case-by-case basis.
HR and financial executives should consider the following three steps to help establish a solid foundation for maximum benefit of any integration.
Gain Access and Ability to Analyze Data
Integrated HCM systems can have an impact on everything from planning and forecasting, to recruiting, managing, evaluating performance, and growing your human capital. Finance leaders who have access to timely, accurate data and the abiity to analyze data can leverage that information to bolster profitability, maximize employee retention, and increase efficiencies.
Since human capital is typically an organization's most important asset and its biggest expense, leaders can drive tangible growth in their organizations by taking a deeper interest in HR analytics. Organizations large and small will find that integrated solutions can help reduce departmental silos, eliminate cost redundancies, and foster greater transparency across the organization.
Finance leaders can look at critical HCM metrics such as overtime cost, turnover rate for high-performing employees, and management span of control, among others, to quickly identify outliers, root cause and potential solutions for improvement.
Assemble a Cross-Functional Integration Team
Finance and HR will need to work together across all functional areas of the business to create actionable measurements that benefit the business. While these metrics will likely differ from organization to organization, to be truly valuable, metrics should link directly to business results and tie HR to finance.
Create a Data-Driven Culture
As big data and analytics are used more as a catalyst for growth, finance and HR leaders can help improve accountability in their organizations by consolidating their human capital management applications and encouraging employees and leaders to rely more on a single source of data to build compelling business cases for change, additional investment and future growth.