Finance leaders must be able to navigate getting the most out of their legacy HCM system while simultaneously working on finding a new solution.
A legacy HCM system can be costly. As noted by Help Net Security, 93 percent of global IT decision-makers say that at least once a month, they experience network issues caused by legacy infrastructure, which ends up impacting the bottom line.
The challenge? Eighty-five percent of organizations are still "several years" away from fully implementing cloud-based digital technologies, according to Help Net Security. That means finance leaders must be able to navigate getting the most out of their legacy HCM system while simultaneously working on finding a new solution — and then ultimately managing the change onto the new system.
Here's a look at how the right data integration tools can help finance leaders get the most from legacy systems as they manage the cost of moving.
Make Data Decisions
The first challenge for finance leaders in shifting HCM systems? Dealing with historical data. What do you keep? What do you destroy? How much will it cost?
As noted by Chris Klein, Senior Vice President of Global HR and Payroll Solutions for the Spencer Thomas Group, "One of the most common overlooked costs is 'What do I do with all my history?'" Here's why: Vendors typically don't care about data histories; they're concerned with everything that happens after enterprises sign HCM contracts.
As a result, finance leaders need to make critical data decisions. This means creating an archive strategy. What do you keep, where, and for how long? As noted by GCN, organizations need to start by identifying the data they have and understanding why they have it. In some cases, regulatory or compliance guidelines apply and data must be kept for a specific amount of time. In others, data is kept because organizations "might" use it down the line — and while it's possible to pay vendors to handle historical data, it's a costly investment. It's best to keep what you need for compliance, what you're actively using for analytics and then consider cold storage or secure disposal for the rest.
For "the rest," ensure you know what your costs will be going forward.
"You really need to understand what your investment is going to be for how you keep the old data," Klein says.
While many vendors now offer data integration tools that help you shift information from legacy systems into the cloud, not everything you want to keep will make the transition. The result? Talk to your legacy provider. They may be able to offer an archive solution, or reduce your total cost if there's a significant amount of data to store but you're moving processes off premises. You've got options. If legacy providers aren't willing to compromise, take back your data and find another storage solution rather than paying too much for too little.
What should your new system look like? Many financial leaders make a critical mistake here by rebuilding familiar tools using new techniques because front-line employees and C-suite members are comfortable with their use. The problem, though, is that this naturally limits efficacy, in turn reducing your total ROI. For example, Banking Technology notes that 90 percent of decision-makers say their legacy systems contained "limitations that require manual processes."
Moving to a new HCM system offers the chance to automate tasks such as data entry and validation, both reducing error rates and increasing the amount of time HR professionals can spend managing human capital instead of checking and re-checking data values. These systems may take more time to learn up front, but in the long term, the data they can provide becomes much more valuable.
Familiarity often goes beyond simple process shifts to strike at the heart of "how things are done." If staff members believe that new systems aren't as user-friendly or efficient as legacy tools, they will find ways to avoid using these tools, or simply do the bare minimum while relying on old processes to complete critical tasks.
"The change management aspect is a huge part in all of these implementations," Klein says. You need a twofold approach. First, provide training for new tools and let staff ask questions. Make your timeline for integration clear, and explain how legacy solutions will be phased out. Next, make sure your vendor is up to the task.
"Make sure they're not pulling the wool over your eyes and saying 'that's just going to work,'" Klein says. Do your homework and discover which vendor has the reputation, reliability and data integration tools you need to compel change in your organization.
Shifting to cloud-based HCM doesn't happen overnight. Make the most of legacy systems by designing an archive strategy, updating agreements, forgoing what's familiar and pushing for change.
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