With the business landscape under constant and rapid change, companies need a stronger focus on the connection between business strategy and workforce strategy. Business leaders must constantly reevaluate their talent to ensure they have the skills needed for an ever evolving environment.
This cannot be accomplished, however, if companies are riddled with data silos that prevent them from attracting, retaining, and managing the talent to support their business strategies.Consequently, solutions that combine enterprise resource planning and human capital management (ERP-HCM) can have a transformational effect on organizations, according to a survey of 505 executives across executive management, finance, HR, and IT conducted by Harvard Business ReviewAnalytic Services.
Survey respondents said these combined solutions enable better workforce processes, improve data stores, and support the rapid consumption of artificial intelligence (AI), machine learning, digital assistants, and other next-generation technologies. Combined ERP-HCM solutions are having a profound effect on chief information officers (CIOs) and IT departments as well. Some 79% of respondents said that improving data stores can make the CIO an enabler of growth in the organization.And 89% agreed that integrated reporting and analytics can lead to increased data sharing across HR and finance, too.
“IT can become the gatekeeper of a single version of the truth and make sure everyone is looking at the same data,” says Zachary Chertok, a research analyst at the Aberdeen Group. “IT needs to create that environment of analytic consistency that allows for the faster and better decision making that organizations require today. ”Integration, upgrades, and other resource-intensive tasks are reduced or eliminated by combining data and simplifying the technology environment. As a result, 35% of respondents said combined ERP-HCM solutions reduce the number of mundane IT tasks and allow IT departments to focus on more strategic projects.
That saved time could be devoted to, say, approaching businesses with ideas on how emerging technology can meet strategic goals—the kind of difference-making work that many IT departments find challenging todo while focusing on operational efficiency and “keeping the lights on.”But to gain the most benefits from these solutions, companies need to approach them in a new way. CIOs, chief financial officers (CFOs), and chief human resources officers (CHROs)must collaborate more closely, with the tech leader taking a critical role in easing potential issues between the two other departments.
“Companies need to elevate how they see HR data and link it to business strategy,” Chertok says. “The CIO can be the broker between HR and finance and encourage the CEO to green light the project by showing how a combined ERP-HCM solution can support critical business goals.”This paper explores the benefits that a combined ERP-HCM solution can bring to HR, finance, and the organization as a whole; the best approach to implementing the technology; and how the CIO, CFO, and CHRO can work together to ensure the technology propels business transformation.
Eliminating the Pain Points
IT departments must go beyond mere technology proficiency to meet competitive demands. Today, CIOs are under great pressure to provide technology that can help companies grow, innovate, and achieve strategic goals. Some 82% of survey respondents said the future success of IT depends on taking more steps to identify line of-business (LoB) pain points and offer solutions.Workforce strategies are a prime area for IT to focus its expertise.
These challenges include helping the business shape the workforce of the future, delivering human-based insights from multiple data sources, and, most important, providing a consumer-grade experience to the workforce.“Without integrated data, it’s extremely challenging to provide employees with the experience across things that matter to them, including onboarding and understanding their benefits,” she says.
The survey identified that a combined ERP-HCM solution can address these issues—and more. This technology allows HR and finance to collaborate more effectively on what-if forecasting, succession planning, and other key efforts that generate higher employee engagement. That may be only scratching the surface of the technology’s payoff.“A consolidated ERP-HCM solution provides value that most people don’t consider,” Chertok says. “This includes financial planning, response time, the timing of decisions, and the ability forHR and procurement to manage bigger workforces spread across more diverse departments with the same resources, if not fewer.”The impact these solutions have on CIOs and IT departments is no less significant.
A consolidated system allows IT to focus on the digital strategy and things that matter to the business, like implementing AI and RPA. ”A combined ERP-HCM solution supports advanced technology, like AI and machine learning, in multiple ways. In addition to freeing up IT’s time for such efforts, this technology provides the more comprehensive data stores that are needed to feedAI, machine learning, and other data hungry applications. No wonder two thirds of respondents said a combined ERP-HCM solution is a critical part of a company’s journey to embracing advanced technologies.
The biggest benefit of a combined ERP-HCM solution for IT is improving the user experience, cited by 52%of survey respondents. This findings peaks to both changing expectations about technology and the new role thatCIOs must take today to be effective leaders in their organizations. A focus on the user experience can reinforce the need for IT departments to move away from highly customized, on-premises solutions, Massmansays. “When you start from the viewpoint of the employee experience, you can make hard decisions to standardize processes and the way you deliver services.”The employee experience is also fundamental to the success of a combined ERP-HCM solution. “If you want to achieve ROI from a project, you need to improve the user experience,”says Andrew MacMillen, a research analyst at Nucleus Research.
As he explains it, the ROI derived from a combined ERP-HCM solution depends on having technology that will be used frequently by a large number of people.“If you are trying to introduce a tool that is less intuitive than a spreadsheet and does not perform substantially better, you will get no adoption because of the bad user experience,”MacMillen says. “If you account for the human factor and make the switch simpler, your job will be 100times easier.”
Data has become the fuel for better decision making. A combined ERP HCM solution allows finance andHR departments to collaborate more effectively and implement strategies that propel growth and meet strategic objectives. To execute these solutions successfully, the CIO, CFO, and CHRO must work together as a tight-knit trio.For example, when asked how a combined ERP-HCM solution should be presented to the board, 45%of survey respondents said a CIO should work with the CHRO and CFO to determine whether and explain why the company is ready for such technology now. These business leaders’ focus, respondents said, should be on how the combined solution can propel business transformation, rather than on cost reduction or tech components.
In sum, a combined ERP-HCM solution is a key enabler of workforce planning efficiency and future success. CIOs who work closely with their HR and finance counterparts to drive a combined ERP-HCM solution are seen as important strategic partners within their organizations.“HR and finance software come from very different histories,” Mac Millen says. “These two departments have entrenched ways of doing things that can lead to data silos and slow everything down.”“The CIO can be a force in helping overcome the inertia to change and allow everyone to see what they already know—if you want to make good decisions that lead to growth, you need to combine your HR and finance data in a consistent environment,” he adds.