The word "integrated" is painfully overused in the software world and has different meanings depending on who is using it and why. In this case, the term refers to strategic HCM (Human Capital Management) solution modules that offer data sharing and interoperability across HR functions. Here are 10 reasons that integration is an important consideration when choosing an HCM solution.
1. Bottom-line results: Back up strategic HR imperatives with a well-integrated suite, and you enable your work force to pull together more efficiently toward better business performance. Make integration of key modules, such as performance and compensation, a top-line requirement. Otherwise, you may find your organization justifying higher IT expenses without improving the bottom line.
2. Work force visibility: Clear visibility into the strengths and weaknesses of the work force lets executives identify potential gaps that affect productivity. Accurate HR data helps them forecast future needs and measure the true impact of performance and compensation systems.
3. Strategic tools: Not all suites are created equal. Presently, some solutions deliver functionality that spans the enterprise and is more natively integrated at the user-interface level. Others offer spotty HR capabilities as part of large ERP (Enterprise Resource Planning) systems but lack deeper capabilities or interoperability among modules. Homegrown implementations with do-it-yourself integration take longer and often lead to dead ends.
4. No ERP wait-and-see: The larger ERP suites offer modules that sound like they cover the bases. However, most are now in wait-and-see mode when it comes to delivery. Analyst group AMR Research said in its 2007 "The Strategic HCM Landscape" report that "ERP can do HCM, but ask yourself: can you do HCM in ERP? For now, unless you have a very disciplined organization with significant system resources with domain expertise in HR, expect to pay in professional services help what you may have saved in HCM software license fees bundled into ERP."
5. Higher quality, lower costs: To achieve this goal takes the collective impact of hundreds of strategically directed tasks executed more efficiently through integrated tools. You may be surprised at how quickly an integrated solution lets you reduce costs and hit recruitment goals. Advertising, resume screening, interviewing and other processes are better automated to further enhance the bottom line.
6. Work force development: Integrated HCM applications help you assess, promote and compensate with clarity. You can clearly define job-specific competencies for key positions across the enterprise. Then, it becomes much easier to enhance HR business processes and optimize the work force toward corporate-defined models.
7. Training/performance alignment: Training helps employees better manage their careers and fully develop their potential. HR can better support this with job-development planning and innovative performance-review tools. These are naturally aligned with proactively managed learning processes and data, the development and deployment of course content and exams, and secure auditing and reporting of compliance.
8. Retention through rewards: All too often, rewards are focused mainly at the sales and management levels. A companywide pay-for-performance model enables HR to promote positive turnover and retain top talent by compensating preferred behaviors and results based on objective performance metrics.
9. Policy compliance: Consistent HR policy enforcement across the enterprise keeps the work force on track and boosts corporate performance. An integrated HR system of record provides quick alerts to inconsistencies and greater accountability, enabling management to remove roadblocks and move the enterprise toward its full potential.
10. Preemptive succession planning: Sudden executive departures can leave a firm spinning out of control or severely disabled. But the more visible departures are only the tip of the iceberg. A deep, corporatewide succession strategy that incorporates competencies, skills and career-development plans can mitigate flight risks at all levels of the organization.
The Bottom Line
The HR suite selection process requires the evaluation of many variables. Many organizations struggle with confusing and inaccurate vendor marketing claims that make picking the right delivery model and its associated bells and whistles more difficult than it needs to be. To make a smart choice, map the above benefits to your own HR needs, then thoroughly investigate how the most viable HCM vendors measure up.
For more information about HCM and other HR issues, visit the HR Resource Center. There, you'll find in-depth research, topical research briefs and advice from Focus Experts about common HR themes and problems.
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