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This forum is used to share and exchange experiences, lessons and learning about software selection, software implementation and software ROI for Human Resource Management (HRM) systems and Payroll Software Applications.

 

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Increasing ERP Value with Integrated HR and Payroll

Centralization Delivers Increased Automation and Information

If your company could use the existing business data you already generate to create new competitive insights and leverage even greater productivity, you'd probably do it in a heartbeat. Enterprise software analyst Albert Pang believes that some of the best information your company isn't yet using to its fullest can be discovered by integrating your Enterprise Resource Planning (ERP) software system and your payroll and human resources (HR) applications.

The idea, says Pang, who founded independent research firm, Apps Run The World, after working as an enterprise software analyst for Framingham, Mass.-based IDC for 11 years, is that companies are running so many disparate applications that critical data connections are often not being made. To fix that, Pang suggests its time for businesses to look at integrating their payroll and HR systems more tightly with their ERP systems. "It's long overdue," Pang noted in an interview. "The world needs a much more streamlined and integrated approach."

The more detailed data businesses have, the easier it is to make timely decisions, plan strategy and leverage your workforce to its highest potential, Pang advises. "A typical HR system now might only be used by the HR department, but increasingly your line of business managers would want to have access to that data to respond to market changes," Pang noted. "They really want to have a much more responsive type of system and ERP systems with talent management modules would help."

Such a comprehensive information system could tie e-recruitment, employee performance management, e-learning and compensation modeling into the ERP mix, giving decision makers a great new source of data for decision-making, he said. "I think the common denominator is that as companies are beginning to aggregate a lot of data about their employees, they can see how they perform in their jobs and how they are gaining in their competencies," Pang noted. "You really want to have that ability to see into that data and review their skill sets and how they are performing over time. That makes a lot of business sense."

In doing this, Pang says, your company will be able to predict how your employees will perform in various projects and help them really grow their careers. "I think a lot of that is not being addressed right now." Traditionally, businesses evaluate staff once a year instead of having the means to watch their ongoing progress on a more interim and frequent basis.

There are other benefits as well to bringing Human Resources and payroll into your existing Enterprise Resource Planning system, Pang said, including easing the workloads and budgets of your IT staff. "The IT team can manage fewer enterprise software applications and you'll see a lower cost of ownership," he explains. "You can really reduce your support and maintenance costs when they are all running on the same platform" and are integrated and consolidated, rather than on separate costly platforms.

You can also reduce user learning curves and training costs by reducing the number of software user interfaces your staff need to be familiar with as part of their job responsibilities. These kinds of decisions are being considered more often today by organizations as they re-evaluate their software application portfolios, IT budgets and business needs, Pang said.

"People want to have a global view of their systems," he noted. "Payroll is not an island unto itself anymore." Lines of business are more involved in e-recruiting, performance management and more and are IT staff are adding these functions to complement their payroll and HR systems. "All of these things will have to be integrated in some form or fashion," Pang warned.

Many ERP applications have payroll or HR automation included or that can be plugged in and expanded, but many companies are not taking advantage of these options. Some such add-ons or built-in components are often rudimentary and must be improved to add the necessary functions.

These possibilities make it a good time to take a closer look and see how this strategy could potentially help your business, your managers, your employees and your bottom line. Just how important could this new trend be for your company? Huge, Pang said. "Having a fully integrated information system based on your ERP application would be the critical missing link there."

 

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