ERP cloud migration can be boosted by HCM integration

Nancy J. Delong

ERP cloud migrations current opportunities to streamline processes and strengthen efficiencies. But, in spite of the promised improvements, positive aspects of the migration are frequently not recognized, and failures are typical.

1 explanation for failure is the deficiency of ERP integration with human funds management techniques, in accordance to Pritam Dutta, principal at ArcLight Consulting, an Oracle HCM and ERP implementation provider in Burlington, Mass.

ERP and HCM techniques serve various functions in the company. ERP underpins small business-essential processes these as finance, accounting, procurement and source chain and HCM techniques automate and simplify HR processes these as payroll and vocation progress. Signing up for these techniques underneath a typical info architecture in the cloud allows companies to strengthen processes, Dutta explained.

In this Q&A, Dutta explains why ERP cloud migrations could operate into difficulty, and why integrating cloud ERP and HCM techniques could be the key to a migration’s achievements.

What are the greatest failure points of an ERP cloud migration?

Pritam Dutta: The No. one spot where legacy clients fall short is that they consider and carry too a great deal of their outdated legacy customizations into the cloud. They don’t undertake one crystal clear cloud theory, which is standardization. When you select a cloud item, you’re inherently accepting that your small business can operate on an eighty-twenty or even ninety-ten rule [for customizations]. When we chat to shoppers, we talk to how they’re so various from their other business competition in the cloud that they will need to go a hundred, two hundred or one,000 customizations about.

Pritam DuttaPritam Dutta

A cloud migration need to end result in more simple processes, which need to guide to improved adoption from end users, but that’s not always the scenario, why?

Dutta: Standardizations need to push simpler adoption, and it commonly does on the worker side. We commonly see adoption troubles on the administrator side because they’re used to customizations beating info or method deficiencies. Several legacy deployments have these customizations that act, effectively, like a nanny, and they have hundreds of these. So, they’re used to the ‘nanny’ telling them [what to do or not do]. But when they get to a standardized method, you will find nothing at all there.

So, you will find nothing at all telling them what to do subsequent. How do you prepare staff members on these a significant modify?

Dutta: You have to walk them via the method alterations and the approval flow that goes with it, and clearly show all the things that have been accomplished to speed up the performance but also preserve the info quality that they’re used to. Which is where they commonly operate into roadblocks, and legacy clients say they want to pump the breaks. That takes place each geographically and with silos in divisions. Division A claims that they have to do it this way, but Division B claims we’re various, so we have to do it this way. This produces two various versions of the reality. Which is where you operate into info quality troubles and you get into a siloed environment where you invest in the cloud, but you create two various techniques. Then they say, ‘I’m not obtaining any efficiencies. I believed cloud was supposed to be a great deal simpler and more efficient. How come I have two directors?’ It really is because you’ve got definitely implemented two items.

A unified process architecture starts and ends with an HR document, that worker base, and all the things you do is an offshoot of that.
Pritam DuttaPrincipal, ArcLight Consulting

How does acquiring ERP built-in with HCM assist?

Dutta: In the early 2000s, we noticed a bunch of HCM-specific cloud market items like Kenexa BrassRing [now IBM] and the to start with edition of SuccessFactors [now SAP]. All those have been all cloud methodologies, and end users experienced to do the job the resource accurately the way the resource labored. A entire technology of HR structures and processes have been crafted and experienced about method standardization, and persons obtained used to the standardized way they did processes like modifying their account configurations, resetting passwords or only currently being authorized to do specified transactions. When they go into the ERP world, they’re used to using these ERP cloud items because they’ve accomplished it on the HCM side, and they’re used to protecting their info on the HCM side.

What are some of the approaches where ERP and HCM integration can strengthen processes?

Dutta: A unified process architecture starts and ends with an HR document, that worker base, and all the things you do is an offshoot of that. … The greatest integration position, specially fiscally, is concerning payroll and GL [common ledger]. Your payroll module appreciates all the things expense-related to an worker — positive aspects, overtime, bonuses, base wage, taxes — and your GL appreciates all the things expense-related about the worker. When these two are connected, it works by using the exact same info, which is why that integration yields significant positive aspects, specially with the most significant-scaled clients.

Consider a healthcare facility chain that has fifty,000 staff. When they operate payroll on a weekly basis, they are undertaking tens of millions of transactions. Having HCM as component of the equation will save [time] on the ERP side — the subledger accounting, the controller workforce, the fiscal reconciliation workforce, the expense accounting workforce. All of these ERP-targeted teams can get big positive aspects from an HR payroll team because they’re holding the info up to date and unified for them.

When need to this kind of HCM-ERP integration be brought into the digital transformation discussion?

Dutta: When you have a siloed group and HR decides to invest in a system but does not carry in any alternate stakeholders, you’re now putting you at threat. …. It really is crucial to carry in all the stakeholders and clearly show them the conclusion-to-conclusion small business method affect to their particular spot so that they can see this and recognize how HR’s conclusion impacts ERP, source chain, CRM and profits techniques. The before you do this, the improved quality [request for proposal] you get, because they’re heading to talk to the right concerns throughout the collection method.

Editor’s observe: This job interview was edited for clarity and brevity.

Jim O’Donnell is a TechTarget information author who addresses ERP and other company purposes for SearchSAP and SearchERP.

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