Enterprise Resource Planning (ERP) systems are designed to provide a ‘single point of truth’ concerning a company’s resources. However, Human Resource Management Systems (HRMS) have often evolved as separate software solutions from the rest of the company’s ERP system.
How to accomplish effective HRMS & ERP integration
For many years, ERP systems such as Oracle and SAP have provided the backbone for core HR data storage, together with financial, CRM, manufacturing and supply chain data. While these large systems offer the convenience of having the data in one location, separate standalone HRMS systems offer a ‘best of breed’ approach and are often preferred by the HR business users due to their robust, HR-centric focus. How do you handle these differing system needs? HRMS-ERP Integration to the rescue!
Integration involves the sending of data back and forth between systems. These days, it’s a rare situation to have a single HRMS or ERP that does everything, especially if you’re in a global environment with local systems in place too. In addition, many companies send data to non-HR systems too, such as finance or expense systems, in addition to the usual integrations such as payroll or time-keeping applications. There may also be a need to send data into your primary ERP from external systems, which adds another level of complexity.
Integration of HRMS software and ERP is a key area to acknowledge in HRMS implementation, as well as from a support perspective. It requires both functional and technical resources, to define how systems should integrate and to work through all of the data decisions such as HRMS data mapping and integration frequency along with the technical steps required to enable the systems to talk automatically. Each time that you HRMS software connects to another system, there is a possibility for something to go wrong, which is why having appropriate support structure defined is so important in relation to this topic.
Speaking from the perspective of a large, global company environment, while having the best software applications for your business needs makes the HR users happy, in a practical sense, integration adds to your HRMS landscape complexity. A usual HR landscape is to have ERP or HRMS housing the core HR data and acting as the system of record, and then to interface data out to all the downstream systems such as payroll, recruitment, learning management, etc. In a global environment, most of these cannot be real-time interfaces but instead are daily feeds. However, living in a 24/7 environment means that someone is always in a system. When can we interface data when everyone’s workday ends at a different time? Who gets priority if all of these integrations cause performance issues? Most global companies end up with a very small window of system downtime or for patches due to the constant stream of running integrations. Such complexity requires documentation, coordination and strong system ownership to ensure that this vast web of data integrations can deliver on all of the system benefits on a daily basis.