ERP cloud migrations existing options to streamline procedures and enhance efficiencies. But, even with the promised advancements, positive aspects of the migration are generally not recognized, and failures are popular.
A person motive for failure is the lack of ERP integration with human capital management devices, according to Pritam Dutta, principal at ArcLight Consulting, an Oracle HCM and ERP implementation provider in Burlington, Mass.
ERP and HCM devices provide different applications in the company. ERP underpins business-essential procedures these types of as finance, accounting, procurement and supply chain and HCM devices automate and simplify HR procedures these types of as payroll and career development. Joining these devices less than a popular information architecture in the cloud permits organizations to enhance procedures, Dutta claimed.
In this Q&A, Dutta points out why ERP cloud migrations might run into hassle, and why integrating cloud ERP and HCM devices could be the vital to a migration’s achievement.
What are the most significant failure points of an ERP cloud migration?
Pritam Dutta: The No. 1 place where by legacy prospects fail is that they check out and convey as well a lot of their outdated legacy customizations into the cloud. They do not undertake a person clear cloud basic principle, which is standardization. When you decide on a cloud product, you are inherently accepting that your business can run on an 80-twenty or even 90-10 rule [for customizations]. When we talk to consumers, we check with how they’re so different from their other sector competition in the cloud that they will need to move a hundred, two hundred or 1,000 customizations more than.
A cloud migration should end result in simpler procedures, which should guide to far better adoption from users, but that is not often the circumstance, why?
Dutta: Standardizations should push less difficult adoption, and it typically does on the staff aspect. We typically see adoption troubles on the administrator aspect simply because they’re utilised to customizations overcoming information or procedure deficiencies. Several legacy deployments have these customizations that act, fundamentally, like a nanny, and they have hundreds of all those. So, they’re utilised to the ‘nanny’ telling them [what to do or not do]. But when they get to a standardized procedure, there is certainly nothing at all there.
So, there is certainly nothing at all telling them what to do up coming. How do you teach staff on these types of a huge change?
Dutta: You have to wander them as a result of the procedure modifications and the approval movement that goes with it, and display all the items that were being completed to speed up the effectiveness but also sustain the information good quality that they’re utilised to. That’s where by they typically run into roadblocks, and legacy prospects say they want to pump the breaks. That comes about both geographically and with silos within divisions. Division A says that they have to do it this way, but Division B says we’re different, so we have to do it this way. This generates two different variations of the truth. That’s where by you run into information good quality troubles and you get into a siloed natural environment where by you invest in the cloud, but you construct two different devices. Then they say, ‘I’m not acquiring any efficiencies. I imagined cloud was intended to be a lot less difficult and far more economical. How arrive I have two directors?’ It truly is simply because you have genuinely executed two products.
Pritam DuttaPrincipal, ArcLight Consulting
How does having ERP integrated with HCM assistance?
Dutta: In the early 2000s, we noticed a bunch of HCM-precise cloud specialized niche products like Kenexa BrassRing [now IBM] and the initial model of SuccessFactors [now SAP]. These were being all cloud methodologies, and users experienced to get the job done the software specifically the way the software worked. A complete generation of HR structures and procedures were being crafted and trained close to procedure standardization, and people bought utilised to the standardized way they did procedures like modifying their account configurations, resetting passwords or only staying authorized to do specific transactions. When they go into the ERP earth, they’re utilised to using all those ERP cloud products simply because they’ve completed it on the HCM aspect, and they’re utilised to maintaining their information on the HCM aspect.
What are some of the approaches where by ERP and HCM integration can enhance procedures?
Dutta: A unified process architecture commences and ends with an HR report, that staff base, and almost everything you do is an offshoot of that. … The most significant integration location, especially economically, is amongst payroll and GL [standard ledger]. Your payroll module understands almost everything cost-connected to an staff — positive aspects, additional time, bonuses, base wage, taxes — and your GL understands almost everything expense-connected about the staff. When all those two are connected, it works by using the identical information, which is why that integration yields huge positive aspects, especially with the most significant-scaled prospects.
Just take a hospital chain that has 50,000 workers. When they run payroll on a weekly basis, they are undertaking thousands and thousands of transactions. Acquiring HCM as portion of the equation saves [time] on the ERP aspect — the subledger accounting, the controller crew, the money reconciliation crew, the cost accounting crew. All of these ERP-targeted teams can get big positive aspects from an HR payroll team simply because they’re maintaining the information up to date and unified for them.
When should this type of HCM-ERP integration be introduced into the digital transformation discussion?
Dutta: When you have a siloed business and HR decides to invest in a platform but would not convey in any alternate stakeholders, you are previously placing oneself at hazard. …. It truly is critical to convey in all the stakeholders and display them the conclude-to-conclude business procedure effects to their distinct place so that they can see this and understand how HR’s determination influences ERP, supply chain, CRM and revenue devices. The previously you do this, the far better good quality [ask for for proposal] you get, simply because they’re likely to check with the right issues through the choice procedure.
Editor’s take note: This job interview was edited for clarity and brevity.
Jim O’Donnell is a TechTarget information author who addresses ERP and other company programs for SearchSAP and SearchERP.