I’ve been thinking a lot lately about both business and applications integration. You may have read my modest rant on the bastardization of the term integration as used to describe how applications are connected. You also may have seen my videocast comments on the reasons why I think that your HRMS and core talent management applications (so performance, staffing, compensation, development, succession etc.) deserve a very high degree of what I mean by integration.
On that same videocast, there was also a good bit of discussion about the inherent connections between core financial applications and your HRMS, but I think there’s a lot more to say on this point, especially given a recent inquiry on same from my colleague Emma Snider. It was Emma’s questions to me in the wake of that videocast that are the immediate impetus for this post, although it’s been on my list for some time.
With respect to our having discussed the connections between financial and HCM applications on the referenced videocast, she asked: “In your opinion is this because HR and finance truly are going to start working together much more, so HR should be concerned with what finance is using in terms of technology, and vice versa? Are the two functions really destined to team up?”
To these good questions, here’s how I responded [with my responses to Emma edited by me here for greater clarity]:
“First, finance and HR are inherently connected in a purely business sense in that (1) the bulk of most organizational costs (which can be 70% to 80% in businesses which are predominantly service-based) are related to their workforce, (2) understanding what it is about HRM that moves the dial on revenues and profitability goes to the heart of measuring and enhancing organizational performance, and (3) there’s no way to manage business outcomes without integrating financial and HR data quickly and cleanly, analyzing that data quickly and cleanly (to include predictive analytics), and then delivering that analysis directly to decision makers at their point of decision-making, i.e. as embedded analytics, at their speed of thought. From a systems perspective, finance and HR share many enterprise level objects — including work unit, work location, person, account, contract, and many more — and place many of the same demands on system architectures, from the needs for widespread user access and effective-dating done systemically with full retroactive processing to the need for managing geographically-based regulatory requirements via powerful inheritance capabilities across and within SaaS tenants. So, on both a business and systems basis, there’s a natural affinity between these two domains which argues persuasively, especially at a time of embedded analytics, for them to be integrated (as I define that term) in a systems sense and working well together in a business sense.
There’s a lot more to be said on this subject, but I hope this gives you a sense of where my head’s at when it comes to making the business case for considerable “Blooming” integration across financials and your HRMS — and I can’t wait for the comments to fly.