Why Integrating HCM with ERP is Good for Business by TechFunnel
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Why Integrating HCM with ERP is Good for Business

Why Integrating ERP with HCM is Good for Business

Human capital management helps to influence the success of your employees, and therefore the success of your business. There are plenty of systems that businesses use to help support their human resource operations, from payroll and benefits systems to timekeeping software to staff schedules to recruiting programs. Many of these systems are run separate from not just each other, but also from other business programs. This makes it much harder to gather and analyze business data in a meaningful way. It can also lead to inefficiencies and greater expenses.

Businesses looking to remain competitive and agile have noticed that inefficiency of having disparate systems leads to gaps in knowledge and lags in business decisions. For this reason, business leadership teams and information system teams across industries have started the move towards creating integrating HCM systems with existing ERP systems.

Enterprise resource planning (ERP) systems help businesses manage their day to day operations. All of the systems that businesses need to service customer and manufacture products – finance, manufacturing, supply chain, marketing, services, procurement – can all be managed from one program with the right ERP tool.

Software solutions such as Oracle and Salesforce are some of the most common tools that organization use to plan, track, and manage their business processes. Since human capital is an essential ingredient to successfully operating a business day to day, it makes sense to add HCM capabilities to ERP programs.

Here are some of the benefits of integrating HCM with ERP.

1. Better workflow

Integrated HCM helps a business understand how all the departments and business units relate to and work with one another. If a purchase for the business is initiated by an employee, for instance, HR, facility managers, and the direct supervisor can all have access to the request, making approval faster and easier. It can also help HR departments more easily look at the volume of business (such as sales numbers, inbound calls, and customer service contacts) and make decisions about future staffing needs and current scheduling.

2. Better security

Because of the nature of ERP solutions that often contains many crucial and sensitive business reports and documents, most ERP architects build in highly sophisticated security measures and protocols. These programs are also often hosted in the cloud, providing an additional layer of security by hosting data in an off-site location. Sometimes niche HR programs aren’t built with as advanced security features and can be more easily tampered with – a real danger when it comes to sensitive and confidential employee information. An integrated HCM tool allows you to benefit from the security features of a robust ERP.

3. Better data, reporting, and analytics

When departments work in silos on separate systems, it becomes much more difficult to see a holistic, overall view of the business. Data sharing becomes more difficult because systems don’t always align or measure things in the same way. Integrating HCM programs allow you to have all your data in one place and pull reporting that helps you better understand how the parts of your business work together.

4. Monetary savings

Streamlined solutions almost always save businesses money. It helps individuals save time, which leads to greater productivity. It also provides a more consistent user experience, which can lead to fewer trainings conducted by HR which is another cost and time savings that can lead to additional efficiency. It helps IT teams troubleshoot problems easier, as most processes are handled on the same program.

Integrating HCM and ERP systems makes a lot of sense for many businesses. If you’re looking for a way to streamline your solutions and gain more productivity and efficiency, read more about how to integrate ERP systems.

Marianne Chrisos
Marianne Chrisos
Born in Salem, Massachusetts, growing up outside of Chicago, Illinois, and currently living near Dallas, Texas, Marianne is a content writer as a company near Dallas and contributing writer around the internet. She earned her master's degree in Writing and Publishing from DePaul University in Chicago and has worked in publishing, advertising, digital marketing, and content strategy.
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