Comprehensive HR Information systems have a profound effect on business. Companies typically replace several related systems, such as a personnel database, recruitment and learning system, with one HRIT that integrates all these functions. Most companies that initiate an HRIT transformation do think about involving several stakeholders, by appointing Finance and IT executives as part of a Steering Committee for instance, or engaging an IT consultant to build an integration.
At the same time, however, many companies do not realise that an HRIT transition is not solely an HR responsibility until it is too late, and they are already in the middle of implementation. A holistic approach that includes Finance, IT and Business is prerequisite to a successful implementation. Pulling related departments together is the best way to make sure that certain standards exist throughout the entire organisation.
In this blog, we will provide a couple of examples that demonstrate the intricate dependency between HR, Finance and IT.
Some companies take the HRIT roll-out as an opportunity to implement a new organisational structure. Take a company, for example, that has parts of its HR business processes scattered across various departments. With the new HRIT and corresponding way of working, the previous organisations are transformed to report to a single authority, while a shared service centre is established to perform uniform business processes. The new organisation structure can be perfectly implemented in the new HRIT system. However, a new organisation structure also needs to be aligned with Finance and Legal. A good example is the ‘legal entity’ or ‘company’. First, the Legal Department should act as a source for the list and naming of legal entities. Then, Finance comes in to determine the financial code of each legal entity or company, as this is the primary link to Payroll and Financial ERP systems. From an HR perspective, the legal entity or company should represent the financial entity that is responsible for the salary of an employee.
Cost centre structure
Another example of indispensable functional alignment between HR and Finance is the cost centre structure. Cost centre structures play a large role within your HRIT transition. From a budget perspective, cost centres will be key data in reporting, for example: FTE reporting, forecasting and salary costs. In addition, cost centre owners will have a clear responsibility within the new HRIT system to approve workflows that impact costs like FTE or expenses made by employees. To get the most out of your HRIT transition, the global cost centre structure needs to be standardised. This way, HR and Finance will use the same definitions, and global reporting will be easier and better. Furthermore, cost centres are often being interfaced from the HRIT system to other systems. This could be done for BI reporting purposes or to support CRM/ERP systems to run operations. It is important to set up a governance and support structure after go-live, so that everyone knows where a new cost centre will be created and all systems are in sync.
Another aspect to consider in close collaboration with the IT colleagues is whether it is possible to standardise the distribution of IT assets (e.g. laptop, smartphone). If this process is well aligned, IT could get a signal in advance that a laptop or smartphone needs to be prepared, so it is ready the day a new hire starts. In addition, most IT departments have an Active Directory system. HR needs to work with IT to have the email addresses aligned, preferably before the start of an HRIT implementation, so all end-users will be able to login with single sign-on after go-live.
In conclusion: the entire HRIT implementation is not just an HR party. Finance, Legal and IT need to be onboard as well to make sure the business processes and data will actually function in the end-to-end processes within the company. This raises questions like: who takes ownership, how is your governance set up during and after the implementation, and do you have the right knowledge and skills to pull this off?
SuccessDay understands all aspects of HRIT implementation and is therefore able to bring the relevant parties together to make your HR transition a success. Do you want to know more? Simply reach out to us!
Eveline van Bergen
Senior Consultant at SuccessDay, currently supporting an international client (±20.000 employees) as Data Lead for the global rollout of SAP SuccessFactors.
Juul van Dongen
Director Operations at SuccessDay, responsible for Quality Assurance and currently advising (global) clients on their HR(IT) strategy and transition approach.