A recent Oracle blog talked through the reasons to tackle your ERP/EPM and HCM systems together to create an integrated Cloud solution. It starts with a scenario:
Imagine that you’re getting a promotion to a management position, which would impact your purchasing authority, approval workflows, travel allowances, and pay structure. On top of that, you’re moving to North America to Europe, where your company operates under a different legal entity.
How long will it take before your new role is reflected in your company’s Human Resources system, you start getting paid at your new rate, and your new team can start submitting expenses to your for approval?
At some companies, this process could take weeks to complete due to siloed finance and HR systems. Finance and HR functions have traditionally run their own systems, often on-premises, data, and processes. Not only does this lead to process roadblocks, but it also creates challenges for senior leadership—who struggle with incomplete or competing views when trying to track budgets, salaries, bonuses, commissions, and benefits.
Where do you start when you begin breaking down those siloed versions of the truth?
Obtaining a Unified Back-Office with Integrated Cloud Solutions
Technical users might jump to thoughts of integrating disparate systems and considerations of data mastering, integration, architecture, etc. While that may have been the primary approach in the past, back-office unification is now more possible than ever in the Cloud through integrated Cloud solutions. The key is having a shared data model and repository across three function domains:
- Enterprise resource planning (ERP)
- Enterprise performance management (EPM)
- Human capital management (HCM)
In a multi-national company, like the one in the start of this post, different legal entities or business units may be set up in an ERP solution. That structure affects how employees are tied to different legal entities/business units and how budgets are established. With an integrated Cloud solution, the single data model and repository help ensure that the information for the entities or business units, employees, and budgets is consistent across finance and HR.
If an employee’s role changes with a promotion to a different business unit, all of those changes are immediately reflected across ERP, EPM, and HCM systems. The result is an accurate business unit P&L, proper authority for the employee to procure to his or her new limits, and a clean payroll run. This is all based on a single change versus multiple changes in three different systems.
Technical and Business Drivers for a Unified Back-Office
During a Cloud impact assessment, challenges from executives, IT, or business leaders within an organization will be uncovered and addressed. For those that present an obstacle of questioning why ERP, EPM, and HCM applications should be integrated on Oracle Cloud, the business benefits of a shared data model and repository to create a single source of reliable information and the end-to-end visibility across the back office will be explored.
There are also several technical benefits of a single sign-on (SSO), consistent security management, and common Platform as a Service (PaaS) tools to manage applications.
If an organization asks why they should choose Oracle over other platforms, they will have to consider the benefits of the complete, connected integrated Cloud solution that has been built with a common data structure and integrated processes across three functional areas.
Getting to the Optimal Integrated Cloud Solution
When enterprise organizations begin converging their back-office ERP, EPM, and HCM functions in the Cloud, companies typically fall into one of two buckets:
- The business-driven strategy: Companies in this bucket consist of those that want to reinvent, revamp, or transform their organizational structure with Cloud technologies to modernize legacy systems, automate processes, enable real-time data and analytics, and facilitate innovation.
- The technology-driven shift to Cloud: Companies in this bucket consist of those that struggle with disparate, heavily customized, outdated systems that are expensive to maintain and pose a risk to the business.
With any Cloud transformation project, a Cloud impact assessment can help develop a roadmap to the Cloud and a business case to drive organizational buy-in. Some companies take a phased approach to a Cloud implementation and others take a big bang approach. The approach is different for every company. In some phased approach, some started with one solution, like Oracle HCM Cloud, and then move on and progress Oracle ERP Cloud and Oracle EPM Cloud. For others, a big bang approach of a multi-pillar implementation works better. With this approach, ERP, EPM, and HCM are all tackled in one go. The decision depends on your organization’s resources, culture, and buy-in.
For more information about the decision to integrate Cloud solutions and whether to tackle Oracle HCM Cloud, Oracle EPM Cloud, and Oracle ERP Cloud implementations all at once or in a phased approach, check out the Oracle blog attached below.
For more Oracle HCM Cloud resources, case studies, best practices, etc., check out Quest’s Oracle HCM Cloud Content Center. There are resources and training available for all aspects of HCM Cloud, including payroll, analytics, recruiting, and more!
For more Oracle ERP Cloud resources, case studies, best practices, etc., check out Quest’s Oracle ERP Cloud Content Center. There are resources and training available for all aspects of ERP Cloud, including risk management, financials, extensions, and more!