Traditional business functions have seen the departments of payroll, HR, and finance sequestered from each other in independent silos. Often working on different – even conflicting – systems and with different data, values, and goals, the risk of conflict, confusion, and error is high.
New technology allows for bigger pools of data to be stored in the cloud. The result is a new development sweeping forward-thinking businesses. Bringing the HR, payroll and finance functions into one integrated, cloud-based system allows HR professionals to streamline the way they plan, execute and analyze growth.
35 percent of respondents to a 2017 survey said that they planned to create a shared finance and HR function within a year. Their motivation? Being able to meet business needs more quickly and efficiently. 42 percent cited improvements in productivity and performance as their main goal.
Beyond efficiency, the benefits for a united payroll, human resources, and finance system include improved visibility, decision-making with confidence, business agility, and company value.
By bringing the payroll, finance and HR departments into one operating system, businesses eradicate the duplication of data entry tasks. With the old system divided by silos, three different employees would have to add new employees to three different data systems. With one system, functions share the same employee data, reducing the amount of employee time spent on data entry.
By reducing the number of people performing data entry and the volume of data to enter, the data collected will be of better quality. It will also minimize the opportunity for manual entry errors.
One of the main outcomes of adopting an integrated system is that productivity will improve. A study assessed the impact on staff who had undergone the integration of the HR, payroll and finance departments. Around one-third of respondents said that they spent less time completing manual work. They added that automation has afforded them more time to focus on strategy and planning.
As well as having more time to spend on strategy and planning, decision-making will be more streamlined with instant access to more data.
Within a disparate business structure, the procedure of making a decision would begin with the process of gathering relevant data from different systems. Combining these often conflicting reports would take time. Just to get a view on the business as a whole. Jumping between disparate data sets that do not relate or make sense as a whole led to potentially risky decision making.
Whereas, with a unified cloud system, HR leaders and decision-makers will have access to cohesive and accurate real-time data. Using this tool, they can make quick, accurate assessments and take decisive action as and when required.
An integrated system frees HR teams from the role of repetitive data entry and data reconciliation. Instead, they can collate reports that share information from the three business functions. Teams will be able to spend their time analyzing accurate, real-time information.
The time wasted collating disparate data from three unaligned systems would often result in stale data. Out of date and useless before it had even undergone analysis.
In the case, an HR department wanted to analyze the performance of the top talent on their sales team in relation to their salary and benefits. Teams would need to gather information from the finance, HR and payroll functions. By the time teams had assimilated the data, more sales would have happened and the data might no longer reflect the true hierarchy of achievement. Basing talent management or workforce planning decisions on outdated information is risky for the company and could damage employee relations.
Equally, different departments analyzing data from different sources inevitably invites conflicting conclusions. This could cause discrepancies in opinion and difficulty reaching conclusions.
Perhaps when assessed by the HR department, a new hire represents excellent value for the business due to a low starting salary and impeccable performance reviews. Meanwhile, the finance department – who have that employee’s sales figures compared to their peers – tell a different story. Effective performance management requires visibility on data from all functions in the business.
With an integrated system, teams can have confidence in their decision making. They know they are basing their strategy on high-quality, objective and accurate data.
Without the burden of completing endless data entry, HR teams within a small business have time to refocus their energies on company strategy. Plus, with visibility of real-time data, they can behave in a way that is agile, proactive and preventative. They can respond to market changes, pivoting their strategy and workforce management to meet business needs.
In a growing multinational corporation, figures from the finance department reveal growth in a certain geographical market. The HR team can respond by reviewing the skill sets of their existing workforce. Perhaps they need to move talent to capitalize on this market growth or look to hire new employees to fill a gap in the current team.
When making changes to business processes or human resource management, every update processes in real-time across the whole system. During a busy period, a group of new hires are brought on board to manage. Finance and payroll can immediately roll up the impact on the business and profit as a whole. Likewise, hiring teams will have access to exactly how much they can spend on personnel to maximize profit.
With HR systems augmented by those from payroll and finance, the whole hiring and onboarding process will be more efficient. HR teams will make human capital management decisions with reference to payroll data as well as company finance documents.
What this means long term is that growth is scalable and sustainable. New business structures, changes to payroll, moves into global markets and even acquisitions are quick and accurately updated within the software.
Studies have shown that this has an impact on the employee experience. When surveyed, almost half (46%) of staff who had undergone the merger of the finance, HR and payroll systems said they had seen their ability to reshape or resize the organization improve significantly.
Most important when it comes to business is that the combined system adds value.
Employees avoiding costly business hours completing repetitive data entry is good for employee engagement. But it also equates to massive cost savings. Those HR employees become more valuable to the business when they have time for the human parts of their role: strategy, HCM and employee relations.
When data sharing expands beyond the HR function, the business gains new insights and strategy. This is in part as a result of better visibility but also from having more eyes on the data. 41% of C-suite executives report that the cloud allows them to focus their efforts on revenue generation and cost savings. This integrated use of resources allows HR teams to track and predict employee costs compared to business needs.
With more staff members able to use more time to analyze more data, this is only going to be a win for the business.
Top tips for success
Essential to the success of a switchover from three silos to one integrated system.
Cross-function cooperation is essential to ensure the right data makes it to the new system. Representatives from each silo have the responsibility to oversee the transition.
Enlisting the help of senior employees as integration specialists will help other employees adapt to the change. The focus should be on helping teams to understand the reasons behind the change and the benefits for them. Teams must understand their place within the overall picture and the company strategy.
Dedicated service provider
Choose a dedicated service provider who has the software and the skills to integrate your departments’ functions. They must have the ability to build a system that works for every team member every day but also allows for international growth.
To learn more about Payslip’s HCM integration capabilities, contact us today!