HR Business Process and Integration
My attempt in the blog is to highlight how organizations always benefit when the data integration process undergoes a participative, agile approach. When everyone is involved in the process, they are invested in its success and can take pride in its developments. So regardless of which technology is being made use of, processes and data required for business processes will always be key for any successful HR implementations, and HR Integration.
What is a Business Process?
A business process is an activity or set of activities that will accomplish a specific organizational goal.
The whole business of an organization is carried out through processes. A process is a set of interconnected activities with interactions which are transforming the object (as its input) into a result (as its output) on the way that employees (people) are adding a certain procedural value/s using the resources of the organization. The goals of the organizational system to be achieved by implementing processes are –
- Profit increase
- Sales increase
- Reduction of Production costs /employee cost, and other costs
- Increase of quality of products / services
- Market share increase and etc.
Why Business Process?
Business processes are an important area of organization’s practices because it allows the company to increase competitiveness and sustainability in times that are accompanied with uncertainties in the market, increasing globalization and business conditions, which are continuously changing. Processes should be designed towards achieving company goals, and also can be quantifiable for the upper management view and decision making. Efficiently delegated sponsorship and delegation of goals by the company can make process re-engineering an exciting journey of transformation and success.
Transformation is a progression happening all the time with the focus on people, process, and technology. End to End process integrated with before and after processes is the key to have an efficient process which requires reengineering of business processes. On this data is key to any process to make up the process flow and its communication through multichannel / applications / other processes.
There is more desire to depend less on IT, for processes to work smart, and this means more clean integration between different processes across the organization is a welcome. Although system wise integration is not perfect in every area, but bringing together so many moving parts is a challenge for any vendor, with any data model, but as long as it is constantly improving and increasing both, the flexibility and depth of data flows, that is the key achievement from a product perspective as well.
Let’s talk HR processes and HR integration. All HR processes are integral to the survival and success of HR strategies and no single process can work in isolation; there has to be a high level of conformity and cohesiveness between the same. Employee and employee information is today become of key importance in tackling the modern challenges of organizations wanting to grow better and faster in a competitive world, where workforce dynamics are changing faster than before. HR data is not just a must within HR processes but also must be able to send and receive the same to non-HR processes. To improvise business processes, few elements need to be examined closely.
Process mapping is a crucial step because it provides the big-picture view of an organization that’s necessary when trying to understand where systems of record reside, as well as the overall data flow. The key here is to recognize the difference, between simply mapping out current processes vs. improvements. Implementations take time and effort and have an associated cost, so no one implements a new system just to recreate their existing system with all of its current limitations.
Example: Assume, for instance, the organization currently has a multistep pay-for-performance process. Typically, managers will submit salary recommendations to a review committee after which any over-budget amounts go back to managers for adjustment and resubmittal. However, an automated system can be configured to not allow lower-level managers to exceed the budget without department head approval, which can eliminate many of the review and resubmit steps of manual processes. The focus of process mapping needs to be on how the desired state differs from the current state, while paying close attention to steps it eliminates. It’s a mistake to define a new system based on the old system functionality, which may have had stop points and readjustments because of inefficiencies and inaccuracies of a manual process.
This example shows that there is integration between HR processes – Employee data maintenance Process and Performance Process, and involves data shared by these 2 processes. The non-HR process comes into integration where the budget in the example is part of funds management process, and further into a finance area process.
Without going through a solid data mapping exercise up front, rework, delays and missed deadlines can result downstream. And it’s important to have deep information on employees, not just cursory, inventory-type information. In fact, it’s not uncommon for organizations to know more about laptops and facilities than its people. Successfully creating a data map takes a joint effort among IT and various lines of business dedicated to reconciling any data differences.
Example: Job title is a simple example, since it’s not uncommon for an organization to use various titles for the same person (job title, position title, business card title, etc.). For example, if all of the employee demographic data is coming from an organization’s ERP system but the mapping exercise uncovers that the job title is currently only stored in the corporate email system today, it might be necessary to revisit Step 1 and include data integration to your corporate email server as part of the overall integration strategy, and improvise the process by maintaining these data elements in the system of record itself. So a thorough data mapping exercise will cross-check and validate the process map, and data inconsistencies.
This example shows process improvement, change in data ownership and integration required for data consumption.
Not to forget, for legal and compliance reasons, it’s always crucial to pay close attention to security and data visibility. This means addressing who can see what data, as well as determining how to map roles and contexts to data visibility and editing rights. Taking the time to design a security model to match data requirements from the ground up is also crucial to avoiding future redesigns.
When multiple HR processes are built, a successful HR Integration strategy for within HR and with non-HR can be formulated by answering questions, such as:
- Which HR processes will be built /does the organization intent to build? Why? This is the scope. (Cross check for company KPI’s) as well.
- Example: Recruitment, Onboarding, HRIS, Payroll, Benefits, Time, etc. These are processes, which have sub-processes as well. Example: Payroll has Gross Payroll and Net Payroll.
- What data elements will be required to make the business process work or flow?
- Example: Organization data, Employee data, etc. Here important point to analyse is, also the existing data and systems for clean-up and gaps.
- Who owns the data being utilized? Are there any gaps based on the process to be built? Process to collect and maintain that data?
- Example: Comp team, Benefits team, HR team, Company directory team, etc. Example: Compensation data (used for salary structures) is important to employee data but HR team does NOT own it. The Compensation Team owns it.
- Which other non – HR area processes will be consuming HR data?
- Example: Customer Relationship Management, Budgeting, Production Planning, Logistics, Sales, Finance, Marketing, third party vendors, if any, etc. Example: Work Schedules from HR can be used by Capacity Planning; Organization structure elements could be used by Sales/customer Relationship management
- Which data will HR processes consume from other areas? How will they receive this data? What are the impacts on HR of this data management? Timing and communication dependencies.
- Example: Cost centers come from Finance area; Stationary and supplies used in Learning could be coming from Material Management.
- Technology questions – Considering that many organizations have several systems creating and storing HR-related data, the amount of differing batch and real-time integration technologies can be overwhelming, from prebuilt connectors to flat files to Web services. For any data integration it’s crucial to make sure the existing technology platform supports the proposed system. This is an important step, so having IT and vendor participation ensures there aren’t disconnects between process and product.
- Example: For instance, your desired end state might be bidirectional, real-time data integration but your ERP’s current version might only support nightly batch extracts to a text file. You may need to take a pragmatic approach, initially integrating with the nightly import of batch files and evolving to a real-time Web services infrastructure over time as you upgrade your ERP in the future.
- How will validations happen? A proven solution is a combination of software, customer configurations, customer data, workflows and processes. As such, validation means going through the process of testing edge cases, conducting performance load testing and coordinating with other data-dependent processes (ERP updates, analytics ETLs, etc.). Replicating the real world as much as possible is key to successful validation and make sure your data comes in clean as well. Validation is instrumental in building confidence.
- After all, ensuring data integration is successful and trusted is critical to delivering business value.
I have in my career seen projects going downhill, just for one of the reasons, that Integration was not addressed on a timely basis, along with missing ownership of data, which impacts decision making for the process. Most of the time the reason for this is when IT and Business do not work as a team. Plus the consulting teams do not ask the questions to IT and business, which if done, can help them build more efficient processes.
Always first, understand the business process, end to end, identify the integration points along with the pain points, then start re-designing the process to be build which will be more efficient, providing true value to the customer. So ask questions no matter what your role may be in the project, is my tip from my experience.
For Cloud HR readers some lingo –
- In SAP HCM Organization, Pay and Job Structure Details – in Success factors terminology this is called Foundation Objects
- In SAP HCM Info types – Employee Details – This covers Personal and Employment Details for Employees, known as Personal and Employment Objects respectively
Link from SAP Portal to help understand some HR and non-HR cases which can be used as building blocks