My colleagues and I recently attended a Workday Customer Base event where I led a presentation on HCM Transformation. Many attendees in the room noted their organizations first started their transformation journey by implementing Workday HCM and were now considering Workday ERP and SCM. They expressed it seemed beneficial to consolidate their HCM, ERP and SCM into one system.
Benefits of One System
It’s true, having your HCM, ERP and SCM on the same platform comes with great benefits:
- Your technical teams for integration, infrastructure and security could be shared across the enterprise, lowering your human capital costs.
- User interface both for web and mobile would remain consistent, which improves adoption and user experience.
- Common data models can be shared across the system and would need less external integration, data mapping, and maintenance, further lowering human capital and infrastructure costs.
- Future road mapping and deployment plans could be easier to chart and deploy, leading to shorter, more effective projects.
Barriers to One HCM, ERP and SCM System
These benefits notwithstanding, let’s acknowledge that it may not always be practical or possible to migrate to an all-in-one product.
If you contract with different vendors today for each of these solutions, it’s possible that a department or business unit required specific functionality that a consolidated solution couldn’t provide. Revisiting those buying decisions will require a gap analysis to determine if one vendor can now fill the bill.
It’s also true that each disparate solution has different and highly invested stakeholders. Moving to a single solution requires more coordination between different departments and likely, a new governance model to ensure that the needs of HR, as an example, are given equal weight to those in finance.
Lastly, it’s true that change is difficult for end users. A singular enterprise solution will almost certainly differ in some ways from the legacy applications it replaces, and this can lead to disgruntled end-users and training challenges. Users and key stakeholders may also rue their loss of autonomy. Their ability to control and make updates to their preferred solution would no longer be an option: changes made in your one application would now impact the others.
3 Tips to Prep for Your HCM Transformation
While I suggest caution and planning before proceeding, it’s been my experience that running disparate HCM, ERP, and SCM systems comes with huge cost and inefficiencies. I believe the benefits of consolidation with a trusted vendor/solution are significant and merit consideration by most forward-thinking organizations. When I led the rollout of Workday as the System VP for HR Operations for a large Healthcare network, I learned some important lessons that will help improve your organization’s planning process:
- C-suite alignment is critical: Get the buy-in from your C-suite as early as possible so you can leverage the strength of your proponents and prepare to manage any blockers.
- Be nimble and agile: During your implementation, business model and financial needs may adjust rapidly so it’s important to stay aligned and adaptive to changing business needs.
- Creating capacity: Skill gap, inefficient processes, and an understaffed, exhausted team may not be ready for new work. Stop unnecessary tasks and complete resource planning early. Often, external resources will be required to complete the implementation on time and under budget.
The Impacts of AI on Enterprise-wide Transformation
Choosing to stay in disparate systems may feel more in control, but it comes with inefficiencies, lack of functionalities and limited use of enterprise-wide data models. In addition, the recent advent of Generative AI is fast changing the needs of system governance. New regulations around data privacy and algorithmic discrimination protection will be tougher to manage in disparate systems.
Looking into the future, moving beyond the technical benefits, being in one system comes with an abundance of opportunities. Powered by AI, Financial and Supply Chain data from ERP and SCM systems can predict growth areas, prompting the HR team to initiate workforce and compensation planning while IT can plan for provisioning and infrastructure.
Moving to a common platform, shared data and algorithms should be seen as a great opportunity. But it will also require HR leaders to become more fluent in ERP and SCM systems to make wholistic decisions. If a proper service and governance model is designed, deployed and well-orchestrated, the opportunities are endless.
Sudipto Banerjee is an Elite Advisor at Healthcare IT Leaders and an HR and enterprise-wide transformation expert. He was most recently the System VP for HR Operations for a large Healthcare organization. He helps healthcare organizations achieve systemwide synergy of people and purpose to build consensus and ensure higher return for the invested time, resources, and funds.