More and more, companies are beginning to realize the importance of integrating all of their disparate HR systems -- including their talent management applications -- so that executives can have a more real-time, comprehensive view of the business and its employees. According to Katherine Jones, human capital management (HCM) technology lead analyst at Oakland-Calif.-based consultancy Bersin by Deloitte, the ideal today is to have one employee system of record -- in other words, one point of truth about each employee.
Historically, an employee would only have a statement of record within the core human resources information system (HRIS), containing information such as his start date and assigned manager. "It didn't tell a lot, but it gave a record of the person," Jones said.
But the idea of a talent profile, containing new hire information as well as performance data and other related information is fairly new, she said.
So why not combine the two? From an HR as well as a business point of view, it's a good thing to have a single place to look for talent information, Jones said. But this data integration isn't always easy to achieve.
Real-time integration means more value
The value of integrating core HR systems with talent management systems is fairly obvious according to Stephen Millard, vice president and research director of HCM at Ventana Research in San Ramon, Calif. "The core HR systems are the starting point, and talent management systems build on that, so they have to work together at some level," he said.
Jones used an example to illustrate the benefits of integration. If the head of a company wants to open an office in Romania and he needs somebody to run it, he can find an employee with the specific skills necessary and learn what his or her salary history is -- information that usually isn't stored in the same place, she said.
Core HR and talent management systems do have to interface at some level, and Millard explained that any talent management system is probably pulling something from an employee statement of record. So the question is at what level should these systems interface, and to what degree?
"The degree at which companies have been doing it determines the value," Millard said. "If you have a performance management system where once a week it does a batch file transfer between [it] and the payroll system, and it just sort of synchronizes the first name, last name, social security number and the employee's address. …you end up with a basic communication back and forth, which provides a fundamentally transactional level of information."
But the value proposition of true real-time or near real-time integration is more significant. As a company evolves and enters into the new world of Web services, interesting things start to happen with talent management and social talent management, where the value proposition has started to shift, he said.
"You start to do much more real-time communication and the value is that now you have a real profile inside of your environment -- that is your talent management system," Millard said.
And that environment can help a company quickly find internal "experts" in its talent management system, as Jones pointed out. In addition, a company that has a real-time, or close to real-time, interface to its entire payroll and employee system of record has a much larger repository of information from which it can draw, Millard said.
Complexity hampers core HR and talent management integration
However, it's not easy to get to that point.
"The challenge is the complexity because [very large enterprises] don't have one HR system, they have five or six or eight," Millard said. "And setting up that interface or interfaces, and getting all the payroll systems to integrate and [gathering] all the data is a long and arduous process. So it has to come in pieces.
"But the necessity and the willingness to do it is starting to [increase] as companies realize that they can have a system that can help them find experts all over the world," he added.
Jones said the reason these systems are not typically integrated is because the HRIS system of record is also used in departments other than HR, such as in the finance department for payroll, but the talent profile is not used outside of HR.
"When we look at some of the big ERP systems [that are] the major sources for statements of records, like SAP, PeopleSoft, Oracle E-Business [Suite] … they're not necessarily talent-based," Jones said. "They're looking at integrating those two systems where it makes sense, but not to the point of having one system."
Jones also pointed out that some separation is necessary because certain information contained in an employee's HRIS record, such as wage garnishment information, should not be accessible to all.
HR systems integration aids analytics
Internet radio service provider Pandora, headquartered in Oakland, Calif., is one company that sees the value in integrating core HR systems with talent management applications.
Vice President of IT Richard Rothschild explained that Pandora runs an exclusively cloud-based technology ecosystem, which includes an HRIS system from vendor Vana Workforce. "It's important to integrate the two systems because we have all these Software as a Service applications that are fractured. They're like different countries in Europe rather than states in the US," he said.
And when a company is hiring hundreds of people like Pandora is, it becomes a fair amount of work to get the information into all the necessary systems, he said. Not only that, but the different systems have to talk to each other to ensure the data is consistent. "Otherwise, you have to redo things a bunch of times and it becomes really labor-intensive and not very effective," Rothschild said.
In addition, Rothschild said Pandora wants to learn more about its employees, and to do that it needs to use big data analytics.
"So what we're doing for each of these systems is getting regular dumps of data into a data warehouse and developing reports [around that]," he said. "For example, if you want to see which managers have the best or worst retention rates, you could look that up. And then you could see how that correlates with their hiring -- how many [requisitions] did they open, how long [were they] open. Maybe they’re not doing a great job hiring, and that's why they don’t have good retention."
However, Rothschild pointed out that companies can only get these kinds of insights if they combine data from different systems.
About the author:
Linda Rosencrance has written about technology for more than 10 years and has been a reporter for more than 20. A former Computerworld reporter, she is a freelance writer in Massachusetts and also an author of several true-crime books.
This was first published in October 2013