Consolidation Considerations

By: | May 1, 2018 • 6 min read
Steve Boese is HRE's Inside HR Tech columnist and chair of HRE’s HR Technology Conference®. He also writes a blog and hosts the HR Happy Hour Show, a radio program and podcast. He can be emailed at sboese@lrp.com.

Here are some issues to examine when weighing a move to a single platform for HR, finance and ERP solutions.

Long before I became an HR-tech person, I worked in the corporate accounting and finance department for a major U.S.-based tech company.

The job entailed lots of financial and managerial report creation, distribution and even some presentations to leadership on the financial state of our part of the business. The position also required some decent technical skills, as the finance systems we had back then were not exactly user-friendly—think green screen data entry, lots of overnight batch processing and reporting systems that were only “current” about two days each month (and those were usually the 14-hour days we put in to generate all the reports we needed for management).

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But it was a great job and a fantastic learning experience, and it also led me to spend quite a few years implementing new financial systems for that company and eventually others. In fact, helping finance organizations define new charts of accounts, reporting hierarchies and improving processes for things like bill payments and cash receipts was how I spent the better part of the mid-’90s to about 2003 or so, before transitioning to focus exclusively on HR and HR systems. One tip I learned about installing new finance systems still resonates to this day: When implementing a new AP system, if there is a backlog of unpaid invoices piling up, make sure to find the one for the electric company and pay that first when the new AP system is up.

I share this little tale not just for my amusement, but because my experience with finance, accounting and ERP systems (and now HR systems) gives me some interesting perspective on the issue I want to dig into this month: whether it makes sense for organizations to try and standardize their HR, finance and ERP systems on one common, single-provider platform or have separate (often described as “Best-of-Breed”) systems for HR, finance, supply-chain and purchasing processes.

This debate is not really new, of course. Back in the days of “Big ERP”—prior to about 2000—large organizations often did consolidate on one provider’s solutions for all or as much of their administrative functions as possible.

But once the initial set of HR, talent-management and recruiting technologies emerged as cloud-based Software-as-a-Service solutions, the systems’ footprints in many organizations began to bifurcate, with some solutions migrating to new cloud-based providers while others (often “core” HR and finance) remained as on-premise systems. The combination of the systems themselves not being cloud-ready and many organizations’ early reticence about moving fundamental systems-of-record to the cloud continued to drive this split for several years.

Fast forward to today, where we see many (if not all) administrative systems having cloud-ready options. Several of the larger enterprise-solution providers are developing and offering full suites of cloud solutions for HR, finance, ERP and more, and the enterprise IT debate from the ’90s about the benefits and risks of consolidating on a single platform has emerged once again.

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