Written By: Robert Churchyard, Global Oracle Leader, IBM
Unifying Back-Office Functions
Imagine, for a moment, that you’re getting a promotion. You’re moving up from an individual contributor to a management position, which impacts your purchasing authority, approval workflows, travel allowances, and pay structure. On top of that, you’re moving from North America to Europe, where your company operates under a different legal entity.
First of all, congratulations on that new job! Secondly, let’s take a guess: How long it will take before your new role is reflected in your company’s HR system, you start getting paid at your new rate, and your new team can start submitting expenses to you for approval?
At most companies, this is a process that would take weeks to complete. The reason? Siloed finance and HR systems within your company.
Finance and human resources functions have traditionally run their own systems (often on-premises), data, and processes. Not only does this lead to process roadblocks (as described above), it creates challenges for senior leadership—who struggle with incomplete or competing views when trying to track budgets, salaries, bonuses, commissions, and benefits.
Where do you start to break down those siloed versions of the truth?
Facilitating the Back-Office Unification
For the technical folks, you have probably jumped straight to thoughts of integrating disparate systems and considerations of data mastering/integration/architecture/etc. While that may have been the primary approach in the past, back-office unification is now possible more than ever in the cloud. The key is a shared data model and repository across three functional domains: enterprise resource planning (ERP), enterprise performance management (EPM), and human capital management (HCM).
In a multi-national company, such as our example above, different legal entities or business units may be set up in an ERP solution. That structure affects how employees are tied to different legal entities/business units and how budgets are established. With a unified back-office cloud, the single data model and repository help ensure that the information for the entities or business units, employees, and budgets is consistent across finance and HR.
If an employee’s role changes with a promotion to a different business unit, all of those changes are immediately reflected across ERP, EPM, and HCM systems. The result is an accurate business unit P&L, proper authority for the employee to procure to his/her new limits, and a clean payroll-run—all based on a single change, versus multiple changes in three different systems.
Getting to the Optimal Converged End-State
When we recommend that an enterprise organization converge its back-office ERP, EPM, and HCM functions in the cloud, companies typically fall into one of two buckets:
- The business-driven strategy—companies that want to reinvent, revamp, or transform their organizational structure with cloud technologies to modernize legacy systems, automate processes, enable real-time data and analytics, and facilitate innovation.
- The technology-driven shift to cloud—organizations that struggle with disparate, heavily customized, outdated systems that are expensive to maintain and pose a risk to the business.
With any cloud transformation project, we recommend a cloud impact assessment that helps develop a roadmap to the cloud and a business case to drive organizational buy-in. With some companies, we recommend a phased approach, which sometimes includes a pilot project to “prove” the cloud solution to nay-sayers and “whet the appetite” for what’s possible. Many of our phased projects have started with Oracle HCM Cloud for workforce management, moved to Oracle EPM Cloud for budgeting, analysis and workforce planning, then progressed to Oracle ERP Cloud for core finance. This was the case at a major financial institution in the U.S. and a life sciences company in the U.K.
In other cases, we may recommend a much more aggressive multi-pillar implementation where we tackle ERP, EPM, and HCM in one go. This was the case with a major high-speed rail transportation customer in the U.K. that was looking to establish its HR and Finance systems with a shared data model. With all-at-once projects, we often include a comprehensive change management and training program to usher employees through the transition.
Technical and Business Drivers for a Unified Back-Office
During the cloud impact assessment, we’ll uncover and address challenges that may arise from executives, IT, or business leaders within an organization. If the obstacle is why integrate ERP, EPM, and HCM applications on Oracle Cloud, we explain the business benefits of a shared data model and repository to create a single source of reliable information and the end-to-end visibility across the back office. We also explain the technical benefits of a single sign-on (SSO), consistent security management, and common platform-as-a-service (PaaS) tools to manage the applications.
And finally, if an organization asks, “Why Oracle versus other platforms?” The answer is easy. Oracle has a complete, connected solution built from the ground up with a common data structure, with integrated processes across the three functional areas. In IBM’s experience, Oracle’s breadth and depth of functionality is unmatched by point solution competitors or those struggling to scale. Take a look at the latest Gartner MQs assessing Cloud Finance & HCM providers for the re-assurance you need.
Check out the IBM Cloud Impact Assessment for Oracle to see how IBM is helping businesses implement connected solutions in the cloud, paving the way for them to capitalize on groundbreaking technologies. Visit ibm.com/oracle to learn more.
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