value of hcm for finance
DESCRIPTION
Today’s CFO knows that human capital is an organization’s most valuable asset, but in practice most organizations rarely link their investments in people to their overall financial performance. A primary reason for this gap is that business processes and applications for supporting the workforce are disconnected from the company’s financials and often function only within a line of business; as a consequence, it is hard for the CFO and other top management to understand the impacts of investments in human capital on the top and bottom lines. Companies typically have separate applications for managing talent, human resources, compensation, expenses and spending, and they use individual spreadsheets and business intelligence tools to analyze them and monitor performance. CFOs are strategically positioned to enable and lead the necessary collaboration between human resources and finance groups as they develop a unified approach that will make visible the impacts of efforts to improve employee productivity on financial results. What’s required is an integrated approach that tracks not just the financial consequences of workforce planning, hiring, work activity, goals achieved and management results but provides a complete picture of performance across people and business processes. Finance can show HR how to move beyond outdated siloed ERP and HRM systems to implement enterprise systems that support how people are engaged and retained and also reflect and reinforce the financial objectives of the organization. The business case for investment in such unified systems must make financial sense, which means showing the bottom-line contributions of increased productivity and the most efficient ways to align people to the goals and objectives of the organization.TRANSCRIPT
The Business Value of Human Capital Management for FinanceVentana Research
Industry Fact:Projected compensation of US employees in 2013
$8,527.2 trillionIt’s often an organization’s
largest expense.Source: Bureau of Economic
Analysis
The reason is cite
lack of integration
between finance and HR impedes
progress.
Brittle integrations: 75% of finance organizations agree there are better alternatives to spreadsheets for their cross-functional business processes.
of organizations indicated it’s important to align the workforce to business goals and financial results.Source: Next Generation Workforce Management Benchmark Research
81%
But 46% said finance
organizations do not work closely
with HR to improve processes.
Source: Total Compensation Management Benchmark Research
Source: Total Compensation Management Benchmark Research
Source: Spreadsheets in Today’s Enterprise Benchmark Research
Hard to adjust:
of finance organizations that have integrated headcount and com-pensation plans are not
able to adjust to meet business needs.
Source: Integrated Business Planning Benchmark Research
61%
The secret is a unified approach:
cited integration
of compensation management with
payroll 69% and accounting 51%
as a top priority.Source: Total Compensation Management
69%
69%