HR systems integration is a costly problem

Enterprises are wasting millions trying to integrate human resources (HR) systems that are not designed to communicate with each other, according to HR managers.

Enterprises are wasting millions trying to integrate human resources (HR) systems that are not designed to communicate with each other, according to HR managers.

Human resources managers at major organisations, including HSBC, Royal Dutch Philips and Siemens, told delegates at the HR Tech Europe conference in Amsterdam that suppliers' failure to develop compatible systems was one of their biggest concerns.

Multinational enterprises often have hundreds of different HR systems, covering multiple countries and multiple HR functions, but struggle to get them to work together.
 

Rob Visser, global head of HR-IT at financial services company ING, said suppliers should take the initiative to collaborate on developing common data standards.

"I feel I am part of the vendor community, because a large amount of my budget is spent getting different vendors to work together," he said.

Richard Mutter, group head of HR technology for HSBC, said suppliers were not always willing to help with integration problems.

"As long as HR technology vendors treat the data model as a unique selling proposition, we are going to continually waste money trying to get those applications to integrate data," he said.

Mobile phone company Nokia said it had faced challenges integrating its SAP HR system with its talent management system.
 

"The two systems are not necessarily fully synched together," said Andrew Winnemore, head of HR global services at Nokia.

Thomas Otter, research vice-president at Gartner, compared integrating HR IT systems to a vet sewing a tail back on a dog.

"Integration is easy if you know which is the dog and which is the tail," he said. "But you run into problems if you try to stitch two dogs together. The problem is that the vendors all think they are the dog," he said.

Work is underway to develop a version of extensible mark-up language (XML) for human resources, which could solve the data incompatibility between HR systems from rival suppliers.

But users are sceptical that it will lead to a quick solution.

"I don't believe it will come in the next couple of years," said Jos Kayaerts, head of CHR at Siemens. "I do not trust vendors to deliver this functionality. We as end users have to pay to integrate."

Mutter said he would like to link HSBC's talent management system into its compensation management system, but has found its suppliers uncooperative.

"If you buy a compensation management point solution and you want to bring performance ratings into it, typically that is not something the vendor wants to do," he said.

The bank is rationalising 700 HR systems used across different countries by replacing them with company-wide systems, Mutter revealed.

"Over the past four years, we have deployed a global learning management system, a global resource system, and global reward, help desk and mobility systems. We have got the number of HR systems down to 300 now. I would class that as an achievement," he said.

"The biggest challenge now is whether to go for a single provider, but at the disadvantage of being beholden to a single company, versus going for best of breed and leveraging competition in the market."


 

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