Enterprise Resource Planning, 1st Edition by Mary Sumner

Chapter 7: ERP Systems: Human Resources

Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

7-1

Objectives
Examine the HR processes supported by ERP Understand the interrelationships among business processes supporting human resource management

Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

7-2

Case: Atlantic Manufacturing

Recruitment, training, and retention of sales force is difficult HR records inadequate HR paperwork and compliance requirements increase steadily Management of compensation packages difficult Needs to create a strategy for controlling the cost of various employee benefits
Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

7-3

Human Resources Problems

Maintaining accurate employee information Job analysis and design Applicant selection Compensation Benefit administration Training Governmental reporting
Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

7-4

Evolution of HR Systems
Traditionally relied upon stand-alone systems
Specialized applications for applicant tracking, compensation, benefits, attendance
Redundant data

No link to financial systems

ERP
Linked to financial systems Best practices
Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

7-5

ERP HR Modules

Components
HR Management
Personnel records Resumes Links employee data to actual benefits Allows selection from group of benefits Paychecks, tax reports, accounting data

Benefits administration

Payroll

Time and labor management Employee/Manager self service

Travel reimbursement Personnel data and benefits changes Training class
7-6

Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

HR Modules
Attributes
Integration Common database
Provide audit trails

Scalable and flexible Drill-down capability Workflow management for electronic routing of documents and other document management Process standardization Security User friendly and web-accessible
7-7

Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

 Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

7-8

Management Control Modules

HR information enables management of diverse workforce Supports managerial decision making through query and reporting tools Operational level controls
Maintain and update employee files Job analysis files Design files Regulatory files Skills inventory files

Strategic level controls

Human capital inventory for tracking employees Position control linked to budgeting Labor/management relationships Business intelligence tools for predicting trends

Module integration is significant benefit

Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

7-9

Featured Article: Keep Track of Your Employees

What are the benefits of automated time and attendance records? What advantages might accrue to employees using these systems?

Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

7-10

Featured Article: Keep Track of Your Employees, continued

Employees attendance, time at work, and skill levels
Most companies uncertain If tracked, usually manual Records usually neglected Often piece-meal, no end-to-end solution Eliminates manual process
Time-consuming Error-prone Better analysis More control
7-11

Benefits of automating

Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

Featured Article: Keep Track of Your Employees, continued

Banner Health
Selected Kronos Inc. software
Time- and labor-management Accessible from web, phone, badge terminals Information available in real-time
Allows for quick staffing adjustments

Financial benefits to employees, company

Smurfit-Stone Container Corp

Uses Workbrain Inc.s ERM3, SAP financial applications, and PeopleSoft payroll processing
Web-based employee-relationship management software
Optimized scheduling and tracking of employees Interfaces with PeopleSoft applications
7-12

Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

Summary
ERP systems include HR modules that offer records management, benefits administration, and payroll
Offer integrated operational and strategic level controls Scalable and very flexible

Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

7-13