将财务管理与人力资本管理结合的八个理由+8+Reasons+to+Bring+Financial+and+Human+Capital+Management+Together

Guide

8ReasonstoBringFinancialandHuman

CapitalManagement

Together

AGuideforPublicSectorOrganizations

TableofContents

Introduction

3

1.ImprovedEconomiesofScale

4

2.DriveBetterUserEngagement

4

3.DefinetheNatureofFunctionandProcess

5

4.ConnectingtheDotsforTrueAccountability

5

5.ControlsWorkBetterinaSingleSystem

6

6.UnderstandingtheEconomicsofTalentandLabor

6

7.PeopleImpactMissionAchievement

7

8.CreatingtheRightOperationalStructure—OrganizeAroundPeople

8

8ReasonstoBringFinancialandHumanCapitalManagementTogether|2

Introduction

Allthegreatpartnershipshavetheirupsanddowns.

LennonandMcCartney,KirkandSpock;evenLaurelandHardydidn’talwaysseeeyetoeye.Whileworkingtogethermaymeansharingcommongoals,itdoesn’talwaysmeantotalharmonyandanappreciationoftheother’sstrengthsandoverallcontribution.ThesamecouldbesaidaboutthefinanceandHRfunctionsofanygovernmentagency—

twokeypartsoftheorganization,yethistorically,twoverydisparateoperationalareas.

ForbothfinanceandHR,thisseparationisoftendrivenbyorganizational

obstacles,disparatesystemsanddatasources,regulatoryuncertainty,andalackofcompletevisibilityintooperations.AsJenniferPottorf,manageroffinancial

servicesatBoardofCommissionerofTulsaCounty,saysofherown

organization’schallenges,“Themovetoafullyintegratedsystemwithfeaturessuchasself-servicecapabilitiesandreal-timereportingmeansquicker

turnaroundtimesandoverallexceptionalserviceforeveryoneweserve.”

Ifthissituationsoundsfamiliar,that’sbecauseit’scommonplaceacrosspublicsectororganizationstheworldover.Strategicuncertaintyandincompletedataaresymptomsofalargerproblem:alackofunificationamongfinance,HR,

andoperationsteams.Managersneedtomakefinancialandpeopledecisionsintandem,yettraditionalsystemsstorethisinformationindependently.

Thisseparationcreatesmultipleversionsofthesameunderlyingdataand

complicatedanalysis.Sincetodaymorethanever,publicsectoremployeesarebeingaskedtoquantifythetruecostandmissionvalueoftheiroperations,

thisfragmentedapproachtotechnologyandbusinessstrategyisincreasinglyunsustainable.Butfortunately,thereisanotherway.

Inthisguide,welookateightgoodreasonstobringfinanceandHRtechnologytogetherinasinglesystemtohelppublicsectororganizationsincreasetheir

missionimpact.

8ReasonstoBringFinancialandHumanCapitalManagementTogether|3

1

2

Improvedeconomiesofscale.

Historically,it’sworthrememberingthatthemostexpensiveITinfrastructureisonewhereeachapplicationusesitsowntechnologyfoundation(forexample,aninfrastructureinwhicheachapplicationhasitsownsecurity,reportingtools,organizationalstructures,andintegrationtools).Asthenumberofapplicationsthatshareasingletechnologyplatformincrease,thecostoftechnologygoesintheoppositedirection.Forpublicsectororganizationsthatneedtogetthemostvalueoutoflimitedfinancialandhumanresources,thosesavingsare

missioncritical.Accordingto

asurvey

withNASCIO,48%ofCIOssaythatatleasthalfoftheirapplicationsneedtobemodernizedtosupporttheirtransformationobjectives.

Additionally,publicsectororganizationsbenefitfromtheincreasedoperational

efficienciesofasharedplatform,suchasasinglecommonupdatecycle,shared

trainingmodel,commonreportingtools,andtheabilitytohandlerelatedactivitiesinasinglesystem(forexample,payingbothsuppliersandpayroll).Finally,asharedobjectmodeleliminatesthediseconomiesofscaleassociatedwithmultiple

worker,organizational,orprocessdefinitionsthatcreateobjectsthatareat

bestredundantandatworstconflicting,andwhichtheusermustmaintainorreconcile—takingtimeandattentionawayfrommission-criticalactivities.

Drivebetteruserengagement.

Asingleconsistentandcomprehensiveuserenvironmentandexperience,

includingviamobiledevices,createstheopportunitytodelivermorevalue.

Acommonuserinterfaceandaconsistentlookandfeelwhencompletingtasksmakeitmorelikelythatuserswilllearnandusethesystem.Thetruthisthat

simplicitydriveseconomy,easeofuseextendsengagement,andfamiliaritybreedsvalue.

Strategicuncertaintyandincompletedataare

symptomsofalargerproblem:alackofunificationamongfinance,HR,andoperationsteams.

Managersneedtomakefinancialandpeople

decisionsintandem,yettraditionalsystemsstorethisinformationindependently.Butfortunately,thereisanotherway.

8ReasonstoBringFinancialandHumanCapitalManagementTogether|4

3

Definethenatureoffunctionandprocess.

Considerthefollowingbusinesstasksandconstructs:projects,timetracking,

expenses,grantsmanagement,procurement,payroll,compliance,planning,

andonboarding.Thesetasks,andmanyothernaturallyhybridfunctionsand

processes,areneithersolelyfinancialnorsolelyHR—theyareboth.Yettraditionalapplicationdesignsplacethesefunctionsandprocessesindistinctsilos.

Gettingthemtoworksmoothlyinthetraditional“singledomain”designrequiresredundantworkerdefinitions,rationalizingdifferentorganizationconstructs,

creatingandmanagingdifferentsecuritymodels,andotherarchitectural

challenges.Simplyput,theseblendedconceptsareinefficienttoimplementandmanage,andthatcandangerouslyincreaseriskforpublicsectororganizationsinavarietyofareas,includingcompliance,funding,andpublictrust.

Designingthesehybridfunctionsandprocessesasasinglemodelwithshared

objectsoffersmanybenefits,includingimproveddataflow,reducedmaintenance,andgreatereaseofuse.Asinglesystemalsoenhancescontrolandmakesit

easiertoadapttochange.Asimpleexample—assigninganassettoaworker

duringonboarding—showsthereal-worldbenefitsofthiskindofapproach.Inanobject-modelworld,thisshouldbeaneasy,seamlessprocess,andwhenassigned,thatassetshouldbeeasilyidentifiableontheworker’srecord.

4

Connectingthedotsfortrueaccountability.

Allenterprisefinancialsystemssupportaccounting,whileveryfewsupport

accountability.Thefoundationofaccountabilityistheideathatspecificpeopleareresponsibleforspecificthings.EffectivelysupportingaccountabilitymeansconnectingpeopleandHRdatato“financial”objects.Forexample,departmentsdon’tspendmoney;peopledo.Accountabilityrequiresanunderstandingof

whoismakingpurchasingdecisions,andthiscomesfromhavingasystemthatclearlyanddirectlyconnectspeopletospend.Thisconnectionmakesitpossibletonotonlyknowwhoisspending,butalsowhattheyarepurchasingandif

theyarefollowingpolicyonspendcontrols.Thismakesitpossibletohavetrueaccountability,whichisessentialtothetransparencywithwhichpublicsectororganizationsmustconducttheiroperations.

Byidentifyingthelinkbetweenpeopleandtheimpactoftheiractions,

theconnectionbetweenfinanceandHRcanprovideadeepercontextual

understandingoftherelationshipbetweenpeopleandmoney.Thisprovidesa

mucheasierwaytotakeactionandinfluencechange—suchascommunicating

andcollaboratingwithindividualstocreateaplantoimprovepurchasing—thanbyusinglegacyenterpriseresourceplanning(ERP)models.Workdayincludesthe“who”onalltransactions,decisions,andfinancialobjects,givingorganizations

thevisibilitytheyneedforresponsibleandimpactfulfinancialstewardship.

Workdayhelpsorganizations

composetherightmixofsystemsandunitefinancial,people,

andthird-partydatainanintelligentdatacore

andstreamlineprocessesforgreaterinteroperabilityacrosstheecosystem.

8ReasonstoBringFinancialandHumanCapitalManagementTogether|5

5

Controlsworkbetterinasinglesystem.

SystemsdonotcommitfraudwhenleftaloneintheserverroomonaSaturdayafternoon—peopledo.Veryrarelyarekeyfinancialcontrolssolelyatechnical

challenge.Controlchallengesoccurmostlyatpointswheresystemprocessesintersectwithpeople,somuchsothatitisfairtosaythatallkeycontrols,inonewayoranother,involvepeople.

Intoday’sgovernanceenvironment,itisimpossibletoestablishaneffective

controlplatformunlessthefinancesystemhasanintimateknowledgeof

thepeopleusingit.Thisincludesanunderstandingofroles,permissions,

managementchain,andorganizationalstructure,andhowpeoplefitintootherareas,suchasprojectteams.

Itisalsoimportantthatthesecontrolsremainintactinthefaceofstaffing

changesandreorganizations.WhenfinanceandHRshareasinglesetofworker,organizational,andprocessandsecuritymodels,thenecessaryconnections

naturallybecomeclear.Inthisinstance,thecontrolframeworkbecomes

self-maintainingandself-documenting,evenfollowingstaffing,process,and

organizationalchanges.ThisreducesthecostandriskinherentinestablishingandmaintainingthegovernanceframeworkwhencomparedtosystemswherefinanceandHRoperateseparately.

WhenfinanceandHRshareasinglesetofworker,

organizational,andprocessandsecuritymodels,

thenecessaryconnectionsnaturallybecomeclear.

Inthisinstance,thecontrolframeworkbecomes

self-maintainingandself-documenting,evenfollowingstaffing,process,andorganizationalchanges.

6

Understandingtheeconomicsoftalentandlabor.

TraditionalERPsystemswerebuilttomanagetheinventoryandfixedassetsofbusiness,andassuchareextremelyadeptatprovidinginsightsaroundthose“things.”TraditionalERPwillprovideinformationsuchasacquisitioncost,

expectedshelflifeofcomponents,maintenancecost,originalandalternatesupplierinformation,andthelocationdataofthingsintheenterprisedowntoone-tenthofapenny.

Thattraditionalsystemprovidesgreatinsightintotheeconomicsofoffice

furniture,butaskthesamequestionsaboutapoliceofficerorbusdriverand

you’llhitanimpasse.InthesamewaytraditionalERPwasdesignedandoptimizedaroundthings,Workdayisdesignedandoptimizedaroundtalent.Suchcontextualinsightdoesfortoday’sorganizationslookingforeconomicinsightintopeopleandtheirperformanceasERPdidfor“thing-based”businesses30yearsago.

8ReasonstoBringFinancialandHumanCapitalManagementTogether|6

7

Peopleimpactmissionachievement.

Manystudies

showthatthebiggestimpactonorganizationalsuccessispeople.Inthepublicsector,workersareknownfortheirpersonalandprofessional

dedication,“wearingmanyhats”onbehalfoftheirorganizationanditsmission.However,keytothelong-termsustainabilityofanagencyisknowingwhereandhowtomosteffectivelydeploythosepeopleintheofficeandinthefield.

Findingthesevaluableinsightsishard,ifnotimpossible,whenfinancialandHR

dataareseparate.Gettingtheinformationaboutpeopleonthesamepageasthe

financialinformationrequirespiecingdatatogethermanuallyfromdisparatefinanceandHRsystems.Inmanycases,itmightalsoinvolveexportinginformationfroma

spreadsheetthatcontainsalistofemployeesattachedtoprogramsintoadatamarttocreateabespokereporttobeaccessedinaseparatesystem.

WithfinanceandHRinthesamesystem,insightsintowhatprograms,initiatives,

andpeoplearehighlyimpactful,andwhicharenot,candrivebetterresource

allocation,greaterefficiency,andenhancedfinancialstewardship.Onereportcan

includealltherelevantfinancialdataandalltheworkforcedataconnectedtoonefundedprojectorprogramtogether.Decisionscanthenbemadequicklyandan

organizationcanthenleverageaunifiedplatformforacompleteviewintomanaginggrantcompliance.Connectingpeoplewithbusinesscontextprovidescrucial

insightthatmakesahugedifferencetothepublicsectoragency’sabilitytooperatesustainablyandmakeagreaterimpactonitscommunitiesandconstituents.

Notonlythat,buttoday,headcountdrivesoperationalandfinancialplanning.

AnintimateandimmediateconnectionbetweenfinanceandHRoptimizesthe

planningprocesses.Thatkeyconnectionprovidesimmediatefeedbackwhen

testingvariousscenariosandadjustsimmediatelyforstaffingandorganizationalchange.Itisalsoavitalcomponentin

continuousplanning

environmentswhereslowandcomplexintegrationsbetweenheadcountandoperationalandfinancialinformationcannotkeepupwiththepaceofplanning.

8ReasonstoBringFinancialandHumanCapitalManagementTogether|7

8

Creatingtherightoperationalstructure—

organizearoundpeople.

Asmentionedearlier,fromgeographiclocationandfacilitylayout,tostaffingandprocurementprocesses,theproduct-centricbusinessesoftheERPerawere

organizedandoptimizedaroundthings.Today’soperationalstructuresaremuchmorelikelytobeorganizedaroundpeople.TheseneworganizationalprinciplesrequireacloseconnectionbetweentheconceptstraditionallyassociatedwithfinanceandthosewithHR.Andtheychangeeverything.

Procurementprovidesagoodexample.Inthe“things-basedworld,”procurementisdeeplyautomatedforphysicalefficiency.Thebuyingsignalcomesfroman

automatedquarter-endcalculationthatkicksoffanautomatedordertothesupplier,whointurnshipsmaterialsthatarereceivedandstocked.Thisisarepetitiveandconsistentprocessthatlendsitselfwelltoroboticautomation.

Nowconsiderprocurementinapeople-orientedorganization.Thedemand

signalisadecisionmadebyapersonenteredviaamanualrequisition,andtheapprovalprocessandtheaccountingcanvarydependingontheitemorservicerequested.Thiscouldincludepurpose,price,location,organization,oranumberofothervariables.Therequesttypicallyrequiresoneormoreapprovalsthatinturnoftenrequireadditionalanalysisanddecision-making.Receiptmightbe

takenattherequesto