© Prentice Hall, 2005: Enterprise Resource Planning, 1 st Edition by Mary Sumner 7-1 Enterprise Resource Planning, 1 st Edition by Mary Sumner Chapter 7: ERP Systems: Human Resources

© Prentice Hall, 2005: Enterprise Resource Planning, 1 st Edition by Mary Sumner 7-2 Objectives Examine the HR processes supported by ERP Understand the interrelationships among business processes supporting human resource management

© Prentice Hall, 2005: Enterprise Resource Planning, 1 st Edition by Mary Sumner 7-3 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, 1 st Edition by Mary Sumner 7-4 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, 1 st Edition by Mary Sumner 7-5 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, 1 st Edition by Mary Sumner 7-6 ERP HR Modules Components –HR Management Personnel records Resumes –Benefits administration Links employee data to actual benefits Allows selection from group of benefits –Payroll Paychecks, tax reports, accounting data –Time and labor management –Employee/Manager self service Travel reimbursement Personnel data and benefits changes Training class

© Prentice Hall, 2005: Enterprise Resource Planning, 1 st Edition by Mary Sumner 7-7 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

© Prentice Hall, 2005: Enterprise Resource Planning, 1 st Edition by Mary Sumner 7-8

© Prentice Hall, 2005: Enterprise Resource Planning, 1 st Edition by Mary Sumner 7-9 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, 1 st Edition by Mary Sumner 7-10 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, 1 st Edition by Mary Sumner 7-11 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 Benefits of automating –Eliminates manual process Time-consuming Error-prone Better analysis More control

© Prentice Hall, 2005: Enterprise Resource Planning, 1 st Edition by Mary Sumner 7-12 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

© Prentice Hall, 2005: Enterprise Resource Planning, 1 st Edition by Mary Sumner 7-13 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