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

Enterprise Resource Planning, 1st Edition by Mary Sumner

Chapter 7:

ERP Systems: Human Resources


Objectives

• Examine the HR processes supported by ERP

• Understand the interrelationships among business processes supporting human resource management


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


Human Resources Problems

• Maintaining accurate employee information

• Job analysis and design

• Applicant selection

• Compensation

• Benefit administration

• Training

• Governmental reporting


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”


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


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


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


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?


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


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


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

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