HR plus Finance will power business change

(c) MIT / Oracle 2017 - HR plus Finance study
A new study by the MIT Technology Review and Oracle has unveiled insights into how companies are enabling the changes brought on by cloud transformation programs. The survey reveals some interesting directions for Finance, HR and IT Teams. The boundaries between teams are breaking down.

There were 700 respondents to the survey. These included representatives from Finance, HR and IT. 290 C Level executives, 140 senior management and 270 mid level management were surveyed. The survey was global with 35% questioned in the Americas, although most of these were from USA or Canada, 40% from Europe, Middle East or Africa and 20% from Asia. The majority, about 75% were from companies that post revenues between $250 million to $1 billion. While different industry sectors were questioned, no breakdown was given. Though not clearly stated the inference is that the respondents are all on the journey to cloud adoption for both HR and Finance.

HR plus Finance delivers

94% of those companies that have moved to the cloud found the solution at least met expectations.

This is an impressive statistic and one that companies who have not yet started on the journey should take note of. What wasn’t revealed was why the 6% did not meet expectations. This would infer that the survey was mainly quantitative rather than qualitative. Understanding why cloud projects have fallen short would be interesting to know.

The report goes into detail about what the advantages gained by companies are. Joyce Westerdahl, executive vice president and chief human resources officer at Oracle stated: “The ERP-HCM Cloud integration gives greater visibility into how organizational changes impact budgets, travel and expenditures, forecasts, and approvals, among other things.”

This is but the tip of the iceberg when looking at the real benefits it can provide.

What benefits were HR plus Finance looking for?

Interestingly the reasons behind the move to cloud was one of the major discrepancies between the C Suite and managers. Only 18% of the C-Suite saw the change as driving down costs while 45% of mid level managers believed it was the reason. The C-Suite also saw cloud as a way to resolve the shortage of IT skills around legacy solutions when compared to managers. In general though there was a consensus around other areas.

More than a third saw HR and Finance in cloud as a way to increase communication between departments. 35% actually plan to take it a step further by combining the finance and HR departments.  Though how they will achieve that wasn’t covered.  More than 40% saw the solutions increasing productivity.

Change changes business

Dee Houchen, Snr Product Marketing Director - ERP Apps at Oracle (Image credit Linkedin)
Dee Houchen, Snr Product Marketing Director – ERP Apps at Oracle

These objectives were broadly met in those companies that had completed the migration. In terms of specific objectives all were met or exceeded by at least 85%. Decision making has improved according to 40% of respondents in both finance and HR. While communication between finance and HR has improved it seems that HR (40%) believes it has improved more than finance (27%). However Finance are slightly more confident about future collaboration with 80% seeing the improvements in the longer term.

This improved integration will reap rewards for business adopting and combined approach. Dee Houchen, Senior Director of ERP Solutions at Oracle concluded:  “As finance and HR increasingly lead strategic organizational transformation, ROI comes not only with financial savings for the organization, but also from the new insights and visibility into the business HR and finance gain with the cloud. People are at the heart of any company’s success and this is why we are seeing finance and HR executives lead cloud transformation initiatives. In addition, improved collaboration between departments enables organizations to manage the changes ahead and sets the blueprint for the rest of the organization’s cloud shift.”

Does change means new skills

The survey draws some interesting insights about the future make up of teams. Both HR and Finance see IT skills as important in the future within their departments. However it is soft skills such as time management, active learning and problem solving that companies are looking for in the future rather than technical skills.

This may be a nod to the automation that cloud HR and financial systems brings organisations. Automation will see many repeatable tasks taken over by “artificial intelligent” systems. While IT Skills will become important within departments what happens to IT teams. According to the report they will focus more on innovation. This is backed by the statistic that 56% of C-level respondents reported that innovation in IT teams has improved after deployment.

What does this mean?

Oracle have drawn a conclusion from the survey that sees organisations continue to evolve.  Andy Campbell, HCM Strategy Director at Oracle commented: “As organizations navigate technological changes, it’s critical for the C-suite to empower its employees to evolve their individual business acumen. Many businesses understand this and it’s encouraging to see 42 percent planning to provide their teams with management skills training to help them break out of their traditional back-office roles. The learnings from the move of finance and HR to the cloud will ultimately spread across the organization as, together, they conceptualize the shape of the next disruption.

In the future HR/Finance/IT leaders may rotate between roles.  The CFO will still have accounting responsibility within the business. There will still be technical experts required in each of the teams. It may be that middle management roles move around more between teams. The idea that departmental leaders in HR, Finance and IT comes from outside those teams may seem unlikely to some. There could be significant benefits though.  Integrated HR and Finance solutions already bring the teams closer together. A better understanding of each other could be turned into a wider competitive advantage.

The message from Oracle is that HCM plus Finance is a good thing for companies.  With both Oracle Fusion and NetSuite both able to provide HCM plus Finance cloud solutions it is a clarion call to customers. Ironically this is a similar message that Workday, a competitor also pushes in its marketing.

HR plus Finance will power business change was last modified: by

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