Reading the HR Technology LinkedIn discussion started by Naomi Bloom, Modest Rant — Applications Integration by Any Other Name… Is Something Else! I feel compelled to add some data to the discussion along with our bottom line recommendation — if your organization is just getting started with talent management integration, consider integrating through a single point – with a core HRMS that also has talent management functionality. A primary reason for addressing the issues of integration is to provide data for decision making as organizations that do outperform others that don’t in terms of financial performance.
Read on to see which solution types are best and for the proof of value from our latest CedarCrestone HR Systems survey respondents.
It’s a complicated discussion — one we’ve been investigating in the survey for several years. Three years ago, integration was an emerging HR technology topic; today it is a necessary dialogue for every HR leader.
To develop the questions to ask, I did some due diligence with various integration specialists at several practitioner organizations, several vendors and some valued analysts such as John Sumser. The title for this commentary comes from a blog John wrote last summer. As John said in our interview, “the lack of integration is why most organizations can’t produce data for decision making for managers.” And, to me, since organizations that are giving managers such data outperform significantly, those that don’t, this discussion is extremely important. (Validating my assertions, our 2013 survey value chain analysis found statistically significant links between those organizations that adopted BI/analytics tools and provided managers with direct access to that data and improvement on two key HR metrics, acquisition and development of talent, along with one key business outcome of improved competitive advantage. Additional statistical validation found that top performer organizations with BI and direct access by managers outperform on four financial metrics .
The discussion is important, which is why I’m taking such care in sharing the details of our analysis efforts.
In this year’s survey, we wanted to get a handle on:
- Type of integration between the entire set of talent management solutions and the HR management solution and among the individual talent management (TM) solutions.
- Impact of integration on HR technology expenditures.
- We further wanted to learn which of the vendors provide the “best” solutions, with our hypothesis being that those with a unified solution would be best. (Unified meant that the solution set had real time process level integration.)
So, we asked respondents to answer their type of integration between TM and the HR management system (HRMS) and between TM and TM (two repetitive question sets asking them to select the one response that best characterizes their approach and asking them to consider an example that represents their highest level of integration). The definitions used for TM-TM (and only answered if the respondent reported they had at least two TM solutions) were:
- No integration: totally separate processes handled in separate solutions/no integration has been tackled.
- Manual or minimal integration using FTP integration or perhaps HR/HRIT runs a report from one solution, exports to Excel, and then loads to another solution.
- Simple integration using vendor supplied APIs (or internally developed APIs)—one way integration from a talent management solution to another talent management solution (for example, a learning management solution feeds the performance management solution upon course completion).
- Two-way integration between the talent management solutions that is fully automated provided as a solution set from your vendors or using middleware/SOA.
- Real time solution in place: all talent management processes used, their data and reports are available on the same platform (no integration required).
We further asked respondents to characterize the impact of integration on their HR technology expenditures. (None, Low – minimal integration less than 10% of budget, Medium – moderate integration of 10 to 25% of budget, and High – over 25% of budget).
While the results are complicated, the bottom line is that:
- Real time process level integration is not very far along across the HR community. Less than half of respondent organizations indicated they even had some integration among talent management solutions.
- The truly unified HRMS and talent management vendor solutions currently more frequently get the “real integration” designation from respondents.
- All other options require substantial integration effort. This means that organizations with any other vendor solutions in use did not receive a “real integration” designation from respondents.
- The expenditure information can be sliced and diced in multiple ways and most organizations because they are not very far along to date have low or medium integration expenditures, with somewhere between 1% and 25% of their budget going for integration.
The holy grail of HR integration requires two parallel work streams – both internal process work and technology solution work. For the process work, it is important to develop your own use cases requiring process-level integration. For the technology solution, our conclusion and recommendation is that single point talent management solutions in place make it more difficult to integrate and will require custom solutions to achieve real time process-level integration. So if your organization is just getting started with talent management integration (and half were), consider integrating through a single point – a core HRMS that also has talent management. Otherwise, expenditures will range up to 25% of your HR technology expenditures.
We could analyze this material until the cows come home. Should we do that, or should we ask our question set differently next year? This year, we found some interesting insights based on the integration questions we asked – hopefully shedding more light on the “integration – unification” discussion.
In the spirit of collaboration that has always fed the CedarCrestone HR Systems Survey, I invite you to provide feedback on how to ask our questions for the 17th annual CedarCrestone HR Systems Survey to ensure we can provide even greater value.
 Top Performer organizations are 57 of the 1266 respondents this year that are the top 20% of all the publicly traded organizations that responded to the CedarCrestone survey.