When Keith Angell sits down with a cloud-seeking client for the first time, he usually asks them two questions: why the cloud, and what do they want to accomplish by employing it?
It's not an easy answer, according to Angell, CEO and president of Velocity Technology Solutions, a New York City company that helps implement enterprise applications. With so many different cloud solutions, it can be hard to know where to start - and there's no rule of thumb to follow. "I have 500 customers that run ERP systems and no two are alike," he said.
Finances and human resources are two of the biggest drivers of company success. Therefore, many SMB leaders tend to make their first cloud investments in either HR or financial-related software. But, even then it can be confusing to know what to buy first.
So does HR drive finance? Does finance drive HR? Or do they work together, much like a pilot and co-pilot?
A recent Inc./Oracle survey --focused on present (and past) Inc. 5000 members --asked respondents to list their most important areas for investment in 2017. Over three-quarters (77 percent) said that hiring and retaining the right talent was at or very near the top of the list. When asked about financial priorities for 2017, 65 percent said they wanted better insights into planning and budgeting.
Deciding where to invest requires companies to ask themselves some tough questions, including where do they see themselves in the future, said Angell. His clients have to think about what they need now and what they think they'll need in three to five years. "What processes will we need? How many accounts are we going to manage?" he asks. "Based on your business, what module gives the best return on investment?" A point solution that solves a problem today, may not be the best solution for tomorrow.
While both human capital management (HCM) software and enterprise resource planning (ERP) solutions can help companies increase revenues and profits, they do so in different ways. Financial software is often used to gain better insights into company data, whether that's accounting figures, invoicing numbers, budgeting, and more.
Those insights can then be used to increase efficiencies. For example, a business might realize it's spending too much in one area when it should be spending more in another, such as entering underserved markets or finding new ways to reach existing customers, said Steve Cox, Group Vice President, Oracle ERP and EPM Product Marketing. "It allows you to develop data mastery, a new skill that's a must for any business' financial function," Cox said. "Data mastery enables your organization to make the best business decisions, act on insights on where your business is right now, and explore new and exciting opportunities and markets."
Cox explained that it's also important that any financial solution leverages mobile, analytics, social, and even big data and Internet of Things (IoT). More importantly, though, it must make sense for the company. If it's more financially driven (e.g., margin improvement is critical to success or regular forecasting is required) then it could make sense to invest in finance first. "Review your current IT systems, and think about whether you're able to get the right data at the right time to make better business decisions," said Cox.
Helping company culture
Those who think talent is the most important contributor to their company's success may be more inclined to invest in HCM applications first--and for good reason. This software can help SMB leaders improve their hiring practices, better track staff performance, allow employees to set and meet career goals, and increase company productivity, among other things. "It's the engine of organizational growth that allows smaller companies to grow into big ones," said Bertrand Dussert, Oracle's Vice President of HCM Transformation.
This data can then be used to enhance a company's culture, which the Inc./Oracle survey found was the most important factor in hiring the right talent. But how can technology help with a very intangible concepts such as culture? Well, according to Dussert, the right HCM cloud technology can help the senior leadership team to "communicate the company culture to potential candidates, better select talent that will strengthen that desired culture, and measure conformity to cultural norms. It can also reinforce positive behavior through talent management, performance management, and compensation processes."
Two applications are better than one
Generally, investments don't stop with one application. It's an ongoing process, said Angell, so, at some point, a company may find itself with both. Indeed, more people are buying HR and finance software together, said Cox, because the two areas are intertwined. "HR and finance processes are connected," he said. "Every time there's a change in your organization's structure [that affects] your people - it affects your finance processes." For example:
- The addition of new departments impact budgeting (both will have to be created and approved)
- When opening a new office (in a new country), HR needs to make sure the payroll process is compliant with local regulations
- When employees leave the company, requisitions in their approval queues need to be rerouted based on established business rules
Dussert agrees that business owners should consider the both application suites together. Companies can't run without great people or solid finances. "You can't pay your employees or run your business without good financial systems, and you don't have a business without employees to build great products or deliver services to your customers," he said. "Both are important, and both are now fully ready to be moved to the cloud."
To learn more about how fully integrated financial and HCM applications can help your company "get going, get better, get ahead," download our newest ebook (based on our joint survey) - Success Factors Driving America's Fastest Growing Companies - today.