For companies going through transactional events such as mergers or acquisitions, change happens at nearly every level of HR. In order for a smooth integration of a new business, changes often must be made to unify and update employment policies, hiring practices, pay practices, benefits, and key HR business processes, and more. The planning and change management efforts to support organizational transformations can be monumental.
Boston Consulting Group estimates that it takes an average of 180 days to successfully integrate a new company. While companies invest a lot of time and effort in mapping these changes and preparing for the initial disruption they may cause, many fail to put the same focus on the most important component of these changes – the HCM software that will serve as the backbone of the unified processes and data. In other words, the business may be preparing for the change, but is the system that will support the change ready?
Mergers and Acquisitions – Different Approaches
There are many different paths to integrating the HCM systems and processes of merged companies. Some companies acquire or merge entities but continue to operate with disparate HCM systems and processes for some time before unifying them. They may go several years before the need for unified data, reporting or business processes forces them to combine onto a single platform. In short, they decide they can live with fragmented reporting, processes and inconsistent data until the time is right for them to combine.
Many more companies, however, choose to integrate merged companies into their Employee Central systems at the time of the merger when their policies, practices and procedures are being harmonized. While many of their integration challenges are similar to companies that wait to integrate later, the urgency of time and the increased pressure for data accuracy and successful transformation can make it a more strenuous – and stressful – effort.
10 Key Benefits to a Unified Employee Central System
The best practice approach to handling mergers and acquisitions is to unify the HCM systems into a single platform like Employee Central. There are many specific benefits to having a single Employee Central instance as your system of record when combining or merging new entities. Here are ten of the most important benefits:
Improved reporting across the entire organization
Employee data can be leveraged in standard and ad hoc reporting solutions within SAP SuccessFactors, providing the ability to easily create accurate management reports like global headcount or turnover. Maintaining your global employee population in the same system facilitates consistent management reporting and improves visibility and decision making.
The ability to create strategic analytics and insights
Tools like SAP SuccessFactors Workforce Analytics provide concrete and actionable insights on workforce data to drive business strategy today and help HR leaders plan for the future.
Visibility into newly created entities, planned integrations or organizational changes
Employee Central’s Company Structure Overview tool lets you not only view your organizational structure today but also lets you quickly visualize future-dated organizational changes or restructuring efforts.
Increased regulatory compliance
Adding newly acquired companies to an HR portfolio may add new geographies to HR’s scope of responsibility. Whether a company operates in one country or twenty countries, HR has an obligation to monitor and comply with rapidly changing employment-related regulations. SAP SuccessFactors offers comprehensive localization services that not only monitor for changes in more than 80 countries, but provide updates to software and processes to keep companies compliant.
Improved HR operations and visibility
SAP SuccessFactors Employee Central Service Center provides a portal used by both employees and HR staff to manage HR service-related processes. Employee Central Service Center provides HR with insights and reporting into employee interactions as well as providing both newly acquired and existing employees with a source of communications, policy, tools, knowledge and more.
Centralized systems management, licensing and processes
Consolidating all employees and data into one Employee Central system simplifies system administration, reduces costs and complexity by consolidating licensing and subscriptions, makes it easier to train users and unifies business processes across the entire organization.
SAP SuccessFactors provides regular quarterly updates to system features reduce the time you spend updating software or making changes to meet upcoming regulatory changes. Universal changes are applied automatically, but you have the ability to opt in or out of other optional changes in each release.
Fewer interfaces and integrations
Consolidating merged or acquired companies onto a single Employee Central platform will eliminate the need for many interfaces between disparate systems. Having a single, core HR system will also reduce the number of outbound interfaces you must create to external providers like benefits, payroll or government. In addition, SAP Cloud Platform Integration Services helps Employee Central customers by delivering an effective, centralized platform for enterprise-grade integration.
A consistent, high-grade user experience
Having a single source of truth and one Employee Central portal for all employees will speed on-boarding of newly acquired or merged employees, facilitate improvements in data accuracy, speed acceptance of new HR business processes and enhance user experience.
Creation of a platform for HR innovation
SAP SuccessFactors Employee Central offers its customers a steady stream of innovation that can extend core functionality and improve talent, HR, payroll, time, benefits processes. Related solutions and features like Intelligent Services, SAP Fieldglass, and SAP Concur add extended functionality like management of contingent workforces, travel and expenses and more.
If your business is going through a merger or acquisition, the implementation of a unified core HCM solution must be included in the scope and planning activities that will support the transformation. A global core HCM solution like SAP SuccessFactors Employee Central supports the changes that accompany HR transformation by:
- Introducing standard global HR processes
- Standardizing roles and responsibilities across HR and its related functions
- Leveraging self-service processes to improve and standardize user experience for employees
- Requiring a thorough review of data accuracy
Companies integrating a merged or newly acquired entity into their existing Employee Central systems must plan and execute the process carefully. A knowledgeable implementation partner – preferably one designated by SAP for its Recognized Expertise in SAP SuccessFactors® Employee Central and Payroll – can assist them with the process, including:
- Assessing the legacy HR and payroll systems and mapping data and functionality
- Identifying which business processes in the merged entity would benefit most from the latest SAP SuccessFactors technology, including:
- Contingent Workforce Management
- Document Generation
- Global Assignments
- Concurrent Employment
- Apprenticeship Management
- Protection Against Unfair Dismissal
- Ensuring the proper subscription or licenses are in place
- Developing a thorough plan, including:
- Global requirements gathering
- Local requirements gathering
- Data migration
- Change management and training
- Identifying legacy systems or subscriptions to be retired
To learn more about the ways Employee Central or Employee Central Payroll can transform your HR systems and processes, please contact us here.