Chief Financial Officers looking to get the greatest return on their technology investments in 2013 should turn their attention to the new, single-solution human capital management (HCM) products on the market, according to Ian Campbell, President and CEO of Nucleus Research. 

Single HCM solutions: Why CFOs should care in 2013

Chief Financial Officers looking to get the greatest return on their technology investments in 2013 should turn their attention to the new, single-solution human capital management (HCM) products on the market, according to Ian Campbell, President and CEO of Nucleus Research.

"CFOs are looking at their portfolios of decisions to make in 2013. No one has an unlimited budget, so they are asking themselves, 'What do I do first, what's going to deliver the greatest value to my organization?'" Campbell said. "We found certainly for CFOs, if they haven't already looked at HCM solutions, they should start looking."

Campbell, an expert on ROI and total cost of ownership for HR technology solutions, recently participated in a roundtable webinar on cloud-based HCM with Ceridian's Senior VP of Products and Technology, Larry Dunivan, and Ceridian's CFO, Lois Martin. Their discussion focused on SaaS HCM solutions that encompass HR, payroll, time, tax and benefits in a single application with one employee record and real-time data.

Martin said, "A true HCM solution provides a comprehensive view of an entity's biggest investment - that being their people, their people assets, and all the associated investments and expenses surrounding those people." While there are many benefits to a single HCM application, the top advantages Campbell, Dunivan and Martin cited were:

  • Real-time data for improved accuracy, compliance and decisions
  • Quicker implementation and time-to-value
  • Productivity gains across the organization

 

Real-time data impacts the bottom line

Why should a financial officer care about a single solution for HCM, such as Ceridian's Dayforce HCM, versus using several "integrated" systems? Using an estimate of 1 percent as the average payroll processing error for integrated and possibly disjointed time-and-pay solutions, there could be $100,000 in leakage for every $10 million of payroll processed. And this is a conservative estimate; Campbell said that Nucleus research shows actual payroll error rates to be closer to 1.2 - 2.4 percent.

Dunivan said, "This is where a real-time payroll engine becomes very important. When all of an employee's HR, time and pay data lives in the same place, there are no delays. Changes are immediate, and so the risk of errors or non-compliance fines and penalties is significantly lower than with integrated solutions."

Another advantage for CFOs with a real-time HCM system is greater visibility into an organization's costs and data. Martin said, with comprehensive solutions like Dayforce HCM, "You can, any day, any hour, go in and pull out information, and it's up to date. This enables you to make educated decisions much more quickly."

With many integrated time and pay systems, batch updates must occur to synchronize data between different databases. This means the data is not always up to date, which could lead to "reactive" decisions based on limited or delayed views of HR, time and pay information.

Faster implementation and ROI

Martin cites lower implementation and ongoing maintenance fees as another appealing trait of today's best SaaS HCM solutions. She said that with a shorter implementation cycle and greater user acceptance, organizations can realize the benefits of a new system sooner.

Campbell agrees: "Time-to-value is probably the most important thing we can talk about with CFOs. They want to know how much risk they have, how long they are going to be out the money, and when it's going to be net-positive to them. They ask, 'How long until I cover my costs?'"

Systems such as Dayforce HCM are "out-of-the-box" solutions, meaning there is no time-consuming customization needed for each new client. Rather, it's a configuration-based system, which is much faster to implement and adapt to an organization's specific needs. Campbell said, "The more I have to customize, the higher my risk, and the financial folks don't like that."

Campbell said, "We also see adoptability and usability as core factors that drive ROI. We say, 'If the user doesn't use it, the ROI is always negative.'" Products such as Dayforce HCM that have scored high on Nucleus' value matrix displayed excellent usability and adoptability in actual customer deployments.

Improved productivity

We asked our webinar viewers, "When considering new technology, which most influences your buying decision?" Eighty percent chose the answer: Productivity improvements resulting in tangible cost savings.

For administrators, a single application for time and pay eliminates a number of redundant, time-consuming tasks. Adjustments can be made at any time and in any order during the pay cycle. With no need for data synchronization, payroll processing time is cut in half and resources are free to tackle more strategic initiatives.

Campbell said that cloud-based HCM solutions such as the Dayforce platform produce "pretty dramatic productivity improvements in many areas; not just traditional back-office, but also for the front-line employees and managers" due to their intuitive employee self-service functionality.

Time for a change in 2013?

Customers using Ceridian's legacy time and pay products may be wondering what all this HCM talk means to them. Do they have to switch? According to Dunivan, if customers are comfortable in their current solutions, there is no pressure or timetable for them to make a change. But if they are ready to consider new options, we can provide the guidance they need.

Dunivan said, "We are here to help our customers understand our strategy moving forward and find the right time to move to the new technology, the best way to make the transition for each individual client."

For more information:

  • Watch Ceridian's CFO webinar recording (you will be asked to register for the webinar first, and then you will be able to watch the replay)
  • Learn more about Ceridian Dayforce HCM