What Type of Master Data is Managed by Human Resources?
The ability to access accurate and up-to-date employee information is a “must-have” for Human Resources organizations and the business units they serve. While employee data was once managed in a central payroll system, it is now shared by a wide range of Human Resources systems including career and talent management, compensation, relocation and training. Further, employee master data has become highly complex since it not only describes a person, but also all the attributes and relationships that define their role, competencies, security privileges, compensation package and reporting structure.
In addition, Human Resources departments need to manage a growing amount of master data beyond employee master. Organizational structures are typically comprised of complex, multi-dimensional hierarchies such as legal entities, geographies or business units, and classifications. Each needs to be maintained to support the various facets of Human Resources services.
Why is MDM a Critical Solution for Human Resources Teams?
Deploying New HR Services
While the payroll process is a key activity, Human Resources departments have evolved to become value-added service providers to the business. They now must deliver a wider range of shared services in order to better manage human capital. These new services, including career and talent management, relocation, compensation and training all need to share a unified employee master. Moreover, employee master data is no longer simply a person's employment record in an ERP system. It must now have the flexibility to be decoupled from applications, extended with complex attributes and ultimately governed outside of the context of any specific HR system. By deploying a centralized employee master, Human Resources departments gain more flexibility for implementing new value-added HR services, all linked to a single version of the truth.
Human Resources MDM Requirements
» Ability to model complex employee definitions
» Ability to define relationships across all HR services
» Ability to synchronize employee master with any IT system |
Mergers & Acquisitions
Human Resource master data management becomes even more complex when companies merge or acquire others. While HR systems may combine over time, a merger or acquisition makes it necessary to manage the transition by maintaining multiple hierarchies such as employee reporting structures or organization charts. An MDM solution helps maintain multiple versions of HR master data and when required reconciles it into one standard definition.
Human Resources MDM requirements
» Ability to manage concurrent versions during company transitions
» Ability to compare and merge versions
» Ability to maintain cross-references
» Ability to import and manage "future-state" data in staging areas |
HR Manages the Process for Reorganizations
Human Resources departments play a key role in reorganizations. While reorganizations can be initiated by other departments such as Finance, ultimately any staffing changes impact the organizational structures owned by HR. An MDM repository gives HR managers the ability to maintain multiple versions of complex hierarchies, to perform impact analysis on reorganizations and to ultimately compare and merge organizational structures. A flexible MDM solution maintains consistent HR master data while supporting rapid, collaborative governance processes and the modeling of proposed changes.
Human Resources MDM Requirements
» Ability to manage past, present and future hierarchies concurrently
» Ability to compare and merge hierarchies when re-organizations happen
» Ability to keep track of "as-of" versions |
Outsourcing of HR Services
More and more companies rely on HR outsourcing for services such as overseeing organization structure and staffing requirements, recruiting, training, benefits administration or employee orientation programs. Companies view HR outsourcing as a way to temporarily add HR-specific capabilities without increasing headcount. But outsourcing HR services doesn't mean losing control of core HR master data. An MDM solution provides the foundation for well-governed HR master data that can be easily shared with third-party service providers.
Human Resources MDM Requirements
» Ability to maintain a unique HR master
» Ability to share MDM master data with third-party service providers
» Ability to define strict access rights on HR MDM |
Consistent Master Data = Improved Business Intelligence = Accurate Reporting
Human Resources departments use BI (Business Intelligence) solutions for analyzing human capital in many dimensions. Without a unique definition of HR master data, business intelligence solutions consume incorrect or inconsistent data that can result in low quality reports. An MDM solution helps improve the quality of master data before it is consumed by BI solutions. In addition to core HR master data such as employees or organizational structures, an MDM solution for HR enables the definition of reference data that is specifically used in BI such as KPIs, dimensions or classifications.
Human Resources MDM Requirements
» Ability to maintain complex dimensions and hierarchies
» Ability to define and maintain reference tables for BI
» Ability to manage multiple versions (past, present and future) |
Localizing to Meet Market and Regulatory Requirements
Large multinational companies must maintain a centralized global Human Resources repository but at the same time respond to master data localization requirements. Reference data such as skills, training and local data protection rules must be adapted for each country or region. Through MDM, HR definitions may be adapted without duplicating information; this ensures that the integrity of the master data is maintained.
Human Resources MDM Requirements
» Ability to define inheritance rules between global and local levels
» Ability to localize master data in any language
» Ability to enforce strict validation rules and audit trails for compliance
» Ability to define fine-grained role-based and user-based security permissions |
Enterprise-wide Data Governance
Human Resources departments collaborate and share master data across the entire enterprise. For example, a new employee may be linked to a cost center owned by Finance & Accounting or a new organization structure may be linked to assets or locations owned by Sales & Marketing. These examples illustrate why Human Resources teams must be part of an enterprise-wide data governance initiative with comprehensive change management and cascading approval processes.
Human Resources MDM Requirements
» Ability to configure change management and cascading approval workflow
» Ability to provide any end-user with a simple workflow User Interface (UI) without training
» Ability to define fine-grained access rights
» Ability to define relationships and integrity checks between data domains |
What Solutions are Available for Human Resources MDM?
Companies have historically managed their HR master data in their ERP systems, which were mainly used for payroll. Typically the solutions marketed by well-known technology brand names have been limited to simple employee definitions and only address part of the increasingly sophisticated needs of the Human Resources function.
ERP Products
ERP solutions such as SAP or PeopleSoft are still widely used by Human Resources teams for master data reference, typically because they are the point of entry for new employee data. However; where ERP solutions fall short in managing complex master data is with their fixed data models. And because of this, users may resort to duplicating information in spreadsheets or custom developed solutions which contribute to inconsistencies in HR master data.
Spreadsheets
Spreadsheets are still one of the most widely used solutions by Human Resources for managing master data. While flexible enough for end users, they lack critical data governance features such as collaboration, validation controls, security or sharing. Even when coupled with an enterprise portal, the duplication and manual governance processes inherent in the use of spreadsheets invariably cause extensive inconsistencies and errors in operational and analytical systems.
Custom Developed Solutions
Companies frequently invest in their own custom solutions for MDM, primarily because off-the-shelf software doesn't sufficiently address their needs. While custom development enables a company's specific requirements to be met, it often results in a rigid and costly solution with low user adoption rates. Custom solutions have difficulty managing flexible data models and business rules. They rarely include sophisticated features such as version control or workflow or offer the scalability to meet enterprise-wide data governance requirements.
Introducing Orchestra Networks EBX5 Solution
Orchestra Networks™ EBX5 is the first Master Data Management software to provide Human Resources teams with all the features needed for true data governance in one single software solution. The product offers a 100% web-based UI and enables HR teams to build a single point of governance for all master data.
Discover The Top 5 Benefits EBX5 Delivers to Human Resources Organizations |
Download our Solution Overview