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Prof. D.G. Jha / Prof. Pratima Dabholkar
7-1
Enterprise Resource Planning
ERP Systems: Human Resources
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7-2
Objectives
Examine the HR processes supported
by ERP
Understand the interrelationshipsamong business processes supporting
human resource management
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What does a companys strategy consist of ?
Company strategies concern,
How to grow the business
How to satisfy customers
How to out compete rivals
How to respond to changing in market conditions
How to manage each functional piece of the business and develop
needed organizational capabilities
How to achieve strategic and financial objectives
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Introduction
Manufacturing Organizations are complex `Systems'where the interactions between the various functionsSales, Distribution, Manufacturing, Materials,Finance, Human Resources, Maintenance have to be
managed towards a common purpose of deliveringthe customers maximum value at the optimum price. However, since most of these organizations have a
`Functional Structure', each function/departmentworks towards their own goals and objectives, ratherthan the organizational goals.
These are the issues addressed by `EnterpriseResource Planning' software solutions providing acommon, consistent system to capture dataorganization wide, with minimum redundancy.
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Whatis ERP?
ERP integrates the information across functions, andprovides a set of tools for planning and monitoringthe various functions and processes and ensuringprogress towards a common purpose
A business management system that integrates allfacets of the business, including planning,manufacturing, sales, and marketing.
ERP helps business managers to implement ERP inbusiness activities such as inventory control, order
tracking, customer service, finance and humanresources
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Human Resources Problems
Maintaining accurate employee
information
Job analysis and design Applicant selection
Compensation
Benefit administration
Training
Governmental reporting
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Evolution of HR Systems
Traditionally relied upon stand-alonesystems
Specialized applications for applicanttracking, compensation, benefits,attendance Redundant data
No link to financial systems
ERP Linked to financial systems
Best practices
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HR Modules
Attributes Integration
Common database
Provide audit trails Scalable and flexible
Workflow management for electronic routing ofdocuments and other document management
Process standardization Security
User friendly and web-accessible
H R
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Human Resources
ManagementManagement
Managers
Employees
Customers
Government
Process
Payroll
Benefits
Vacation
CompileMerit
Evaluations
& Salary
Changes
Job
Applicants
Produce
Management
Employee
Reports
Screen
Jobs &
Applications
Produce
Government
Reports
Employee Data
Files
EmployeeData
Evaluations
Salary
Merit &
Salary
Sales Data &
Commission
Employee
Data
Merit
ApplicantData
Employee
Summaries
Job &Applicant
Data
EEO
Data
GovernmentReports
Management
Reports
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Human Resource Module -
ERP
Human Resources is another widelyimplemented ERP module.
ERP HR module streamlines the managementof human resources and human capitals.
HR modules routinely maintain a completeemployee database including contactinformation, salary details, attendance,performance evaluation and promotion of all
employees. Advanced HR module is integrated with
knowledge management systems to optimallyutilize the expertise of all employees.
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Human Resource Module -
ERP
ERP HR modules, refers to the systems andprocesses at the intersection between humanresource management (HRM) and informationtechnology.
On the whole, these ERP systems have their originon software that integrates information fromdifferent applications into one universal database.
The linkage of its financial and human resourcemodules through one database is the most
important distinction to the individually andproprietary developed predecessors, which makesthis software application both rigid and flexible.
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Human Resource Module -
ERP The HR management module is a component
covering many other HR aspects from application toretirement.
The system records basic demographic and addressdata, selection, training and development, capabilitiesand skills management, compensation planningrecords and other related activities.
Human resource management function involves therecruitment, placement, evaluation, compensationand development of the employees of anorganization.
Initially, businesses used computer based informationsystem to:
Produce pay checks and payroll reports; Maintain personnel records;
Pursue Talent Management.
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Human Resource Module -
ERP
The most advanced modules provide broadflexibility in data collection methods, labour
distribution capabilities and data analysis
features. Cost analysis and efficiency metrics
are the primary functions. The Benefits Administration module provides a
system for organizations to administer and
track employee participation in benefits
programs. These typically encompass,
insurance, compensation, profit sharing and
retirement.
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TRAINING
BENEFITS
PAYROLL
RECRUITING
payroll programs, personnel files, health
plan documents, recruiting, Servers &networks, etc.
Example ERP HR Module
IT resources
HR processes
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Human Resources
Recruiting
Compensation
Assessment Development and Training
Planning
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HUMAN RESOURCE MODULE Human resource management is an essential factor of any
successful business.
The various subsystems under HR module are: Organizational management: (Organizational structure,
staffing, schedules, job descriptions, planning scenarios,personnel cost planning)
Personnel management: (HR master data, Personneladministration, information systems, recruitment, travelmanagement, benefits administration, salary administration)
Payroll Accounting: (Gross/net accounting, history functiondialogue capability, multi currency capability, internationalsolutions)
Time management: (Shift planning, work schedules, timerecording, absence determination)
Personnel development: Career and succession planning,profile comparisons, qualifications assessments, additionaltraining determination. Training and event management.)
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ORGANIZATIONAL MANAGEMENT
This module will assist you in
maintaining an accurate picture of your
organizations structure, no matter howfast it changes. In many cases,
graphical environments make it easy to
review any moves, additions, or
changes in employee positions.
Department and Position Details
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Human Resources with ERP
Software
Concept
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Figure 6-3 Relationships among positions, jobs, tasks, and persons who fill
positions
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Organization Chart
7-21
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Sample Resource Histogram
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PERSONNEL MANAGEMENT
Personnel management includes
numerous software components, which
allow you to deal with human resourcestasks more quickly, accurately and
efficiently. You can use these
components not only as part of thecompany wide ERP solution but also as
stand alone systems.
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i. Personnel Administration
Information is no longer owned by
specific departments, but is shared bymultiple entities across an
organization. This eliminates duplicate
entries reduces the chance for error
and improves data accuracy.
ii Employee master data
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ii. Employee master data Human resource module has a centralized database with integration to
multiple components for processing employee information. The system provides tools to save time and help you tailor the system to
fit your needs.
The HR module contains features for storing any desired informationabout your employees. Most systems have the facility to scan the original documents for optical
Storage. The HR Information system displays graphical information such as
organization charts or employee data.
The system can produce charts and reports-both standard and customerdefined.
iii. Recruitment management This function helps in hiring the right people with the right skills. Reducing the cost of recruiting and hiring new employees is a challenge
for the HR professional, who is responsible for placing people in the right
job, at the right time, and with the right skills and education. These requirements are fulfilled only through effective automation of the
entire recruitment process. The recruitment component is designed to help meet every facet of this
challenge like managing open positions/requisitions, applicantscreening, selection and hiring, correspondence, reporting and cost
analysis.
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iv. Travel Management This module helps you in processing the travel expenses
effortlessly, in several currencies and formants. HR Travel management allows you to process a business trip
from start to finish-from the initial travel request right through toposting in financial accounting and controlling.
This includes any subsequent corrections and all retroactiveaccounting requirements.
Travel management automatically calculates the tax. It automatically processes credit card transactions for a
particular trip. You reimburse costs incurred during a trip through a payrollaccounting, accounts payable accounting.
In addition, Travel management provides multiple reportformats.
You can enter receipts in any currency and then print reports in
your native currency.
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Salary Administration
This function helps you in simplifying the process ofrewarding your employees.
Administration of salaries is an ongoing processwithin your human resource department.
It is particularly important during the reviewprocesses, when your goal is to justify reward good
performance. The salary administration module assists you in the
salary review process.
Using the benefits administration component, wecan define eligibility groups and rules based on awide range of factors. We can determine the
variables, rules and costs formulas for eachbenefits plan.
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HR & Payroll
1. Personnel Information (Qualifications, Experience, details)
2. Employee Profile (Performance Rating, History, Promotions)
3. New Hires
4. Vacation/Holiday/Leave Management
5. Monthly salary based on TLM and Vacation & Leave Management
6. Bonuses
7. Compensations
8. Deductions
Loan
Advances
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Time & Labor
1. Integration With Bio-Metric/Swipe Card Devices
2. Schedules/Shifts of Employees
3. Process Data to Generate Time Card with Overtime
4. Variance Reports
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Benefits Admin
1. Generates reports for the total sums to be paid towards
Bonuses
2. Provident Fund
3. ESI
4. Insurance
5. Professional Tax
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Employee
Master
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PAYROLL ACCOUNTING
The payroll accounting system can fulfill the payrollrequirements and provide you with the flexibility torespond to your changing needs.
Payroll accounting should address payroll functions froma global point of view.
You should be able to centralize your payroll processing,or decentralize the data based on country or legal entities.
Most payroll accounting systems give you the options andcapabilities to establish business rules without modifyingthe existing payroll.
Many systems have the features to remind you whentransactions are due for processing.
With payroll accounting, you have the ability to tailor thesystem to your organization requirement.
With country specific versions of payroll accounting, youcan fulfill language, currency and regulatoryrequirements.
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TIME MANAGEMENT
It is a flexible tool designed to handle
complicated evaluation rules to fulfill
regulatory requirements and determine
overtime and other time related data.
The time evaluation component stores
your organizations business rules and
automatically validates hours worked
and wage types.
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Shift Planning
Shift planning module helps you to plan your
workforce requirements quickly and accurately. You can plan your shifts according to your
requirements taking into consideration all criteria,including absences due to leave or sickness, andemployee requests for time off.
Shift planning keeps you informed at all times of anystaff excess or deficit.
Another advantage of shift planning is that it enablesyou to temporarily assign an employee or employees
to another organizational unit where they areneeded, allowing for a temporary change of costcentre.
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PERSONNEL DEVELOPMENT
Effective personnel development planning
ensures that the goals of the organization andthe goals of the employee are in harmony. Thebenefits of such planning includeimprovements in employee performance,employee potential, staff quality, workingclimate and employee morale.
i. Training and Event Management A good HR system will have scheduled
seminars, training courses and business
events. On completion of a training course, appraisal
forms can be automatically issued. Appraisals can be carried out for instructors,
attendees, business events and training
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Financial Accounting Information System (FAIS)
Payroll System
NITIE
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NITIEFinancial Accounting Information System (FAIS)
(PAYROLL-Maintaining Individual Details)
NITIE
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NITIEFinancial Accounting Information System (FAIS)
(INCOME TAX)
NITIE
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NITIEFinancial Accounting Information System (FAIS)
(INCOME TAX)
NITIE
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NITIEFinancial Accounting Information System (FAIS)
(INCOME TAX)
NITIE
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NITIEFinancial Accounting Information System (FAIS)
(PF-Maintaining Individual Details)
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NITIE
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NITIEFinancial Accounting Information System (FAIS)
(PAYROLL-Payslip in HINDI)
NITIE
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NITIEFinancial Accounting Information System (FAIS)
(BUDGET)
NITIE
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NITIEFinancial Accounting Information System (FAIS)
(BUDGET)
NITIE
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NITIEFinancial Accounting Information System (FAIS)
(BUDGET)
NITIE
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NITIEFinancial Accounting Information System (FAIS)
(INCOME-EXPENDITURE)
NITIE
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NITIEFinancial Accounting Information System (FAIS)
(RECEIPT-PAYMENT)
NITIE
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NITIEFinancial Accounting Information System (FAIS)
(BALANCE SHEET)
NITIE
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NITIEFinancial Accounting Information System (FAIS)
(RECEIPT-PAYMENT)
NITIE
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NITIEFinancial Accounting Information System (FAIS)
(INCOME-EXPENDITURE)
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SAP HRM
Personnel management
HR master data
Personnel administration
Information systems
Recruitment Travel management
Benefits administration
Salary administration
Organizational
management Organization structure
Staffing schedules
Job descriptions
Planning scenarios
Personnel cost planning
Payroll accounting
Gross/net accounting
History function
Dialog capability
Multi-currency capability International solutions
Time management
Shift planning
Work schedules
Time recording
Absence determination
Error handling
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SAP HRM
Personnel development
Career and succession
planning
Profile comparisons
Qualificationsassessments
Additional training
determination
Training and event
management
Other features
SAP Business workflow
Internet scenarios
Employee self-service
Additional Human Resources
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54
Additional Human Resources
Features of SAP ERP
Mobile time management
Management of family and medical
leave Domestic partner handling
Administration of long-term incentives
Personnel cost planning Management and payroll for global
employees
Management by objectives
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Mobile Time Management
Many employees may not have regular
access to a PC
Mobile Time Management allowsemployees to use cellular phones to:
Record their working times
Record absences
Enter a leave request
Check their time charge data
Management of Family and
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Management of Family and
Medical Leave
Human Resources module reduces
administrative burden imposed by
Family and Medical Leave Act (FMLA)
of 1993
HR system can:
Determine whether an employee is
eligible to take FMLA absences
Automatically deducts those absences
from the days the employee takes from
allowable leave
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Domestic Partner Handling
Human Resources module now
supports the management of benefits
for domestic partners and their children
Provides more flexibility in:
Customizing dependent coverage options
for health plans
Eligibility for enrollment of dependents
Designation of beneficiaries
Administration of Long-Term
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Administration of Long Term
Incentives
Companies must account for expected costs that
occur as a result of long-term incentives such as the
exercising of stock options
Human Resources module now provides moreoptions for processing long-term incentives
Integration with SAP Payroll module
Can calculate taxes accurately when
employees exercise incentives and sell theirshares in the company
SAP can share incentive data with Accounting
Management and Payroll for
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Management and Payroll for
Global Employees
Management of global employees
involves many complicated issues
Relocation plans, visas and work permits,
housing, taxes, bonus pay
SAP ERP has enhanced features to
support the management of these
issues Customized functionality for more than 50
countries
M t b Obj ti
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Management by Objectives
Management by objectives (MBO)
1954: first outlined by Peter Drucker in The Practice ofManagement
Managers encouraged to focus on results, not activities, and to
negotiate a contract of goals with their subordinates without
dictating the exact methods for achieving them
SAP ERP provides a comprehensive process to support the
MBO approach
Performance appraisals
Appraisal results can affect employees compensation
Managers can include results of achieved objectives in theemployees qualifications profile
S
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Summary Employees are among a companys most important assets
Without qualified and motivated employees, a company cannotsucceed
Human Resources department responsible for:
Ensuring that the company can find, evaluate, hire, develop, evaluate,
and compensate the right employees to achieve the companys goals
Employee training and development, succession planning, andtermination
Managing, sharing, controlling, and evaluating the data
required to manage a companys human capital are simplified
by an integrated information system Additional features of SAP HR systems address todays
changing technology and legislation
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