Why data is the key to Finance/HR collaboration
FYI, this story is more than a year old
Article by Stephen Jack, Vice President, Workday Australia and New Zealand
Digital transformation offers an important opportunity for CFOs and CHROs to work closely together to drive business performance. But translating a talent strategy into a business strategy requires both parties to have access to the same data. How can both teams get a consistent, 360-degree view of metrics and a cohesive set of analytics to make data-based decisions?
As digital transformation enables cross-organisational transparency and data sharing, Finance and HR can both deliver better results by collaborating more effectively.
Finance and HR have many dependencies, with HR’s traditional remit including a large number of levers that influence key financial performance metrics. Talent frequently accounts for 60-70% of an organisation’s cost base. People play a critical role in the service excellence, productivity and value creation that help to create profit margins.
Understanding what really motivates and drives the productivity of individual employees is a critical piece of the productivity and profitability jigsaw – for which both departments are accountable.
Yet, CFOs and CHROs frequently clash over what’s the best workforce strategy and who is best placed to control workforce costs. These clashes are often attributed to culture, but I believe they have more to do with perspective.
Traditionally, CFOs and CHROs have seen the same organisation through very different lenses. They’ve been drawing insights and making decisions based on:
Different metrics – HR’s traditional metrics of attraction, retention, training completion and engagement don’t readily translate into financial implications with a direct business impact.
Different data – Finance and HR traditionally operate from separate systems, making it hard and time-consuming for either team to extract and correlate data. So, both the CFO and the CHRO know how much training costs, but neither can connect the dots to see whether or where that expenditure is delivering an uptick in business performance.
To translate a talent strategy into a business strategy, Finance and HR must be able to evaluate workforce management on an ongoing basis. This requires access to real-time, integrated HR and Finance data, enabling leaders to track the tangible, bottom-line results of HR metrics.
To achieve this, Australian global business process outsourcing firm, Acquire BPO has recently moved to a single, unified system for Finance and HR. The new system provides its CFO and CHRO with total visibility – so they can make decisions based on commonly available, real-time data from a single, object-oriented database.
According to Acquire BPO’s CEO Scott Stavretis, the new system “ensures we’re future-ready with streamlined processes, one unified platform, global consistency and local variation.”
By deploying a robust single system that supports HR and finance, Acquire BPO is producing greater insight, efficiency, engagement and collaboration among its finance and HR teams. Eliminating data silos has already delivered measurable improve efficiencies and increased organisational agility.
It has also overcome the issue of data rapidly becoming ‘stale’ because updates in one system are now immediately made everywhere.
Organisations like Acquire BPO have total control over all the costs associated with running their businesses – and can see how costs impact all the outputs that impact profitability. They can measure how much a 1% increase in engagement increases productivity – or whether training investment leads to more sales.
With access to the same data and analytics, CFOs and CHROs can work together to ensure the company is hiring the best people – and pay salaries based on the expected return on investment from a candidate’s skills. They can identify which employee benefits translate into bottom-line results.
In a time of ongoing change and transformation, accurate, data-based workforce planning has never been more important for success.
Unless organisations have a single version of the truth, how can leaders in either department make mission-critical talent decisions with confidence?