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1. © Prentice Hall, 2005: Enterprise Resource Planning, 1
st
Edition by Mary Sumner 7-1
Enterprise Resource Planning, 1
st

Edition by Mary Sumner
Chapter 7:
ERP Systems: Human Resources

2. © Prentice Hall, 2005: Enterprise Resource Planning, 1
st
Edition by Mary Sumner 7-2
Objectives
•Examine the HR processes supported
by ERP
•Understand the interrelationships
among business processes supporting
human resource management

3. © Prentice Hall, 2005: Enterprise Resource Planning, 1
st
Edition by Mary Sumner 7-3
Case: Atlantic Manufacturing
•Recruitment, training, and retention of sales
force is difficult
•HR records inadequate
•HR paperwork and compliance requirements
increase steadily
•Management of compensation packages
difficult
•Needs to create a strategy for controlling the
cost of various employee benefits

4. © Prentice Hall, 2005: Enterprise Resource Planning, 1
st
Edition by Mary Sumner 7-4
Human Resources Problems
•Maintaining accurate employee
information
•Job analysis and design
•Applicant selection
•Compensation
•Benefit administration
•Training
•Governmental reporting

5. © Prentice Hall, 2005: Enterprise Resource Planning, 1
st
Edition by Mary Sumner 7-5
Evolution of HR Systems
•Traditionally relied upon stand-alone
systems
–Specialized applications for applicant
tracking, compensation, benefits,
attendance
•Redundant data
–No link to financial systems
•ERP
–Linked to financial systems
–“Best practices”

6. © Prentice Hall, 2005: Enterprise Resource Planning, 1
st
Edition by Mary Sumner 7-6
ERP HR Modules
•Components
–HR Management
•Personnel records
•Resumes
–Benefits administration
•Links employee data to actual benefits
•Allows selection from group of benefits
–Payroll
•Paychecks, tax reports, accounting data
–Time and labor management
–Employee/Manager self service
•Travel reimbursement
•Personnel data and benefits changes
•Training class

7. © Prentice Hall, 2005: Enterprise Resource Planning, 1
st
Edition by Mary Sumner 7-7
HR Modules
•Attributes
–Integration
–Common database
•Provide audit trails
–Scalable and flexible
–Drill-down capability
–Workflow management for electronic routing of
documents and other document management
–Process standardization
–Security
–User friendly and web-accessible

8. © Prentice Hall, 2005: Enterprise Resource Planning, 1
st
Edition by Mary Sumner 7-8

9. © Prentice Hall, 2005: Enterprise Resource Planning, 1
st
Edition by Mary Sumner 7-9
Management Control Modules
•HR information enables management of diverse workforce
•Supports managerial decision making through query and
reporting tools
•Operational level controls
–Maintain and update employee files
–Job analysis files
–Design files
–Regulatory files
–Skills inventory files
•Strategic level controls
–Human capital inventory for tracking employees
–Position control linked to budgeting
–Labor/management relationships
–Business intelligence tools for predicting trends
•Module integration is significant benefit

10. © Prentice Hall, 2005: Enterprise Resource Planning, 1
st
Edition by Mary Sumner 7-10
Featured Article: Keep Track of
Your Employees
•What are the benefits of automated
time and attendance records?
•What advantages might accrue to
employees using these systems?

11. © Prentice Hall, 2005: Enterprise Resource Planning, 1
st
Edition by Mary Sumner 7-11
Featured Article: Keep Track of
Your Employees, continued
•Employees’ attendance, time at work, and
skill levels
–Most companies uncertain
–If tracked, usually manual
–Records usually neglected
–Often piece-meal, no end-to-end solution
•Benefits of automating
–Eliminates manual process
•Time-consuming
•Error-prone
•Better analysis
•More control

12. © Prentice Hall, 2005: Enterprise Resource Planning, 1
st
Edition by Mary Sumner 7-12
Featured Article: Keep Track of
Your Employees, continued
•Banner Health
–Selected Kronos Inc. software
•Time- and labor-management
•Accessible from web, phone, badge terminals
•Information available in real-time
–Allows for quick staffing adjustments
•Financial benefits to employees, company
•Smurfit-Stone Container Corp
–Uses Workbrain Inc.’s ERM3, SAP financial
applications, and PeopleSoft payroll processing
•Web-based employee-relationship management
software
–Optimized scheduling and tracking of employees
–Interfaces with PeopleSoft applications

13. © Prentice Hall, 2005: Enterprise Resource Planning, 1
st
Edition by Mary Sumner 7-13
Summary
•ERP systems include HR modules that
offer records management, benefits
administration, and payroll
–Offer integrated operational and strategic
level controls
–Scalable and very flexible