Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of PICPA officers or members. The information contained in herein does not constitute accounting, legal, or professional advice. For professional advice, please engage or consult a qualified professional.

Integration of Human Resource Information Systems: The Last Leg of Finance’s Digital Transformation

Gretchen NasoBy Gretchen Naso, CVA, MBA

Digital transformation is at the heart of the modern finance function. Characterized by an intentional strategy to reduce operational complexity, streamline processes, and optimize the use of technology, the modern finance function is well-equipped to support a growing, dynamic business.  

Most often, digital transformation efforts in the finance function focus on core processes, including procure-to-pay, order-to-cash, and record-to-report. Payroll is often outsourced or a human resource information system (HRIS) is used, but mostly in a siloed fashion. As technology evolves and becomes further integrated, however, opportunities will exist to extend the digital transformation to other business functions, including human resources.  

Reviewing employee candidates onlineAn HRIS manages and automates core HR processes. These systems have existed for over 60 years, and most small to midsize businesses use some HR technology. The shift to cloud-based platforms over the past several years is a game changer! Cloud-based technology lowers costs, increases scalability, and enables a level of intelligent automation and integration that were previously either very costly or practically impossible. The integration of HRIS with financial management systems provides opportunities for end-to-end digital transformation of the HR and finance functions.  

A robust integration between HRIS and financial management systems alleviates back-office inefficiencies in both finance and HR. Streamlined processes, elimination of data duplication and manual entry, improved processing speed, and reduced errors are all possible with integration. Advanced reporting replaces spreadsheets and manual compilation/upload of data into disconnected systems, evolving from historical lookbacks with an emphasis on finances to gaining actionable insights and analytics based on unified data that combines payroll, personnel, and financial data. Finance and HR teams can share real-time data, enabling proactive problem-solving and driving better decision-making.

The improved productivity is not insignificant. Streamlining the manual and duplicate tasks inherent in many HR tasks, including payroll, can save up to 550 hours per year in administrative time alone. Cost reduction isn’t the only organizational outcome; culture can also be positively affected. Back-office teams will develop new, collaborative ways of working together, and the employee experience is enhanced.

So, how challenging is this last leg of financial transformation? Organizations that have already mastered an evolution in their core finance functions will find that the roadblocks to a successful HRIS integration are not new. They can be formidable, though, and must be overcome to achieve success. Once the organization has identified its needs, evaluated the technology, and selected a solution, it may face resistance to change, competing priorities, and lack of advanced skills. Training and reskilling must be a top priority to address automation-related skill gaps.  

Gretchen Naso, CVA, MBA, is president of RKL Virtual Management Solutions, a fully-owned subsidiary of RKL LLP dedicated to helping organizations optimize, streamline, and manage their accounting, financial management, and workforce functions. She can be reached at ggnaso@rklvirtual.com.

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Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of the PICPA's officers or members. The information contained herein does not constitute accounting, legal, or professional advice. For actionable advice, you must engage or consult with a qualified professional.

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