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The ROI of ROI: Can you link your HCM solution to your ERP system?

November 29, 2016

Marcus Mossberger, Human Capital Management Strategy Director, Healthcare

If you ask most healthcare leaders, “What is your most valuable asset”? most will give you the politically correct answer that it is their people. After all, few industries are more dependent on their people providing a high level of service than healthcare. And in most of these organizations, labor costs are the largest budget line item.

But the reality is these same leaders are also tasked with being good stewards of the organization’s finances, as well as the substantial investments made in the physical assets used to deliver quality care (think expensive robotic surgical tools and MRI machines). Appropriately balancing investments in people, technology and physical assets can be the key to profitability, and is taking on added importance in the new healthcare landscape of incorporating patient-centric focus across the value chain. So how does your Human Capital Management (HCM) system fit into your larger Enterprise Resource Planning (ERP) strategy?

The key is in the term “resource.” Whether we are talking about human resources, financial assets, or fixed and mobile assets--the goal of every organization is to optimize their utilization to meet the Triple Aim of addressing cost, quality and outcomes. Simply focusing on one of these will inevitably lead to an imbalance–hence the need for a strong ERP platform to provide visibility across all of them.

To simplify this to the most basic elements, the main goal of healthcare leadership is to influence human behavior in a way that maximizes the dollars spent, ensures compliance with resource utilization and creates a positive culture for their people (all of which should lead to better patient outcomes). As an HR practitioner I will argue that the foundation for all of this is a strong HCM platform (I am admittedly biased), but that alone is not enough. These same leaders need visibility into how budgets are created and maintained, and how the people in their organization are following appropriate supply chain protocols (which should be captured in performance management systems). This is where the true value of an integrated ERP platform comes into play.

The most important benefit can be summarized in one word: data. Gone are the days of setting a budget at the beginning of the year and never revisiting it. Healthcare organizations need access to real-time data from HR, finance and supply chain in order to flex to the constantly changing environment. This “Resource Optimization Intelligence” (ROI) gives them the ability to make evidence-based decisions about the way they organize, deploy and track all of their resources. It also allows them to compare data sets to understand where there may be a correlation between a new training protocol and compliance with procurement standards.

The largest challenge we see in the development of an integrated ERP strategy is the need for collaboration across the C-suite. It is basic human nature to support our own personal agenda… but if the CHRO, CFO and CSCO can align their strategies around this idea of resource optimization intelligence, the ROI can be substantial.

Are you gaining ROI with your own version of ROI? Please share your thoughts and ideas here.

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