HR has a data-sharing problem that won't go away. Despite the growing popularity of software "suites" that allow disparate HR systems to communicate, or new application programming interfaces (APIs) that enable connections between different talent management technologies, experts say HR still struggles to communicate the outputs of these systems in efficient and meaningful ways.
Why is this a concern? Because extracting actionable insights from workforce data—the kind that gets the attention of CEOs and CFOs and helps fund important HR initiatives—is only possible by correlating information from disparate systems.
Stacey Harris, vice president of research and analytics for Sierra-Cedar, a technical consulting firm in Atlanta, Ga., said one of the biggest reasons for the data-integration challenge is a lack of data "cleanliness" and the emergence of new data formats like unstructured or semi-structured data. It's a fundamental law of integration: A system is only as good as the raw data entering it.
"Organizations still struggle to obtain clean and accurate data from their input sources, especially if it includes human beings," she said. "And once they have the data, it is a mixed bag of data formats, which can be difficult to map and analyze without the newest database management and analytics tools on the market."
Michael Rochelle, chief strategy officer and principal human capital management analyst for the Brandon Hall Group in Delray Beach, Fla., agrees that many difficulties with effective integration can be traced back to the quality of source data.
"When you have inferior data scrubbing and data configuration in one system and it gets mixed in with disparate data sources in other systems, you end up with a hodgepodge of varying levels of data quality and script, which is hard to draw any reliable insights from," he said.
Keeping Integrations Connected
Another obstacle to effective and manageable data integration is the sheer number of data "touch points" between HR and non-HR systems, Harris said. The average number of such integrations is 18 per company, according to Sierra-Cedar's 2018-2019 HR Systems Survey. That number rises to an average of 31 integration points for organizations with over 5,000 employees and 75 integration touch points for companies with over 10,000 employees.
"HR data touches everything, and, to get the most from your HR data, you need to connect it to business data," Harris said, noting that the top two data integration points of HR with non-HR systems are finance and active directory applications. "We anticipate that, even with the adoption of more 'suite-based' HR applications, there will still be a growing number of HR integration points that need to be maintained."
Conducting that maintenance is no small matter, she said. For example, coded connections, data mapping and virtual links all need to be maintained every time an application is updated or upgraded—which can be four or more times per year with some cloud applications.
"That requires weeks of testing for every update in many organizations," Harris said.
While HR technology suites—which feature multiple systems from one vendor on the same platform—offer companies the benefits of consolidated data models and a common user interface, suites don't always meet all of an HR function's technology needs. Most who use suites still employ some form of standalone systems to fill those gaps—systems that require integration for data sharing and analytics.
"Our research shows organizations that implement cloud suites still end up sourcing 20 to 30 percent of their HR requirements and data from other solutions," said Ron Hanscome, research vice president specializing in HCM applications with research and advisory firm Gartner. Those standalone solutions tend to be in areas like workforce management, recruiting, and onboarding and learning, he said.
"The fact is most organizations will continue to have chunks of data that are outside of their suites for the foreseeable future," Hanscome said.
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APIs and Vendor Marketplaces
An encouraging development on the data-sharing front is the emergence of APIs that allow companies to connect disparate HR systems faster and easier. Les Rosen, founder and CEO of Employment Screening Resources, a background screening provider in Novato, Calif., said such APIs have created a "universal translator" scenario where more systems and service providers can work with each other seamlessly.
Rosen said this is the case with providers of applicant tracking systems (ATSs) and background screening services—vendors that have to exchange data on job candidates during the applicant screening process.
"Until recently, applicant tracking systems may have had only limited partners, so an employer was forced to use whatever vendors—such as background screening providers—their particular ATS chose to work with, instead of allowing each employer to pick a best-of-breed vendor for its needs," Rosen said.
He said that situation is changing with the advent of improved APIs and agreements that allow providers to work with any other provider.
Hanscome said the creation of vendor "marketplaces" also is making it easier for companies to connect disparate systems to one another to build custom HR technology ecosystems. These marketplaces are digital storefronts of sorts created by larger vendors that offer a collection of technology solutions that can connect with the vendor's core platforms.
ADP, for example, provides a one-stop shop of learning management, productivity, financial wellness tools and more that can connect to its core platform. The marketplace gives users single-sign-on access to various solutions, single data input and single billing options.
"These marketplaces facilitate easy linkage and standardized integration with partners and can have particular benefit to smaller companies that want to plug in solutions to the vendor's platform," Hanscome said. For example, if an HR function desired more than a basic learning module, it could plug in its own chosen learning partner rather than having to use what's available in a certain vendor's core system, he said.
Harris said that such vendor-managed marketplaces and open APIs have made integration efforts easier in terms of programming, but they don't always reduce the maintenance and management aspects of integration work.
"Companies still need to have a clear picture of where their data is being moved to and from, what vendors have maintained those connections and APIs, and how often they receive updates," Harris said.
HR also needs the ability to easily stop integrations or data flows if needed, she said. "That's particularly important in this day and age of data privacy standards such as [the European Union's General Data Protection Regulation.] For example, while an HRMS might be able to purge employees' personal data if requested, what about the myriad other data applications pulling information from that HRMS?"
Dave Zielinski is a freelance business writer and editor in Minneapolis.