5 Inefficiencies With Legacy Workforce Management Software
As we mentioned in our previous post, 2 Ways to Spot “Cloud Silos” many businesses rely on total workforce management data housed with separate payroll, employee benefits, HR, and time & labor silos, sourced by a range of different business software products that don’t always play nice together.
Working in human capital management solutions since 2002, here are 5 labor and cost efficiency problems I’ve seen businesses face with siloed software information in their total workforce management solution.
Problem 1: They’re not conducive to integration.
Although software silos are physically disconnected, they’re also mutually dependent because each is part of a bigger structure: your business. Ideally, you’d prefer a solution with enough flexibility to integrate new applications with the old (and future ones, as well). However, siloed workforce management software does not always work well with other siloed programs.
That being said, many organizations today are struggling with a legacy payroll system which stands alone from their HR database or employee benefits administration software. Each application being implemented years apart from one another from separate vendors, who utilized different software language. In some of the most extreme cases, I’ve seen companies utilizing a DOS based payroll platform, with a windows based HR application, and attempt to integrate the two. With countless manual steps and separate executable files they were able to make sure that one employee’s name change was updated throughout the different systems. Now multiply that times the number of changes every payroll cycle and you’ve got money and resources going down the drain with increased labor costs.
Problem 2: They’re not greater than the sum of their parts. 
A siloed workforce management system is essentially a patchwork of individual tools. The applications try to work together by sharing data across applications, and each contributes to the performance of the system as a whole. So, if each of your tools is imperfect or ineffective, the overall system suffers as a result. The old analogy, “Your only as strong as your weakest link” truly comes into play with sharing data across siloed applications.
Problem 3: They’re resource hogs.
Most companies operate with limited budgets (who isn’t nowadays?), which makes inordinate expense of the silo approach significantly less appealing. In order to implement smart strategies that harvest tangible results, you first need to gather information from multiple data sources and aggregate the data into a useful report or upload file before you can analyze results.
Consider the new IRS Affordable Care Act (ACA) reporting requirements for businesses (see our upcoming Benetech ACA webinars). With disjointed silo’s an organization will need to pull, parts and pieces from their separate databases to gather all required ACA data. This manual process can create further problems with incidental clerical errors triggering costly ACA administrative penalties. Current IRS regulations state that there is $100 penalty per reporting failure or filing error to a maximum of $1.5 Million.
Related Blog: How the ACA is Impacting Company Budgets in 2015
Problem 4: They foster poor planning and short term Workforce Management fixes.
The silo approach more closely parallels a break/fix model than a sustainable and scalable long-term solution. Employers tend to invest in new software as their existing tools cease to work effectively, with little thought to what they’ll need after hiring 10 more employees and a benefits specialist. This reactionary approach creates a workforce management system that grows inefficient over time with the introduction of further patchwork and siloed solutions.
Problem 5: They suppress collaboration and silo your HR department.
To make the best decisions for your business, you need to champion a collaborative environment. The HR department is not excused. Payroll and benefits mangers have had to shuffle data between one another since well before the ACA. Aligning your workforce management applications will foster collaboration between your HR department professionals and help you ascertain and minimize your total cost of ownership per employee.
