Consequences of Open Standards for HR Solution Strategies

Integration is the systematic tying together of separate enterprise applications. Considerable work may be required for two enterprise applications to be integrated successfully. The software and data have to be made to mesh without any slippage or miscommunication. Accomplishing this requires an agreement about how the transaction or data exchange will be accomplished. Open Standards An “open” standard is an industry blueprint meant to ensure that competing products work together. An open standard is a published standard that is possessed by no one and used by all. Anyone can inspect, criticize, or suggest enhancements to an open standard, and any changes must be made by consensus. As more companies adopt an open industry standard, the easier it becomes for them to communicate, without the need for costly customized data interchanges. A proprietary standard, on the other hand, is typically owned by a corporation. Its internals cannot be inspected; its users must license it; and the owner of the standard can change it at will. In the past, companies that purchased enterprise software systems submitted to the data standard of that system for all its functions. Although companies were not in reality “locked in,” data exchange or migration was cumbersome and costly. Software solution assessment unfortunately became an extension of status quo solutions, instead of a true evaluation to identify the best solution available on the market. XML XML (eXtensible Markup Language) is a language that can be used to develop open standards. XML is a flexible way to define information formats, so that two information systems can share the data in a common, consistent way. XML allows a company to define a common language for the exchange of data between two systems, regardless of how the data is structured internally in each system. HR-XML HR-XML is an effort by a group of vendors and service providers to formulate an open standard for data communication between companies, to be adopted by the whole of the HR community. The mission of the HR-XML Consortium is to spare employers and vendors the risk and expense of having to negotiate and agree upon data interchange mechanisms on an ad-hoc basis. By developing and publishing open data exchange standards based on XML, the Consortium provides the means for any company to transact with other companies without having to establish, engineer, and implement many separate interchange mechanisms. The HR-XML initiative (www.hr-xml.org) is working towards an HR-specific vocabulary for the exchange of information between different human capital management systems (see my previous article detailing HR-XML). By developing an open standard based on XML, the HR-XML initiative will enable companies to move critical HR data without having to engineer costly and time-consuming ad-hoc interchange mechanisms. The emphasis in human capital management is shifting towards viewing HR processes as part of a supply-chain, linked together electronically. HR-XML increases the efficiency of information flow up and down this HR supply-chain. Integration A staffing management system does not function in isolation. For true end-to-end functionality, a staffing management system integrates with other Human Resource Information Systems (HRIS). Data gathered on new hires in the recruiting process flows into the employee system, handled by conventional HRIS applications such as Peoplesoft or SAP. Open Choices Open standards, such as HR-XML, enable different software systems to share data with relative ease. Data migration no longer needs to be the key driver for decisions on system choices. Single vendor solutions no longer keep their corporate customers tied to them because of trepidation about proprietary data formats, data transfer, and integration. The viable options for HR system choices include modules from large HRIS vendors alongside specialized offerings from best-of-breed solution providers. The true decision can then be made on benefits coming from functionalities and not from fear of heterogeneous dataflow. The keys to success in the future are universally agreed-upon standards such as HR-XML to increase the speed and reliability of integration. HR departments are free to choose expert solutions that best meets their needs and align with their corporate goals and vision, unencumbered by concerns about data integrity and integration into broad enterprise-wide systems.

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Alice Snell is vice president of Taleo Research. The specialty research practice analyzes the best practices and economics of talent management. Taleo Research focuses on critical issues and key trends in talent management that impact organizational performance. Taleo Research is the strategic research division of Taleo, which provides on demand talent management solutions for organizations of all sizes, worldwide.

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