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Role of ERP Systems in Improving Human Resources Management Processes REVIEW OF INTERNATIONAL GEOGRAPHICAL EDUCATION ISSN: 2146-0353 ● © RIGEO ● 11(4), WINTER, 2021 www.rigeo.org Research Article Role of ERP Systems in Improving Human Resources Management Processes Faeq Hamad Abed Alhalboosi1 Suha Jamal Mawlood2 College of Administration& Economics / Baghdad College of Administration& Economics / Baghdad University/Iraq University/Iraq [email protected] Imad Ali Mahmood Al-halboosi3 College of Administration& Economics / Baghdad University/Iraq Abstract This study investigates the role of Enterprise Resources Planning (ERP) systems in improving human resources management (HRM) processes. The rapid environmental changes led to increased demand on the ERP systems, which have changed the manual effort to technology-based processes, providing solutions focusing on the integration of all departments to achieve goals for the entire organization. HRM processes are mainly made up of two classes: strategic and operational HRM. An ERP system works to integrate both of them, making HRM processes more efficient, effective and feasible to provide support to the organization as a whole (inside and outside). In this article, a modest framework is proposed to describe HRM process integrity in relation to ERP systems based on a comprehensive literature review at the intersection of HRM processes and ERP. The study highlights the role and importance of ERP systems integrity in managing the HRM processes. Keywords ERP system, HRM processes integrity. To cite this article: Alhalboosi, F, H Y.; Mawlood, S,J.; and Mahmood Al-halboosi, I, A. (2021) Role of ERP Systems in Improving Human Resources Management Processes, Review of International Geographical Education (RIGEO), 11(4), 1667-1681. doi: 10.48047/rigeo.11.04.155 Submitted: 09-03-2021 ● Revised: 06-05-2021 ● Accepted: 14-05-2021 © RIGEO ● Review of International Geographical Education 11(4), WINTER, 2021 Introduction Nowadays, the organizations live with rapid environmental changes. They need to shorten the time and speed to meet the requirements of their customers. To face that, manual efforts are not enough, and technology can be used as an enabler to increase the business performance, since it can provide improvements in both efficiency and effectiveness (Kimani 2013). Organizations are trying to use information systems to handle the problems of all areas in the workplace (Almgren and Bach 2014). Thus, the usage of software implementation such as Enterprise Resource Planning (ERP) systems rapidly grew in companies (O’Leary and 1999; Jayawickrama and Yapa 2012) since they assume an important role in providing solutions and coordinating between departments in order to obtain smooth business processes and to achieve the company-wide goals. Bansal and Narula (2014) emphasize that ERPs provide support for all variations of practices in business, with a view towards enhancing productivity. These systems automate the manual effort, and result in most of the business processes to be changed right away. According to Hoch and Dulebohn (2013), the flow of information across the core functional areas in the organization (Finance, HR, manufacturing, customer relationship, supply chain management, etc.) and the flow of information among the stakeholders can be integrated with the ERP systems.This study is an effort to reveal the role of ERP systems to improve human resources management (HRM) processes. HR workflows and HR departments constitute an essential part of the organization, and they work with multiple functions (policies, practices, and activities) within the organizations. Therefore, ERP system is used by HRM units to make their decisions more efficient, effective and feasible to provide support to the organization as a whole (within and out). Therefore, to achieve that integrity, there are various ERP software tools providing HR solutions, and the most commonly used ones in HRM area are OrangeHRM, Oracle/PeopleSoft, Lawson HRM, and SAP (Michael et al. 2015).The article is organized as follows: The literature review can be seen in Section 2 which contains three sub-sections: ERP system, HRM processes, and major ERP tools for HRM. In this section, ERP concept will be discussed, the concept of HRM processes will be explained briefly and the major ERP tools for HRM will be covered. Then, in section 3, utilization of ERP systems in improving HRM processes will be discussed, and a framework is offered. Finally, conclusions are provided in section 4. Literature Review In this section, a comprehensive literature review is performed at the intersection of ERP and HRM. The study included 59 different research items from major journals, Procedia and others to provide a broad perspective, explaining the role, relationship and importance of ERP systems in HRM processes. These research items have been classified as follows: 39 researches from journals, while 2 researches are relevant with Procedia, and 18 researches are related with social networking, books, thesis and archives. This classification is depicted in Appendix 1. ERP systems, HRM processes and major ERP tools for HRM are discussed based on this core set of different research items. Enterprise Resource Planning (ERP) Systems An Enterprise Resource Planning (ERP) system is an integrated computer application software utilized to effectively handle the whole set of resources and processes in an organization (Bighrissen et al., 2012). Cotran et al. (2005) explain that all functional departments and processes, including warehousing, manufacturing and distribution, accounting, marketing, HR and strategic management are integrated into one system (ERP). ERP system promotes and automates business processes operations (Motalab and Shohag 2011; Hurbean 2008). Indeed, various improvements are triggered by integrated ERP implementation as jobs become broader, and organizational boundaries begin to blur. All users can have access to all information since the authority moves to the front-line, and processes become visible and become standardized, users from multiple levels gain access to all relevant and required information (Hurbean 2008).ERP is an advanced system which provides the integration of transactions-oriented data and business functions, and it is well- proven to significantly improve the organizational performance and help the organization to build competitive advantage (Abdoulmohammad et al. 2011). Thus, this system focuses on integration tasks for all department into achieving goals for the organization (Hossain et al. 2002; Cotran et al. 1668 Alhalboosi,F, H Y.; Mawlood, S,J.; and Mahmood Al-halboosi, I, A. (2021) Role of ERP Systems in Improving H….. 2005; Dery and Wailes 2005; Tadinen 2005; Jackson 2010; Abdoulmohammad et al. 2011; Hoch and Dulebohn 2013). As depicted in Figure 1, ERP systems are used to integrate all processes of functions regarding in the enterprise. Front-office Back-office C Corporate S o reporting u s Financial p t p u Sales and l i m Central Manufacturing e database e r r Service s s Inventory HRM Figure 1- Integration of all processes with ERP systems (Source: Hossain et al., 2002). The main aim of implementing an ERP system is to manage and orchestrate all resources, information, and business processes from common data repositories (Devos et al. 2017). As can be seen in Table 2, an ERP system provides integrated platform to support variety of business functions (Sumner, 2014). With an ERP system; information systems can be integrated, coordination across business functions is supported, data is integrated with the same meaning across multiple functions, maintenance can become uniform and integrated, common interfaces across systems can be used, consistent and real-time information can be gotten across partners, client-server model is used, smooth and integrated business processes can be used consistently and integrated applications can be used. Table 2: Business Systems Before and After ERP System Implementations (Source: Sumner, 2014). Before ERP After ERP Information Stand-alone systems Integrated systems systems Coordination Lack of coordination among business Supports coordination across functions business functions Databases Disintegrated data with inconsistent Integrated data with the same definitions meaning across multiple functions Maintenance Maintenance systems which are Uniform and integrated maintenance piecemeal, inconsistent and costly costly to maintain separate legacy systems Interfaces Difficulties in ensuring interfaces across Common interfaces across systems systems Information Inconsistencies and redundancies in Consistent and real-time information information across partners System May not be state of the art Based on a client-server model architecture Processes Incompatible processes Consistent, smooth and integrated business processes Applications Isolated applications Commonly used and integrated applications There are many benefits of ERP systems usage in an organization. Main benefits of an ERP system 1669 © RIGEO ● Review of International Geographical Education 11(4), WINTER, 2021 can summarized as it (Ahmed et al. 2003; Tambovcevs and Tambovceva 2013; Suhaimi et al. 2016); Increases organizational performance by streamlining, reengineering and controlling the major business processes. Reduces cost and time for all processes in the organization, increasing their efficiency. Avoids manual effort and provides transactional systems, operating quality management system. Provides flexibility and efficiency in planning, allocation and control. Reduces
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