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Selecting an HRIS Provider There comes a time when your organization’s current
stand-alone HRIS system becomes out of date. This realization
can occur in a number of ways. Perhaps it’s been a progressive
realization and you finally can’t take it anymore. Maybe
you tried to run payroll and the system irrevocably crashed.
Or maybe the HR department is on the verge of walking out
unless a serious overhaul is undertaken, and now! But, chances
are someone in your organization has witnessed firsthand the
benefits of an upgraded HR system, or another department needs
to integrate its data with HR and the current system just
won’t do the job. These are obvious reasons for selecting
a new HRIS system, but perhaps your company doesn’t even
know it could perform its HR duties more efficiently and is
therefore not looking. There are several very important reasons for regularly reviewing your current system with what is available in the software marketplace. First and foremost; cash, the bottom line. When is the last time anyone in your company has taken a hard look at the costs associated with your current HR software? How much time is spent maintaining personnel records, recording time, running and correcting payrolls, maintaining training and succession files, etc.? How much money and resources are being used to pull information from multiple databases or converting data in order to run reports? How many double and triple entries are being made just to preserve the integrity of multiple systems and databases? Chances are, more than you can imagine! These are just a few questions that probably aren’t being asked or answered. Now think of savings your company could attain if timely information was available throughout the entire organization. A real time integrated HR system could help you spot costly negative cash flows such as high-targeted turnover, high levels of absenteeism within certain business units, and low retention. Company-wide reporting through an integrated HRIS system can enable managers to proactively adjust policy to avoid these unwanted expenses. Tracking and managing employees’ training and development on a single system allows the company to internally promote and fill vacancies internally, further reducing recruitment expenses. By integrating external recruitment, position requirements can be matched with applicant qualifications, also reducing costs through decreased turnover. Downloading payroll results and other cash flows out of payroll into accounting can be automatic through an integrated system. This only a brief review of cost savings that can be achieved through an integrated HR system. Another severe limitation of separate systems for HR operations is the difficulty of administering corporate change. When there are several different HR systems comprising your company’s HRIS landscape, it is difficult to roll out new policy consistently across the entire organization. For example, your company decides to create a new training curriculum for its exempt employees. The HR department in Chicago, on a different training system than corporate in Boston, tweaks the specifications to better fit their training system. The corporate training coordinator cannot effectively administer this new policy because she can’t figure out the system in Chicago. Within three months, the two systems are completely different. Company-wide reporting?, forget about it. It is possible (and very common) for companies with several bolted-on HR systems to report out of common data warehouse. This is not an “ideal solution” to timely reporting. Maintaining data conversions is a very time-intensive process that is not very conducive to change. Reporting is usually not real time, as the data warehouse is refreshed once or twice a day at most. Adding on a separate system can also take a lot of time and money. With so many independent sources of information, company-wide reporting can be distorted or inaccurate. The true cost of inaccurate information is anyone’s guess.
When an organization chooses an HR system to implement, there are several barriers that influence decision-making, and can be counterproductive to the overall success of the implementation. In many instances, a company may lack the infrastructure within the HR department to take on the requirements of an HRIS system. Many HR software packages are paper driven and do not require high-speed processors or database space. Therefore the HR departments operate on outdated PCs because the necessity has never been created. The IT department has not previously budgeted many resources to support the HRIS systems. HR personnel haven’t been designated to support remote divisions and they have had little need to budget time for training remote users. Decision-makers also cringe when they are quoted licensing fees, consulting estimates, and other costs associated with an implementation. These factors lead to perhaps the most severe barrier to selecting the right HRIS system for your organization. Since their positions have previously required little knowledge or day to day interaction with technology, many HR administrators are poorly trained in general computer skills. HR has only recently become a technology driven business unit and previously trained HR administrators have never become comfortable with the technical side of their business. This usually results in one of two scenarios. First, there are the old guard of HR administration who fear the technology and resist changes that invariably come from new HRIS systems. Many of the benefits are never realized because the HR department resists taking the time or mental energy to fully learn the functionality of the system. Other HR personnel put forth an honest effort to learn new technology but lack the technical experience to grasp more complicated systems. Your company could have a fully integrated functional system but never reap the rewards. This often leads to the second scenario. Personnel from the IT department are brought into the HR department to administer the system. While their technical expertise can’t be questioned, they lack the training and experience in human resources to fully realize the benefits of the system. Either case results in a similar outcome; the system won’t be utilized to its potential. When selecting an HRIS system, executives and decision-makers take into account these personnel limitations and slant their decision likewise. There are of course methods to overcome these barriers. Before beginning the process of selecting an HRIS system, it is necessary to conduct a cost analysis of current processes. This will help to determine inefficiencies and time intensive activities built into the current HR system. These can be weighed against the capabilities of a new system and help to define clear-cut financial benefits of a new system. The cost analysis can also be used to benchmark the success of the new HRIS system. If the cost benefits added along with the opportunities for proactive HR policy-making outweigh the current system, this can be a strong argument to decision-makers in the selection of a new system. A lack in technical expertise of HR personnel shouldn’t
be a barrier to the selection process if certain measures
are taken. HR managers and administrators need to be involved
early on in the selection process. They are key resources
in identifying and acknowledging functionality offered in
HRIS systems which will lead to better administration of the
HR department. This also leads to increased buy in and ownership
from the primary users of the system. The IT department should
also take an inventory of technical skills to identify strengths
and weaknesses and work with managers to advise appropriate
training. Technically lacking employees can be designated
training depending on their initial skill sets. Community
colleges offer technical training courses to assist in learning
basic computer concepts and common software programs. Software
providers also offer specific training to help HR administrators
assimilate specific knowledge about their HRIS programs. Likewise,
IT personnel can attend training courses and subscribe to
professional institutions which will impart specific human
resources knowledge. Cross-training IT and HR personnel is
essential in the successful launch of a new HRIS system. Selecting an HRIS software can appear to be a relatively ambiguous process to decision-makers as the information is always favorably skewed from software vendors. By taking a few steps before interviewing software vendors, you can accurately obtain company-specific information. As mentioned earlier, it is essential to take a critical inventory of your current system to determine inefficiencies and specific expected benefits from a new system. Objectively interview software vendors to understand how the software can effectively reach your company’s expectations. Include HR administrators and managers in the process to increase buy-in and personal responsibility for the HRIS decision. Identify functionality gaps between expected benefits and actual software capabilities. What is the vendor’s response to these gaps? Do they partner with middleware providers to fully meet your specific needs? How often is the software upgraded to account for new functionality requirements? Answering these questions can help to provide a realistic outlook for a new HRIS system. Another method to accurately ascertain information about HRIS software is to get familiar with the user community. Many software providers hold user conferences to distribute information and get feedback about their product. Decision-makers and key personnel should attend these conferences to make contacts with current software customers. These contacts can provide invaluable information for a variety of different uses. Current users can give your company firsthand knowledge about costs, pitfalls and timeframes for implementation. They can provide the company with specific performance capabilities and strategies that will help your company utilize the software to its potential. They can also provide critical unbiased information about consulting firms and other implementation resources. In summary, there are several areas which your organization should question before selecting an HRIS system.  Benefits
Financial
aspects
Internal
Resources
There is always some degree of uncertainty when it comes
to selecting a provider for your HRIS system, but there are
ways to reduce this uncertainty. By identifying specific needs
of a new system, understanding the barriers to making the
best decision and taking measures overcome these barriers,
your company can better understand the process and reduce
this uncertainty.
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