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Are you preparing to embark on an Human Resources Information System (HRIS) implementation? Get your ducks in a row for the effort ahead, and make the implementation as smooth as possible. Taking the following measures can greatly increase your chances of success.
1. Senior Management Support
Senior management’s interest and enthusiasm about the HRIS shows that they value the benefits that will be reaped from the HRIS. Since senior management set corporate direction, and an HRIS can assist HR in aligning with those objectives, their support for the implementation will likely be related to this alignment in some way. It may be important in your organization to ensure this level of support in order to garner some of the success factors listed below.
2. Involvement of Stakeholders
Involve all stakeholders early in the implementation process to assist in defining the requirements and desired outputs, such as reporting and interfaces. Depending on the size of your organization, Payroll, IT, Finance, Training, Recruiting, and Benefits may be potential stakeholders. Early in the implementation process, identify who the key stakeholders are and encourage their participation. Implementation of an HRIS implies change to existing processes, and early involvement of stakeholders serves to heighten their buy-in to the HRIS, cooperation and acceptance of that change.
3. Risk Assessment
There are potential and unanticipated roadblocks in organizations that can pose a risk to the successful implementation of an HRIS. For example, are there pockets within your organization that are resistant to change? Are there any corporate initiatives that will conflict with the timing of the HRIS implementation and would compete for your effort, or reduce stakeholder availability? A risk assessment will identify these risks and outline how they will be managed or overcome. It is far better to have identified the risks upfront and have a plan for dealing with them, than to be doing so in the midst of an implementation. Senior management support may be necessary, depending on the nature of the plan that is developed to mitigate identified risks.
4. Time Budgeted for the Implementation
A significant amount of effort is involved in migrating from an existing solution to a new HRIS. You will be involved in designing the HRIS, learning the new software and testing. The effort that you devote to being involved in the implementation will make the go-live seamless and ensure that you get the most value from the HRIS. Senior management support is essential, especially if redistribution of day-to-day HR responsibilities is required at certain stages during the implementation timeframe. Keep in mind that a fully-implemented HRIS will likely eliminate some of those time-consuming day-to-day manual activities, and so it is a matter of getting over that “hump”. Rather than allowing this competition for your time to prevent you from devoting effort to the HRIS implementation, identify it as a potential risk (see above) early in the project so that a plan can be developed to address the conflict.
5. Job Analysis
Conduct a job analysis. Jobs need to be defined, along with the talent requirements, valuations, and salary guidelines. Once connections have been made between positions (to which you assign employees and for which budgeting is done) and these categorized jobs, it will be possible to fully utilize position management functionality in your HRIS, for objectives such as filling vacancies effectively, compensation planning and succession planning. If you need assistance with conducting a job analysis, it is helpful to retain HR consulting services to complete this step prior to the implementation.
6. Implementation Methodology
A structured approach to the implementation identifies key components that will act as building blocks to success. Many different recognized implementation methodologies exist. What is important is that you adopt one, and that it is suitable to your organization. Your software vendor will also have a preferred approach. An implementation methodology is different from a project plan, which incorporates those methodology components into a series of ordered milestones with deadlines. An implementation methodology provides content to the project plan, and the project plan delivers the methodology. Adopting an implementation methodology is a thorough approach and provides for stepping back to plan at a high level prior to delving into task completion – doing so contributes to success by preventing rework, encouraging process re-engineering, and getting to the real requirements.
7. Business Process Overview (“BPO”)
A BPO involves mapping data sources, procedures and interfaces with other software. Usually the future state with the HRIS implemented will be quite different from the current state – for example, passing of data between the HRIS and other software may now be possible electronically rather than manually, or redundant data stores may be eliminated causing procedures to change. The BPO provides a vision of the future state and acts as a guiding light throughout the implementation, to keep your team focused on the desired outcomes. Do this early in the implementation as a means of involving all stakeholders, promoting the teamwork that will be required for sharing a database, flushing out all high-level requirements, establishing a common vision, and promoting acceptance of change.
8. Clearly Defined Requirements
Requirements are as unique as the organizations that have them because HR strategies align with corporate strategies, and corporate strategies are unique. Document your requirements concisely, and include reporting needs in this step. This will help to ensure that the HRIS is configured to allow for the tracking of any data that will be required to meet reporting needs. Definition of requirements is a level deeper in detail than a BPO, and equally important.
9. Understanding of Data
An HRIS is data intensive. It is important to understand, prior to an implementation, where all existing HR data is being maintained, so that it can best be determined how that same data will be tracked in the new HRIS, and how data will be converted into the new HRIS from (potentially several) current sources. HRIS value will be optimized when population of data is planned, and data is transformed into information. This begins with an understanding of the data.
. Openness to change
Embracing the change involved in an implementation in part relies on confidence in the product to meet the needs of your team, which can be addressed through the definition of requirements and the BPO. Preparedness for change opens the doors of thinking to creative solutions and reporting possibilities, which can actually increase the success of an implementation beyond original expectations. Promote openness to change throughout the steps identified above.
An HRIS implementation is a large project that can be broken down into smaller parts, to tackle one step at a time. Many of the success factors identified above are focused on establishing preparedness and developing an implementation plan that includes certain aspects. This will go a long way to ensuring the success of the implementation.
Senior Management Support
Involvement of Stakeholders
Risk Assessment
Time Budgeted for the Implementation
Job Analysis
Implementation Methodology
Business Process Overview (“BPO”)
Clearly Defined Requirements
Understanding of Data
Openness to change
Functionality
Security
Implementation
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The process that follows has 18 discrete steps. Software selection is invariably a more complex process than we originally estimate and one with long term consequences for an organization. It requires a careful and thoughtful approach to fully address the issues and impacts related to your decisions. Some steps may be combined or performed concurrently, but the authors strongly believe that human resource professionals will optimize their selections by following the process as presented.
Step 1: TeamworkCongratulations. You've been selected to head up the project to select a new software package for your human resources department. Where do you begin? Most organizations start by forming a team to manage the software selection process and we strongly recommend that you form a 3 to 7 person team to oversee your selection. There are a myriad of issues to consider and software selection is definitely one area where the quality of the decision is improved by having several people involved in the evaluation and decision making process. Who do you include on the team? Look at who the key users and stakeholders will be for the new application. Include a knowledgeable member of your Information Technology staff from the very beginning and make sure that you have appropriate management representation so that as costs are developed, you will not find yourself in a situation of delivering "surprising" news at the end of the evaluation process. Larger organizations may also have a "Steering Committee" separate from the project team. Steering committees typically consist of the decisions makers - management who will sign off on the costs, participate in contract negotiations, support the project team and provide visible top level support.
Step 2: GoalsAt your initial team meeting(s) begin by identifying and agreeing on the goals for the project. Without a set of fully developed goals at the beginning of your search, you will either waste significant time evaluating the wrong products, or, even worse, select the wrong software. Ask the team to fully answer the following questions:
Identifying goals may include interviewing senior management, others in HR and clients to identify the "right" needs for your organization.
Step 3: Big PictureOnce your goals are developed, take a step back and ask how they fit into the bigger picture of your overall human resource information system. If you are looking for a specialized application such as applicant tracking or COBRA management, make sure that you consider how it will need to integrate with other applications such as your main HRIS. Are you trying to solve only one problem when you have other software issues to address that should be considered at this time? If you're selecting a new HRIS, does it cover all of specialized needs you have such as COBRA and HIPAA compliance or training records management? How does this application fit with your HR IT strategy?
Step 4: Future NeedsAsk what your information system needs will be in the next few years. What other applications will be needed? When will you need them? Will they share the same information needs as this application, i.e. employee ID, SSN, date of birth, name, address, etc? If so, how will you prevent having to enter the same data into different applications in future years? Are you planning to move to web based applications and if so, is this the time to begin moving in that direction? Are any major business processes going to change either as a result of this selection or in the near future? Where do issues like employee self service and manager self service fit into your overall strategy?
Step 5: Technical EnvironmentIt is absolutely critical that you define the base technical environment for the new application before you begin to look at any specific products. This is an area where your Information Technology representative plays a key role. The questions that need to be answered include: what type of application are you looking for, stand alone PC, networked client/server, or mainframe. What operating system does it need to run on -- Windows NT, UNIX, etc.? If it's a database application, what database does your company support, SQL, Oracle, DB2? How will it connect to remote offices? Does it need to be web deployable? Does it make a difference what language the application is programmed in such as C++ or Visual Basic? Is your IT department planning a major change in technology platforms in the next year?
Step 6: BudgetBudgets can be hard to define before you speak with any vendors but you need to at least define some ballpark estimate of what your organization is willing to pay before you start talking to vendors. A key item to keep in mind during budget definition is to separate your costs into three areas: software, hardware and implementation. Software includes the actual software licensing fee and other software costs for items such as database licenses and annual maintenance costs. Hardware is what you will need to spend for servers, PCs, and network upgrades. Finally, implementation costs encompass the money you will spend for configuring the software, training, and data conversion including the possible need to hire consulting services from the vendor or third party consulting firm to help in implementation.
Step 7: SpecsNow that you've completed the first 6 steps, you're ready to develop a written specification document for your new software package. The specification should begin with your overall HR IT strategy, list your project goal, define the base system functionality that you require, specify how it needs to integrate with other systems, and list the technical requirements developed in step 5. This is a key deliverable for the overall project. If your specification is clear, specific and well defined, your selection process will be relatively painless. However, if you remain unclear on goals, functionality or the technical environment, then you're not ready to move forward.
Step 8: Build vs. BuyAt some point during the process, most organizations address the issue of whether they want to develop the application internally or purchase commercially available software. This issue may be considered as early as step 2 or 3 and as late as step 15 or 16. We don't think it should come any later than step 8 because it is typically both an emotional and confusing debate and one that can sidetrack your process indefinitely. Many organizations have successfully developed their own human resource software. Many more have been less than successful in such efforts. When the issue arises in your process, ask the following questions:
Finally, if your Information Technology staff develops any preliminary budgets or schedules for doing the job internally, experience says that you should double both and you will have a more realistic estimate to compare against the commercial products.
Step 9: ResearchNow you're ready to start identifying vendors and products that could meet your needs. How do you locate information on vendors and products? The obvious starting point is to talk to your colleagues in other companies for recommendations on products they have used that fit your general needs. Another source is the internet. Here are four websites that have extensive vendor/product lists: www.shrm.org/buyers/hris.htm, www.ihrim.org/market/onlineguide/, www.workindex.com, and www.benefitslink.com/software.shtml. IHRIM also produces a reference booklet for their members "IT_Matrix, Integrated HR Applications". It can be purchased from HRMS Directions at 1-905-843-0330 or www.hrmsdirections.com. The annual SHRM and IHRIM conferences and most state HR conferences also include vendor exhibits where you can talk with a variety of software vendors.
Step 10: LiteratureHopefully your research has generated a good list of potential vendors. The next step is to contact each and get some product literature. Vendors supply different levels of information in their brochures, some are very high level without much detail, and other pieces are more informative. Make sure that you specifically ask for literature containing the level of detail you need. This is a key step in the process and should not be skipped because it should reduce your potential vendor list to a manageable number. Some vendors will drop out when you call for literature and you find out their product isn't available to fit your technical platform, or it really doesn't meet your needs. You will eliminate some after reviewing their literature and determining that the product is not as close a match with your technical specifications as others. One note of caution about this step, many vendors will want to schedule meetings when you contact them for literature. Don't meet with vendors yet, you're not ready. Limit them to sending you as much information as they can, and let them know that you'll contact them if you have further interest.
Step 11: RFPNow you're ready to develop and send a request for proposal (RFP) to your smaller list of target vendors. RFP's can be one page in length or ten or more. You will need to decide how much detail you want prior to seeing product demonstrations. Smaller companies may want to use a simplified 1 or 2 page request for information (RFI) that requests less information and has more flexible response guidelines in order to expedite this stage. Larger companies and those in the public sector most typically will use a formal RFP process. The most common elements in an HRIS request for proposal include:
Once you have assembled your RFP, send it to your vendor contacts and give them a reasonable period of time to respond, typically 3 to 6 weeks. Some vendors will supply you with a "sample" RFP if you request one, which you can then modify for your specific system needs. The RFP needs to contain guidelines for the vendor response such as:
Always be aware of your "special needs" and the extra money and effort it will cost for implementation and future support. Work hard to modify your internal processes to match the software before embarking on customization.
Step 12: EvaluateAs the RFP's are returned, you will want to have a common basis for evaluating all of the proposals. A typical approach is to create a spreadsheet with all of the items in the RFP as your column headings and the vendors listed on the rows. Then you would assign a value to each RFP item (yes/no, a dollar value, or a numerical ranking of some type) for each vendor. Once you have received all of the proposals and entered the data on your spreadsheet, then the team can meet, review the evaluations and select the vendors they want to schedule for product demonstrations.
Step 13: DemosSoftware product demonstrations, by their very nature, are designed to showcase the best attributes of the product and downplay the limitations. You can and should control product demonstrations to try and get as accurate and unbiased information as you can from what is clearly a major sales event for the vendor. How do you control the product demonstration? You control the demonstration by modifying the vendor's agenda. All software vendors have standard product demonstrations -- don't accept the standard demonstration. By this point in the process, you should have a strong grasp of your needs and issues. Create a list of specific questions/trends for the demonstration that focus on your issues and concerns and provide it to the vendor in advance of the meeting. In this way the vendor can include your issues as part of their overall demonstration and you should get a more unbiased look at the product. All of your team members should be involved in the demonstration and the team should agree in advance on specific issues that each member will ensure are addressed during the demonstration.
Step 14: Evaluate AgainAfter you have completed your initial product demonstrations, it's time for the team to meet and evaluate the products based on all of the information you have at that point. Have each team member list the likes, dislikes, concerns, and unresolved questions that they have concerning each product. You may need to have one or more vendors provide some additional information before you move forward. You also need to be concerned about pricing differences at this point in the process. However, do not assume that you have the "final" price from each vendor. As the vendors learn more about your specific needs, they may be in a position to refine the pricing submitted with their RFP. Finally, narrow your vendor list to 2 or no more than 3 vendors. Invite those remaining vendors back for a second product demonstration.
Step 15: Decision PointsYou've seen all the products once and have the preliminary pricing proposals. It's time for the team to start discussing the items that will drive your final decision. In most software selections price is one of, but not the only, selection criteria. Other obvious decision points may include differences in functionality and compatibility with existing systems. For many companies, implementation costs and timeframes are critical decision points. One word of caution, be certain that your management team representative is heavily involved during this discussion as the team needs to be very sensitive to the items that will influence the eventual approval or disapproval of their recommendation.
Step 16: Check ReferencesNow it's time to start checking references on your finalists. Your team should develop a list of questions that they would like answered by each reference. Questions should cover any areas of concern that you have with the product, product functionality, implementation, problems the reference has encountered and ongoing support. Make sure that you understand the technical environment of each reference, i.e. Windows NT, Unix, AS/400, etc so that you can identify issues that may or may not apply to your situation. Listen carefully to what is said and not said by the reference. If you can get references in the same geographic area in which you work, try and visit the reference's business to see the product in action and talk to the actual users. It is best to check all of the references before the second demonstration so that issues that come up during this process can be addressed at the time of the next demonstration.
Step 17: Demo AgainAs with the first demonstration, set the agenda. The team will have specific items that they want to see again or need to have clarified. These items should form the basis of your second demonstration. Make sure that your management team representative is present at this demo. Your IT representative should ensure that all technical issues are resolved at this time. Review core functionality, reporting, processing time, implementation schedule and costs, customer support, issues raised in the reference checking process and any specific concerns of the team. You should also review each item in the pricing of the product with the vendor's sales representative. If you have any concerns about the pricing portion of vendor's proposal, now is the time to express them so that the vendor has a chance to clarify this critical issue before you make your decision. If you do not get everything resolved to your satisfaction during the second round of demonstrations, do not be afraid to bring one or more of the vendors back for a third demonstration.
Step 18: Evaluate Again and SelectThe demonstrations are finished, all the questions have been answered, it's time to make a selection. Before everyone decides to vote, take a step back and evaluate the information you learned in the second round of product demonstrations. Compare what you've learned to your initial goals and product specifications. Create a matrix of how each product evaluates against your decision points. If you've done a thorough job of learning the strengths and weaknesses of each product, established clear goals and product specifications and you've been aligned as team from goal setting through final demonstrations, then you should have an easy time reaching consensus on a product recommendation. In some situations, you will have two systems that meet your needs. In that situation, begin contract negotiations with both companies and work on negotiating the best package for your company - software price, training credits, implementation assistance, etc. Remember that making the right selection is only phase one of your project. A successful implementation that achieves your goals is the real challenge.
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