Steps to Selecting a HRIS Based on Article

Steps to Selecting a HRIS Based on Article by: John Ryder, Lois Schwartz, and Jean Andrews

Selecting a HRIS selection is invariably a more complex process and has long-term consequences for an organization. 1. What happens when you are the person responsible for selecting a new HRIS? 2. How do you approach this type of project? 3. What is the process and what are the pitfalls? The process that follows has 18 discrete steps. Some steps may be combined or performed concurrently, HR professionals will optimize their selections by following the process as presented.

18 steps to selecting a HRIS Where do you begin? Step 1 - Teamwork Start by forming a team to manage the software selection process To form a 3 to 7 person team to oversee your selection. 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.

18 steps to selecting a HRIS Step 2 - Goals Begin by identifying and agreeing on the goals for the project. Ask the team to fully answer the following questions: • What is your overall HR information systems strategy? • What do you need and why do you need it, what system functionality do you need? • What results do you wish to accomplish with this effort? • What HR processes do you wish to change through this and what should the new processes look like? • What are the business drivers for the new system, how does this system support the overall needs of the business? Identifying goals may include interviewing senior management, others in HR and clients to identify the "right" needs for your organization.

18 steps to selecting a HRIS Step 3 - Big Picture Once your goals are developed, take a step back and ask how they fit into the bigger picture of your overall IS. If you are looking for a specialized application such as applicant tracking make sure that you consider how it will need to integrate with other applications such as your main IS. Are you trying to solve only one problem when you have other software issues to address that should be considered at this time? How does this application fit with your HR IT strategy?

18 steps to selecting a HRIS Step 4 - Future Needs Ask what your needs will be in the next few years. What other applications will be needed? When will you need them? Are you planning to move to web based applications and if so, is 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?

18 steps to selecting a HRIS Step 5 - Technical Environment Information Technology representative plays a key role. The questions that need to be answered include: 1. What type of application are you looking for, stand alone PC, networked client/server, or mainframe. 2. What operating system does it need to run on -- Windows NT, Unix, etc. ? 3. If it needs/uses database application, what database does your company support, SQL, Oracle, DB 2? 4. How will remote offices get connected? 5. Does it need to be web deployable? 6. Is it open source? 7. Is your IT department planning a major change in technology platforms in the next year?

18 steps to selecting a HRIS Step 6 - Budget What your organization is willing to pay before you start talking to vendors. Separate your costs into three areas: 1. Software: includes the actual software licensing fee and other software costs for items such as database licenses and annual maintenance costs. 2. Hardware: what you will need to spend for servers, PCs, and network upgrades. 3. Implementation: 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.

18 steps to selecting a HRIS Step 7 - Specification Develop a 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. 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.

18 steps to selecting a HRIS Step 8 - Build vs. Buy It is typically both an emotional and confusing debate. When the issue arises in your process, ask the following questions: 1. Are the necessary IT resources available internally for this project? 2. Does the human resource staff have the time and expertise to develop detailed system specifications, screen designs, system edits and reporting requirements? 3. What priority will it be given by IT management compared to other business systems? 4. What is so specialized about your needs that you can't get 80% of your requirements with commercially available software? 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.

18 steps to selecting a HRIS Step 8 – (Contd. ) Best of Breed or Enterprise Wide Solution? During the phase above when you are determining the corporate strategy for technology platforms, it usually becomes apparent if your company has a preference for Best of Breed or if they have a philosophy of buying Enterprise Wide software applications. With Best of Breed (Bo. B), an organization can search for and buy the best solution possible that meets both your functional and technology requirements. Not to take this too far, it would not be advisable to buy separate systems for HR and Payroll applications.

The HRIS in the Context of Enterprise-wide IS ERP Packages can integrate human resource data with other systems in the firm Management Information System Human Resources Information System Performance Management Product IS Knowledge Training Management Operation IS Organization Management Inter organization IS Personnel Administration (Benefits, Payroll International IS Recruiting Promoting Out placing Business Information System: Finance Accounting Marketing Logistics Legal

18 steps to selecting a HRIS Step 9 - Research 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.

18 steps to selecting a HRIS Step 10 - Literature Get product literature. 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. One note of caution: 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.

18 steps to selecting a HRIS Step 11 – Request For Proposal (RFP) 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. 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. The most common elements in an HRIS RFP include: 1. An overview that describes your company, 2. A description of your software need and the employee population it will support, 3. Desired system functionality, 4. Required technical environment/specifications, 5. A request for pricing (licensing fees, maintenance charges, training and implementation support, annual maintenance fees and telephone hotline support),

18 steps to selecting a HRIS Cont. Step 11 - RFP 6. A request for customer references, 7. Details on customer service/support available from the vendor, 8. A request for sample contract terms. The RFP needs to contain guidelines for the vendor response such as: 1. Are each of the required features currently in their system? 2. Are certain features proposed in a future version of the system? 3. Will your required features require system customizations and if so what are the costs and problems associated with the customizations? 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.

18 steps to selecting a HRIS Step 12 - Evaluate 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 Rupee 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.

18 steps to selecting a HRIS Step 13 - Demos You should control product demonstrations to try and get as accurate and unbiased information 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. Create a list of specific questions 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 addressed during the demonstration.

18 steps to selecting a HRIS Step 14 - Evaluate Again After 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.

18 steps to selecting a HRIS Step 15 - Decision Points Discus 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 timeframes are critical decision points. costs and 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.

18 steps to selecting a HRIS Step 16 - Check References Now 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. 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.

18 steps to selecting a HRIS Step 17 - Demo Again Have specific items that you want to see again or need to clarify. 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. 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 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.

18 steps to selecting a HRIS Step 18 - Evaluate Again & Select 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. Remember that making the right selection is only phase one of your project. A successful implementation that achieves your goals is the real challenge.

Best HR Software Now HRIS vendors are broadening their offerings on strategic HR functionality, such as competency management, workforce planning and budgeting. They are also adding new abilities such as tracking headcounts, demographics, compensation trends, and turnover.

Best HR Software Now Vendors are providing extended Web access to support comprehensive manager and employee self-service applications, reporting and decision support features such as performance indicators and role-based Web portals focused on managing employee relationship Vendors are moving away from client/ server architectures and toward component-based, “n-tire, ” and Internet architectures HRIS vendors are enhancing their ability to integrate with other business applications and third parties, such as expending integration capabilities within ERP suits.

Rating and Analysis of Leading HR Software Packages Lawson Insight II Evaluation summary: The Lawson Insight II HR Suite offers strong payroll and benefits administration and rich HR functionality overall. The system provides a complete point-intime view of a company’s work force including current employees, open positions and contract labor. Limitations: Compared to the best-in-class HRMS, the product could be expanded in its workforce planning and forecasting features. It made recent enhancements, however in the position management area (including headcount and FTE budgeting). Lawson insight also has limitations in time and attendance management (for example, the system provides no work schedule features), but makes a standard interface with Kronos available for sophisticated time management requirements.

Rating and Analysis of Leading HR Software Packages Oracle HRMS Evaluation summary: Oracle HRMS is still a challenger of choice for People. Soft and SAP in the top–tier ERP market. From a functional standpoint, the product has potential to become a dominant player in the global, high end HR space, as the company continues to address the few functional limitations that exists within the package. Limitations: The drawbacks of Oracle applications lie mainly in the complexity of their implementation. Users should be prepared to face costly implementation process (though some progress has been made to accelerate the products configuration) with issues such as the need for expensive consultants and difficulties acquiring in house resources and in developing internal expertise ( training)

Rating and Analysis of Leading HR Software Packages People. Soft HR Management Evaluation summary: Highly flexible People. Soft HRMS offers the broadest HR functionality on the market and is limited in its international payroll capabilities. Limitations: Although it supports multiple currencies, the payroll functionality is not offered as a global solution. The European payroll project (developing in collaboration with ADP using People. Tools) was revealed to be more complicated and resource- intensive than anticipated. Like Oracle and SAP People. Soft belongs to the family of highly configurable ERP packages, involving relatively high implementation costs.

Rating and Analysis of Leading HR Software Packages Ultipro HRMS/Payroll Evaluation summary: Focused on the North American market, Ultipro is a highly functional, best-of- breed HRMS solution for companies with 500 to 1500 employees( the vendor also targets companies with less than 500 employees). A successful player in this market, the vendor combines a solid, Microsoft- based technology strategy, a particular emphasis on customer support( experienced support representatives and so on. Limitations: Ultipro is available only in English and has limited international features. The system handles some international addresses and includes some features for expatriates. The compensation function dose not support scale points (the public sector and higher education are not targeted markets for the vendor at this time).

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