HRMS Selection

Essential Steps in Human Resource Management Software Selection

The process of selecting a Human Resource Management System (HRMS) for your company can be daunting. HRMS itself can be a complex system for managing everything related to Human Capital Management, from recruiting, to on-boarding, benefits, self-service, payroll, incentive compensation and more. HRMS solutions require significant up-front and recurring investment, along with plenty of risk and no guarantee of payback. To add more caution to an already arduous undertaking, Human Resource experts like to remind us that only about one-third of all HR software implementations are successful. So why do companies even attempt to select and implement a HR system?

Plainly, the primary roles of a good HRMS solution are to serve employees and reduce costs to the company. That said, when getting approval to move ahead with an HR software selection project, cost savings will likely be the key factor that triggers a go or no go decision by executive management.

HR software enables automation and efficiencies which reduce costs related to labor, delivery of services, errors, and internal or regulatory compliance. HRMS reduces risks as well, enabling organizations to effectively manage their greatest asset. Without an effective HRMS, companies would most certainly need to hire more people to perform transactional tasks that are prone to errors and take much more time.

To aid the HRMS selection process, there are several proven steps that will collectively contribute to a better decision and create the right environment for a successful HRMS implementation. Consider the following critical success factors when organizing and executing your HR software selection project.

Begin with Executive Commitment

Management often makes the decision to implement an HRMS solution and assigns the project to someone in Human Resources without really communicating the vision and commitment to the rest of the company. Executive support shouldn’t end with a nod of approval for the project but should extend to every aspect of the software selection and implementation. Commitment isn’t just about writing a check. Commitment comes in the forms of allocating the right resources to the project, taking part in the decision making, setting direction for the search committee and showing visible and verbal support to all stakeholders. An extremely common factor cited by many project teams for project failure is lack of management support.

Assemble the Project Selection Team

Selecting an HRMS solution or any enterprise software should be done as a focused and dedicated project, that is, a special assignment that is separate from daily operations. Therefore, it needs a special team, a group of people who commit either part time or full time to the task of selecting the best fit vendor. Team members need to know that this is an important project, that their participation is valuable, and that they will be recognized for their efforts. Management should make allowances for team members to spend away from their usual job duties by supporting their efforts and backfilling their normal responsibilities. Everyone should recognize that participating in this internal project could mean a heavier workload and different responsibilities during the HR software evaluation process, however, the project is critical and an important investment for the company's future. Not recognizing this will set some unrealistic expectations, both from management and from the team members, and likely distract team members from giving the effort that is necessary.

This team must also have a project leader or project manager who can effectively articulate the project vision, communicate the goals and tasks, manage the project and team members, measure project progress in real-time pursuant to a project plan, identify risks and mitigating measures, resolve variances quickly, act as the spokesperson for the committee, and help resolve conflicts and issues.

Establish a Budget

It may seem too soon, especially if you don’t know what you want yet. However, without a budget the team can waste a lot of time evaluating HR systems beyond the investment capacity of the company. Therefore, at the start of the project you should quickly establish at least a high level budget. You should let management know a ball park figure so they can gauge their appetite for your budget. This is the time to decide if you are going to look at Tier 1 or Tier 2 vendors, or cloud vendors, or vertically focused vendors, or niche vendors, or other alternatives. Remind your management team that this is only a preliminary budget. If any time during the HRMS selection the project team feels that there is a vast deviation from this number, they should communicate this to management for further review and assessment.

Place Emphasis on the Project Plan

As this is a special project, there should also be a project plan. This project plan must have tasks, resource assignments, work effort, elapsed time, dependencies, milestones and well identified deliverables. Dates must be realistic, accounting for turnaround time, response time, and resource availability. Deliverables and milestones should be clearly defined, and allow time for multiple iterations as deliverables may not be satisfactory on their initial delivery. Planning and accountability are key in any project, but even more so in an HR software selection project where team members may only be partially dedicated, have limited available hours and work in small teams which have to get together to deliver results.

Identify key Stakeholders

The third task of the team is to identify all affected stakeholders. Who are the key players? Who will be impacted by a new HRMS? For an HRMS system, it could be all the employees. They clearly have a stake in this project. However, we can pare this down to representatives of this group. They can be regional representatives, departmental representatives, or hierarchical representatives. Then there is the staff of the payroll and HR department(s), who is responsible for maintaining the system. Let’s not forget the vendors, those third party providers, suppliers and local, state and federal agencies. Unions could also be a factor in an HRMS selection and implementation. The future implementation team, those responsible for implementing and maintaining the technology, are also key stakeholders.

The risk here is that ignoring a stakeholder group during the HR software selection will trigger anxiety, resentment or push-back from that group when you get to an implementation. Take the time to identify all stakeholders, seek out representatives from each group and actively solicit their ideas and opinions.

Next: Define HRMS Requirements >>