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| Home » Articles » HRMS Needs Analysis | Friday, July 30, 2010 |
 
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HRMS Needs Analysis
"Behind Every Successful HRMS Implementation, There Was a Thorough Needs Analysis". You can quote me on that! I cannot back that statement up statistically, however, after over 25 years in the business and 10 years of listening to IHRIM (International Association for Human Resources Information Management) members share "war stories", I am totally convinced that the amount of time spent on a thorough needs analysis before purchasing and implementing a new HRMS is the best barometer for predicting the success or failure of the project. Unfortunately, in hearing all these war stories, I have been hearing far too many of the sad tales where the "battle" was lost due to any number of perceived problems, but when quizzed on specifics, most of the failures seem to related to the lack of up-front work prior to purchasing the new system. All too often the story-teller has related the age-old problem of "not enough time" and the decision to buy being based on the positive reaction to one of the sales presentations by a vendor. I doubt if any of us in our personal lives would make a major investment such as a new car or new house without first making a list of our needs, so why, when making an investment that could cost a great deal of time and money do we rush into such a major decision? Just like buying that new car or house, it is all a matter of sitting down and deciding what it is we are looking for. Of course it gets a bit more complex when other parties are involved, but so does personal shopping for major items, when the spouse, family members, friends, etc. need and expect to have input. Ultimately you build a consensus with your colleagues and you develop a shopping list. Sticking to that shopping list will ensure that you end up with the best fit for the purchase you are making. Two areas that must be dealt with up-front are the corporate Technology Strategy, and included in that but a major concern in itself is the decision to go with "Best of Breed" or to buy an "Enterprise Wide" system. TECHNOLOGY STRATEGY: Knowing the technology direction of your organization will make life much simpler in your search for a new HRMS, it narrows down the choices to be made. For example, if preparing an RFP (Request for Proposal) for a new system for a medium to large-sized company, you would be faced with sending it to over 35 major vendors. Why is this a problem: well, number one, you are going to have to review and evaluate all those responses!When you can identify the technology platforms your company will be working with in the future, you will be able to narrow down the list of vendors to work with. To ensure you have included all the vendors who might meet your needs, consider first sending out an RFI (Request for Information). At this time you can send out a shorter (shorter than an RFP) document that details your technical platforms. Those vendors who have software solutions in this area will reply in the affirmative and you can then deal with the shorter list of suppliers. 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 (BoB), 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. It is assumed in these days of integration that the software solution you are searching for will handle both of these major requirements. However, the vendor with the best solution for your HR/Payroll needs may not have the best solution for your Financial, Purchasing, Distribution, or Manufacturing needs. Indeed, the vendor you choose may not even address those areas. Major software vendors now tend to sell most or all of the Enterprise Wide applications mentioned above. This is the trend these days, away from specializing in just one product line. The case for Enterprise Wide applications grows stronger with the move away from "silos" of business activity. For example, no longer is the HR system considered the domain of the Human Resources department, but rather it is seen in the larger corporate context with line managers and indeed employees wanting access to HR information. Many organizations today are re-engineering their business processes and show a preference for software solutions that work in many functional areas. Without going into the pros and cons of Enterprise Wide systems, it will suffice to say that they save time by reducing the duplication of information and that the information is made available in the company wherever it is required. Additional benefits are: a common look and feel; a common report writer; and, shared technology. Finally, Enterprise Wide solutions generally make for efficient use of Work flow technology, enabling the organization to effectively re-engineer the business. PAYROLL IN HR OR FINANCE? This question is not quite as old as the "chicken or the egg" scenario but it certainly has caused more tension in organizations than the poultry debate. Surveys have shown that the majority of organizations have Payroll reporting to Finance, however the trend is to move Payroll to an HR reporting relationship. In either case, it must be a given that Payroll and HR applications go hand in hand and that any successful HRMS project will depend a great deal on the mutual cooperation of these two groups in clearly defining their requirements collectively.WHAT NEXT? CRITICAL SUCCESS FACTORS (CSFs) When a project starts out to select and implement a new HR system, it is a good idea to ensure that all the key players are on-board and their input has been considered. Not only does this help to identify requirements that may have been missed, but it guarantees some degree of buy-on and support from key individuals in the company.Who are the key players? In most cases, this will be fairly evident to a project manager or steering committee. A general rule of thumb for almost any sized company:
What information to collect from these individuals?
How to use this information?
With this work completed, the project team will have a good idea of the key objectives of the new system and a list of requirements that require further analysis. RE-ENGINEERING: In most organizations these days some degree of Business Process Engineering (BPE) or Business Process Re-engineering (BPR) is taking place. If this is the case then some documentation may already have been completed that will guide the project team in defining the requirements of a new system.When BPE projects are completed properly, the end products include recommendations on what information needs to be collected and used, and, who will collect it, at what point in the business cycle. NEEDS ANALYSIS: Now that the preliminary work has been done, it is time to document each and every item that the new system will be expected to provide to your company.The CSFs will have provided a high level list of requirements but each of these may require further analysis. Let's take a typical major CSF, "Pay employees accurately and on time". On the surface this may sound quite clear, but without looking into it further, you will not have the detail required to define a requirement. This is where individual and group interviews will be necessary to define each component of the pay process. The payroll process is a long and complicated one and a great deal of time and attention must be paid to documenting the processes. Interviews of the payroll manager, staff, associated HR staff, and clients will help flesh out the detail necessary to define what your company needs in payroll processing in order to "pay employees accurately and on time". This could include defining all the key data elements; ability of the vendor to provide remote data entry of time; interfaces with key HR actions such as new hire, terminations, etc. As each requirement is identified, have your contacts prioritize each specific item into at least three categories:
As each of these requirements is identified, develop a spread sheet or simple word processing grid that identifies the requirement and its priority. Supplemental information collected during the analysis should be retained for use later when memories may not recall the reasons for some of the requirements or to assist in the evaluation of a vendor response to a particular stated need. SIGN OFFs Some organizations insist on a formal sign-off of the requirements by the responsible officers who helped provide the information. While this is not necessary in all cases, a review of the finished product, one on one with the key person will catch errors and omissions and it will also generate some buy-on to the fact that these are their needs.FINAL DOCUMENTATION: Once all of the documentation has been completed and "signed off" by the key role players, there should be a clear set of requirements, stated in point form, and each need prioritized. This document should be reviewed by the project team and changes made if necessary and ultimately the document should be presented to and signed off by the HRMS Steering Committee.Once the final documentation has been assembled, it can be included in the RFP that goes to each vendor selected to bid on the project. It is recommended that each vendor also receive a disk copy of the requirements and be informed if am electronic response is required. In most cases, the vendor will prefer to reply to the needs in the RFP by completing the disk and returning it to you. This makes life easier for the project team once all the replies have been received. Your complete Needs Analysis will enable you to make an intelligent decision on which of the vendors who reply to your RFP best meet your requirements. HRMS VENDORS There are LOTS of good HRMS vendors out there in a very competitive market today. In fact their products and tools are getting better by the day.AlDoran(at)pmihrm.com |
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