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Choosing a Human Resource System
The HumanResource Information System is the core system used by any HR department to manage their operations, to perform administrative tasks efficiently and to help in HR strategy. The HRIS is chosen with respect to the organisations needs. An HRIS which matches a particular company may not necessarily fit other organisations. However a good HRIS can also “be tailored” to fit any organisation.
1. Do you need an HR system?
The first step to getting your HR department transformed through an HR system is to look at and find out what exactly you need. Do you want an HR system in the first place? What features of the HR system do you need? It is a necessity or is it just an extra which you would like to have?
Many HR Managers want a HR system but they do not fully comprehend the benefits of such a system. They are unaware that HR systems can improve staffing efficiency and reduce HR department costs. They are unaware that by using a HR system they can solve many of their impending HR problems and enforce better HR policies and practices.
By fully understanding what an HR system can offer and what features they provide you can easily decide if you require an HR system or not. In most cases you will require such a system as HR systems provide benefits for almost any organisation, unless maybe you are a florist with only 3 employees.
2. What exactly do you need?
After establishing that you require an HR system it is time to decide what features or modules you need. If you are a small company with about 60 employees you might only need a payroll and attendance system to monitor staff time and attendance and pay accordingly. If you are a company with people intensive operations like a BPO organization, you need to monitor the performance of such employees and give them training and development in addition to having a payroll and attendance tracking feature.
For larger global organizations with several thousands of employees, you also need strategic and reporting modules like analytical tools and an HR dashboard, where you can monitor you workforce from a macro level.
3. Prioritize your requirements.
The next step is to prioritize your needs. Different requirements are critical to different organizations; some would need a perfect Time and Attendance system. Others would require the best analysis tools. Based on the prioritization of needs, you can create a set of minimum requirements that must be satisfied by a future HR system.
4. Check Compatibility requirements.
After gathering your core requirements you have to see what systems you have and how a future HRIS will need to integrate with them. Do you have an ERP? How is your HR information and data presently stored? What are your organisation policies and HR policies how will an HR system be conducive to them? Are you going to drive change through an HRIS? How is your company prepared for this change? These are the questions you should ask at this stage.
Add the compatibility requirements to your list of feature requirements.
5. Decide on whether you need a Cloud-based or On-premise solution
These are two types of HR Solutions. The on-premise solution is hosted inside your company and it is accessed through your local network. This way, all your information is stored inside your company and you own all servers which run the HR system. But this also has its disadvantages, there is a large capital expenditure associated with deploying an on-premise solution and you also have to deal with the equipment repair and maintenance costs. This architecture is also rigid and you cannot increase or decrease your supported user-capacity easily without rendering substantial costs.
On the other hand, a CloudHR solution stores all your data on servers external to the company. They are usually stored on the servers of hosting providers where data hosting is much safer and well maintained. You access the system via the internet using secure protocols. A CloudHR solution does not require a high capital expenditure but requires a monthly rental based on the features you have selected and the number of employees being handled. A CloudHR solution allows for global access and so can support global organisations with offices in multiple locations. It is also flexible and can easily support spontaneous growth.
A cloud based solution is cheaper for smaller, medium organisations and global organisations while an on-premise solution is cost efficient for a large organisation with offices in a few geographic locations. By considering all of the above, you will find that one or the other is straightforward for your organisation.
6. Look at your budget
Evaluating HRIS systems takes a lot of time and energy, scrapping the whole project due to budget problems later on will result in this time and effort wasted. This is the right time to consult other decision makers and find out how much you can allocate for the entire project. When preparing your budget for an HRIS it is important that you also list down the benefits you are seeking through implementing the HRIS. You should weigh the benefits with the costs and make sure you justify the costs.
Measuring ROI using a Payback period analysis is beneficial at this stage. You have to see how the revenue
7. Shortlist HRIS
At this stage, you evaluate HRIS and HR vendors from a macro viewpoint based on the core selection criteria you have identified in steps 4, 5, 6 and 7. You have your base requirements, your compatibility requirements and your budget. Any HRIS that does not satisfy these requirements can be scrapped off.
8. Call for Demonstrations
You cannot fully understand an HRIS before actually using it. Call up the vendors you have shortlisted and ask them to do demonstrations. During the demo ask as much questions as you want about the HRIS. Make notes based on your initial perception of the systems.
9. Comprehensively Evaluate HRIS
Concentrate on the features and compatibility requirements you have highlighted earlier and try to figure out which HRIS satisfies them better. Then look at usability and if your employees will like the system.
If you are satisfied with the HRIS, do background checks on the HRIS vendors. Look at the number of years they have been in the industry, their previous clients and ask for references. Also look at their financial stability and determine if they are able to cater to any future needs later on like system upgrades.
10. Implement System
If you are satisfied with both the HRIS and the HRIS vendor then go ahead with implementing the system. However it would be wise if you have a proper change management plan with you. Things you have to keep in mind include informing all stakeholders of the system especially the employees. You also have to involve the employees during the implementation process. Following change managing guidelines will help guarantee the success of the implementation.
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