How to Select the Best HRIS Technology for Your Business
Many companies have traditionally chosen to implement a human resource information system (HRIS) to streamline payroll and HR data management processes; however, that is not necessarily the case any longer. The implementation process is actually a strategic organizational decision; one full of opportunities to improve the organization and processes. Given the importance of the choice you are making, the system selected should meet your current needs and have the adaptability to grow and change with the organization into the foreseeable future. Through this process, the HR leader in the organization has the opportunity to make his/her presence known. They can show their value by using the new HRIS system as a tool to help them make strategic decisions for the company. They can talk about data and metrics and use company analytics to show how they impact the results on the business.
When choosing an HRIS platform there are many steps your organization should take as there are many systems on the market. They come with all different features and range in price point.
7 Steps to Choosing the Best HRIS for Your Business
Step 1: Initial Assessment
First, an organization must make the determination whether the selection process will be carried out by an internal HR team or an outside consultant firm. For smaller HR departments or HR professionals who have not experienced the HRIS selection process before, it can be a bit challenging to manage the normal day to day responsibilities as well as the HRIS process. Therefore, if the department has the need but does not have the time available to take on the data-gathering and evaluation process, hiring a consultant to assist with this process may be a wise choice. Even organizations that have a large HR Department may want to get an outside opinion to validate the findings and recommendations of their internal HR Department’s suggestions.
Step 2: Determine Organizational Needs
Assessing the organizational and departmental needs will be a company-specific venture. At this point, the specific requirements of the organization will determine the needed features versus the wanted features. Many organizations will begin with either an integrated payroll module or an HRIS that will work with the payroll system currently in place. Some of the features you might consider integrating may be an applicant tracking system, a performance management system, or a time and attendance system. Due to the ever-increasing complications of benefits administration (especially with the challenges of Affordable Care Act), a benefit module is a good addition for many organizations. These modules allow you to enroll employees, track and process benefits enrollments and participation for the organization, and produce required notices. Another additional module to the benefits module and the HR module includes an employee self-service (ESS) module. An ESS allows employees to view and update their personal information in the system.
Step 3: Evaluating Available Vendors to your Company Needs
Once you have determined a master list of requirements and project parameters, you should develop rating criteria to measure the offerings and limitations of the products available to you. List your specific needs and requirements down the left-hand side of the spreadsheet, and add the vendors and products you will assess across the top. An example list of requirements may look like the following:
- Integration with payroll system (or combination HR/payroll package)
- Performance management
- Timekeeping and attendance tracking
- Reporting capabilities, standard, and custom
- Applicant tracking
- Job and pay history
- Benefits management
- Employee self-service
- Electronic form processing
- Training management
- Training requirements
- Monthly costs
- Total costs
- Succession Planning
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Step 4: Create Your Project Committee
Once the evaluation process has been completed, you should be left with a list of vendors that match your organization’s needs. At this time in the process, you should organize a committee to view the project beyond the scope of the HR department. The evaluation committee should at least include members from the following departments:
- Members of Senior Management
Step 5: Request for Proposal (RFP)
From your list vendors, you will want to provide each a detailed RFP seeking bids for your business.
Vendors should meet the minimum requirements that you have established and should be willing to hold a price point for up to 90 days. The RFP should include information about your organization as well as your project specifications such as your minimum requirements, budgetary constraints, and targeted selection and implementation schedule. Organizations should provide RFPs to no fewer than four vendors because some vendors may be unable to meet your specific needs in one aspect or another.
Step 6: Demonstration and Evaluation
Upon receipt of the RFP responses, select no less than three vendors to come onsite to present a demonstration. The complexity of the system and your list of minimum requirements will have an effect on the length of time that you should schedule for the demonstration. Ensure that each member of the project committee is able to attend the presentations and to ask relevant questions. Use the list of minimum requirements to create a checklist (scorecard) for the demonstration to ensure that each item is sufficiently addressed. The scorecard may also include some or all of the desired items from the list of original organizational needs assessment, which could potentially serve as “tie-breaker” items during the evaluation process.
Committee members should use this opportunity to ask questions and to fully explore any aspects of the software that may be potential challenges or difficulties. Shortly after the final demonstration, members of the selection committee should meet to debrief. During this debriefing, the committee members share the results on their scorecards and bring any concerns to light. Members will also discuss how the software meets or exceeds the requirements of the organization. Follow up discussions or questions may have to be provided to certain vendors.
Step 7: Choosing Between the Final Vendors
Once you have reduced your list of systems down to your final candidates, conduct reference checks. The finalist vendors should be able to provide you with a list of current clients who are using the current product. Following your reference checks, you should reconvene your selection committee one last time to review the results of the reference checks, in conjunction with the original scorecard results. During this meeting, the final provider candidates should be measured against each other, and the team should be able to reach a selection decision at this point.
Following a decision, you can make the appropriate recommendation to the senior executives of the organization, complete with a presentation outlining the justification for the purchase and the value added by the software. Part of this discussion should focus on how this system will enable HR Managers to have a more strategic role in the organization; as they can now capture data from the new system to create leadership training programs, succession plans, and many other programs to help employees grow and develop for the future.