MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
UNIT 1
Introduction:
Data & Information needs for HR Manager; Sources of Data; Role of ITES in
HRM; IT for HR Managers; Concept, Structure, & Mechanics of HRIS;
Programming Dimensions & HR Manager with no technology background; Survey
of software packages for Human Resource Information System including ERP
Software such as SAP, Oracles Financials and Ramco’s Marshal [only data input,
output & screens];
Learning Objectives:
After reading this
chapter, you should be able to understand
•
The meaning and definition of HRIS
•
The importance of HRIS
•
Data and information needs for HR manager
•
Sources of data
•
Concept structure and mechanics of data
•
Survey of software packages for HRIS
•
Basic knowledge of ERP software such as SAP,
Oracles Financials and Ramco’s MArshal
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
Introduction
Many
well-known examples of the use of information technology for competitive
advantage involve systems that link an organization to suppliers, distribution
channels, or customers. In general, these systems use information or processing
capabilities in one organization to improve the performance of another or to
improve relationships among organizations. Declining costs of capturing and
using information have joined with increasing competitive pressures to spur
numerous innovations in use of information to create value. The ideas do not
constitute a procedure leading inexorably to competitive advantage. However,
they have been of value when combined with an appreciation of the competitive
dynamics of specific industries and a grasp of the power of information.
Results from "The Gap Between IT and
Strategic HR in the UK",(June 2006) a study by talent management solutions
company Taleo, show a significant disconnect between HR's strategic functions,
including talent acquisition and workforce planning, and IT ability to support
these business initiatives.
The survey of 100 senior HR managers, all in
organizations employing more than a thousand people, found that only a quarter
thought that strategic functions such as workforce planning, leadership
development and performance management were well supported by their IT systems.
Only a third felt confident in systems support for recruitment and employee
progression. Other findings included:
•
Current technology systems were out-of-date.
Over half the respondents (55%) felt that more sophisticated technology systems
and processes
were needed to support recruitment and
development.
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
•
IT
focused on lower-level, administrative functions. Respondents said that payroll
and employee administration (68%) and evaluation and management reporting (53%)
were adequately supported by IT. However, more strategic HR initiatives such as
performance management (28%), leadership development and planning (25%) and
strategic workforce planning (25%) were not well supported.
•
Inadequate data and technology systems
obstructed workforce management. Just 29% of respondents felt that they had
sufficient systems in place to gain a clear picture of existing employee
skills.
•
The HR function was striving to become more
strategic. 63% of respondents cited talent management (including recruitment)
as a significant priority in the year ahead.
Taleo Research Vice
President, Alice Snell said:
"The gap between the support of
administrative functions and strategic HR responsibilities needs to be
addressed in order for HR directors to deliver results to the Board. When HR
directors can assess the workforce changes needed by the business, acquire and develop
the talent needed to optimise the workforce, and then measure the results,
their true value can be realised."
"Findings of this study clearly show that HR
is evolving to play a more strategic role in supporting fundamental business
objectives, but the systems being used by HR functions are not keeping
up," added Neil Hudspith, Senior Vice President, International Operations,
Taleo. "It's clear that talent management and other strategic initiatives
are being recognised as essential functions by ambitious companies that want to
retain and recruit the best people, but organisations need to arm their HR
directors with the tools and technology
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM needed to support this strategy. The right
HR technology is a critical element of
any HR
strategy moving forward."
Meaning
and Definition of HRIS
Human Resources Information System, is a system
that lets you keep track of all your employees and information about them. It
is usually done in a database or, more often, in a series of inter-related
databases.
These systems include the employee name and
contact information and all or some of the following:
department,
job title, grade, salary,
salary
history, position history, supervisor, training completed,
special
qualifications, ethnicity,
date of
birth, disabilities, veterans status, visa status, benefits selected, and more.
Any HRIS
include reporting capabilities.
Some systems track
applicants
before they
become employees and
some are interfaced
to payroll or
other
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM financial systems. An HRIS is a management
system designed specifically to
provide
managers with information to make HR decisions
•
You
notice that this is not an HR system...it is a management system and is used
specifically to support management decision making .
•
The need for this kind of information has
increased in the last few years, especially in large and/or diverse companies,
where decision making has been moved to lower levels
•
And large companies generally have the
advantage when it comes to HRIS’s...the cost to develop an HRIS for 200 people
is usually close to that for 2000 people...so it is a better investment for
large companies...larger companies tend to have systems that have a fair degree
of customization
Therefore, HRIS can be
defined in simple words as given below.
Human
Resource Management Systems (HRMS, EHRMS), Human Resource Information Systems
(HRIS), HR Technology or also called HR modules, shape an intersection in
between human resource management (HRM) and information technology. It merges
HRM as a discipline and in particular its basic HR activities and processes
with the information technology field, whereas the planning and programming of
data processing systems evolved into standardised routines and packages of
enterprise resource planning (ERP) software. On the whole, these ERP systems
have their origin on software that integrates information from different
applications into one universal database. The linkage of its financial and
human resource modules through one database is the most important distinction
to the individually and proprietary developed predecessors, which makes this
software application both rigid and flexible.
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
Advantages
of HRIS
• An HRIS
can reduce the amount of paperwork and manual record keeping
•
It retrieves information quickly and
accurately
•
It allows quick analysis of HR issues
Most HRIS
Contain:
•
Personal history - name, date of birth, sex
• Work
history - salary, first day worked, employment status, positions in the
organization, appraisal data and hopefully, pre-organizational information
•
Training
and development completed, both internally and externally
•
Career plans including mobility
• Skills
inventory - skills, education, competencies...look for transferable
skills
The pressure is on for proactive HR innovations
that contribute directly to the bottom-line or improve employee morale and
efficiency. Ajuwon (2002) points out that the typical HR professional gets
involved with one step in many different flows of work. Very often the
involvement of HR has no purpose except to validate the process in some way and
acts as an interruption to the flow of work. In other words, the HR function is
a 'gatekeeper for information that’s been deemed too highly classified for the
data owner.'
So HR is not actually making a measurable
contribution - in fact, the opposite. HR involvement creates a queue or delay
in the process. We should ask if the HR involvement is really necessary. Once
upon a time the HR database had an 'all-or-nothing' quality - probably because
it was paper-based.
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
But now technology allows controlled access to
various portions of the database. So an employee can safely amend his or her
own address or bank account details, while the ability to change certain
appraisal details might be confined to the line manager. In either case, there
is no reason for HR to be involved. HR should move on from the role of
intermediary.
Not surprisingly, the use
of employee self-service systems for records, information, payroll and other
functions is becoming increasingly common. Libraries of forms can be kept
online to be downloaded as and when required. Systems can be enhanced to
include streaming video and other new software providing wide access to
corporate videos, training, etc. Obviously, e-mail announcements and
newsletters can also be used to alert employees to new developments or urgent
requests.
Ajuwon (2002) argues that HR should be proactive
in the process and highlights three different perspectives for action:
* The
process perspective - getting the fundamental building blocks (people
processes) right and ensuring their relevance at all times. This demands close
and detailed knowledge of HR processes and a commitment to improvement and
efficiency. HR professionals need to understand their own objectives and the
relationship with business strategy.
* The event
perspective - a focus on providing a framework for knowledge management. In
other words, capturing the experience and information available in that
harnesses the organisation and making it available to individuals.
* The
cultural perspective - acknowledging that HR has a 'pivotal role in the
proactive engagement of the entire organisation in a changing climate.
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
During the 1990s the business process re-engineering approach
resulted in many organizations taking a 'root and branch' look at HR and other
processes. Subsequent reorganizations may have produced fresh, streamlined
processes but often they became inappropriate or inefficient as circumstances
changed. It is not enough to design a corporate human resource strategy or
acquire a piece of technology. There has to be some way of ensuring effective
operational delivery. A more fluid, constantly changing methodology is
required. Ajuwon contends that we have the means:
"It’s more than innovating and/or
streamlining your HR processes; or building an HR portal or introducing a
culture change programme.
"It’s about weaving
together all three in a way that sustains change, engages the entire
organization and deploys the organization’s knowledge assets to gain
competitive advantage and deliver profitability, even in times of economic
downturn."
Human resource systems can differ widely. They may
be:
*
Intranets using web-type methods but operating purely within one organization
or location.
*
Extranets - encompassing two or more organizations.
* Portals -
offering links to internal information and services but also accessing the
worldwide web.
Advantages
-
Familiarity (looking like web pages)
-
Attractiveness (colourful, clearly laid out,
graphics)
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MBA-H4040
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HUMAN
RESOURCE INFORMATION SYSTEM
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Integration (linking
different HR systems
such as basic
personnel
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records, employee
handbooks, terms and
conditions, contracts, various
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entitlements
and payroll)
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Allowing employees and managers to enter,
check and amend controlled ranges of personal and other information.
-
Eliminating printing, enveloping and mailing
of personnel and other employee information
-
Reducing need for telephone handling of
routine enquiries by HR staff.
Basic system requirements
1. Desktop PCs for accessing and inputting
information locally. Standard browsers are used to access information (e.g.
Netscape or Internet Explorer).
2.
Organization-wide server. In
a small company this need be nothing more than
a PC as
well. The server must have an intranet server software package installed
(Microsoft Internet Information Server, or Netscape Communications Server are
examples.)
3.
Server-side software such as HTML, Java, Javascript, Perl.
4.
Intranet communications protocol running on both PCs and the
server.
5.
Relational database/Information processing
software for records, payroll, etc. If data is to be accessed then the
procedure is made slightly more complicated with the need for CGI scripts and
database server software on the server.
6.
Basic
documents such as
policy manuals typically
loaded in HTML - but
formats such as Adobe Acrobat PDF
are also an alternative.
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
Cost-benefit
analysis
Difficult
to quantify because the greatest return is in improved morale.
Robert Musacchio, CIO with the American Medical
Association in Chicago is quoted as having installed between 50-60 intranet
applications for 1400 employees at $10,000 to $20,000 per application.
"Musacchio
says a self-service employee-benefits site, which provides information on
benefits and lets employees pick health-care, day-care, and retirement
investment options, was built for "almost six figures." Musacchio
figures it provided a 40% return on investment, based on the time saved by
human resource managers who don't have to answer employees' questions about
these topics because they're answered by the application".('Intranet ROI:
Leap Of Faith',( Information Week Online, May 24 1999.)
Fletcher argues that businesses have to adopt a
'Human Capital Management' approach to make the most of any organization's
greatest asset: the skills, knowledge and experience of its staff. She
describes how, in the 1990s, most large businesses introduced 'Human Resources
Information Systems' (HRIS) and that, in combination with re-engineering (the
buzzword of the time), this enabled them to "replace antiquated,
time-consuming personnel processes with automation."
Walker (Walker, A.J. 'Best Practices in HR
Technology' in Web-Based Human Resources, McGraw Hill, 2001)
states that if HR technology is to be considered successful, it must
achieve the following objectives: It must provide the user with relevant
information and data, answer questions, and inspire new insights and learning.
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
Efficiency
and effectiveness
HRIS must be
capable of changing the work performed by the Human Resources personnel by
dramatically improving their level of service, allowing more time for work of
higher value, and reducing their costs.
But, despite extensive implementation of
Enterprise Resource Planning (ERP) projects, Human Resource Information Systems
(HRIS), and HR service centres costing millions of dollars, Walker concludes
that few organizations have been entirely happy with the results. Why is this?
Many systems have been implemented by cutting HR
staff, outsourcing and imposing technology on what was left. Arguably this
approach should, at least, have cut costs. But Walker argues that survey
results demonstrate that overall HR departments have actually increased their
staffing levels over the past decade to do the same work. Moreover he considers
that:
"Most of the work that the HR staff does on a
day-to-day basis, such as staffing, employee relations, compensation, training,
employee development, and benefits, unfortunately, remains relatively untouched
and unimproved from a delivery standpoint."
Fletcher explores the issue of effectiveness in a
very telling paragraph (page 15) in which she states that: "Executives
struggle with what to measure and how to clearly tie employee metrics to
business performance." Not only are they pressured by the vast costs of
Human Capital Management (payroll, etc.) but they also have to report to
analysts "whose valuations consist partly of measuring such intangible assets
as the corporate leadership's team to execute on strategy or the ability of the
business to attract and retain skilled talent."
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
She
concludes that:
•
Executives are not sure about the kind of data that would prove to analysts
that their employees are delivering better and creating more value than their
competitors.
•
Analysts
are struggling to make sense of intangibles, often falling back on a 'revenue
per employee' metric which does not tell the whole story.
The HR
Function
The business
process should be re-engineering the HR function first, then E-engineering the
HR work. He suggests the formation of re-engineering teams of providers,
customers and users to examine the whole range of HR activities - including
those which are not being done at present. The end product is a set of
processes organized into broad groupings such as resourcing, compensation or
training and development. These processes should then be examined by the
re-engineering team and redesigned to:
•
Be better aligned with organizational goals.
•
Streamlined so as to be cost-effective in
comparison with the 'best in class'.
•
Have a better integration with other
processes.
From this redesign comes the picture of a new HR
function. What next? The organization could be restructured and the tasks
handed out existing or new staff. But Walker argues that the most effective
approach is to introduce new technology to deal with the redesigned processes.
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
For HR to survive in this brave new world it needs
to "possess a technology acumen like never before." A tall order, one
suspects, for many die-hard personnel traditionalists. But if they do not
demonstrate the ability to recommend appropriate technology and control
automated HR processes, organizations will use other people for these tasks
some replacements for 'traditional' HR executives may have no direct experience
of human resource management at all. Instead, they may have "led a line of
business and have had P&L responsibility, understand what it means to be
accountable for delivering business results."
Walker
(Walker, A.J. 'Best Practices in HR Technology' in Web-Based Human
Resources, McGraw Hill, 2001) discusses a range of technologies available
for re-engineered HR processes, contending that they are all capable of dealing
with HR activities in a secure and confidential manner.
1.
Workflow. Walker describes this as being like e-mail with a database and
built-in intelligence.' Essentially, a user accesses a range of employee
records (perhaps their own) through a computer terminal, keys in data such as a
change of address and submits the data electronically to the next person in the
chain. The system is configured so that only certain individuals are authorized
for a specific range of access or actions. The workflow chain is organized to
ensure that the most suitable person approves an action. For example, a bonus
payment would be authorized by a line manager's own manager. Also, the system
can be structured so that bonuses over a certain level can be monitored by a HR
specialist. The paths and actions are all specified in accordance with company
rules.
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
2. Manager self-service. Managers can have
access to 'front-end' applications on their desk tops in the form of HR
portals. Typically, they are able to view a range of personal details and
aggregate information. They are also allowed to change and input certain
details and model the consequences on their budgets of salary increases or
bonus payments. More generally, policy manuals, plans and strategies can be
made available. Walker highlight the facility to 'push' information requiring
attention to managers - including those dreaded employee performance
appraisals.
3. Employee
self-service. Similarly, employees can view company information, change
selected personal details, make benefit enquiries (pension plans, sick pay
entitlement), book leave and apply for training programmes. Walker makes the
point that 'portal technology will personalize this data further and
"push" relevant data to them as well.'
4. Interactive voice response (IVR). A
low-tech method, using the push-button control facility found in most modern
telephones. Most of us are familiar with automatic responses such as: "If
your call is about vacancies in the accounts department - press 3 followed by
#" when we dial large organizations. The system is restricted but easy to
use and inexpensive in comparison to web-based methods. It is suitable for job
openings and training course details where straightforward information can be
recorded as simple scripts.
5.
HR Service Centres. Walker notes that this
has become one of the most widely used solutions to re-engineered HR in large
organizations. Such centres centralize a number of HR processes and may deal
with geographically widespread users. For example, the Raleigh, North Carolina
service center can deal with all of IBM's North American current and former
staff.
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
Operators
or 'Agents' take enquiries by phone, e-mail or online that may already have
been filtered through interactive voice response scripts or desktop HR systems.
In effect, they deal with the relatively non-routine issues that cannot be
handled by basic technology. However, they do use recognisable Call Centre
techniques such as scripted protocols. The Agent can enter keywords or a
question into a knowledge database and bring up relevant information with which
to answer the caller's query. If that query is not covered by information in
the knowledge database it can be referred to a supervisor using workflow.
HR service centres also have a fax, e-mail and
postal facility to send information, confirmations, follow-up queries and
printed brochures to users. They are also monitored in the same way as
conventional Call Centres and can generate useful statistics on types and
frequency of enquiries. Walker contends that most reports show that
organizations find HR service centres to be highly cost-effective and provider
faster and more consistent answers than traditional HR departments.
6. Human Resource Information Systems (HRIS) and
databases. According to Walker (2001):
"The HRIS system is the primary transaction
processor, editor, record-keeper, and functional application system which lies
at the heart of all computerized HR work.It mains employee, organizational and
HR plan data sufficient to support most, if not all, of the HR functions
depending on the modules installed.
It will
also supply information to other systems and generate reports.
7. Stand-alone
HR systems. A
massive choice of
applications available from commercial vendors
which can be
linked to a
HRIS. They include
online 15
MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM application forms, tests, appraisal
databases, 360-degree performance
assessments
and so on.
8.
Data-Marts and Data-Warehouses. Sources of information, usually held as
relational databases which can be interrogated. Data-Marts normally hold
data from single sources, such as HR; Data-Warehouses amass information
from multiple sources.
DATA AND
INFORMATION NEEDS FOR HR MANAGER
Collect Data
Assess the mission, vision, strategy, and culture
of the organization, from whatever written material there is in the company
(check with the department or person who handles public, customer, or
shareholder relations).
Collect existing data such
as:
•
Hiring statistics (acceptance rate, hiring rate, hiring
projections)
•
Turnover
•
Compensation and benefits philosophy and practice
•
Exit interview summaries
•
Employee complaints (discrimination, harassment, safety,
other)
•
Promotion and advancement practices and trends
•
Human Resources budget and expenditures
Where possible, compare the data
collected with market data. This information will provide you with a point of
view for the next phase of the audit:
16
MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM the interviews. If, during the interview,
discrepancies arise between the data and
the interviewee's answer, ONE can explore
the reasons for the discrepancy(s).
Conduct
Interviews
The purpose of the interview is to collect input
from the internal customer on their Human Resources needs and how those needs
are being met. Begin the interview with top management. Next conduct interviews
with a sample of subordinate managers including first line management. The
topics to discuss during the interview include:
•
Perceptions of the company and its goals
•
Strengths and weaknesses of top management
•
Employee perceptions of the company and top management
•
Relations with subordinates
•
Support of career goals for self and employees
•
Major Human Resources issues
•
Which Human Resources functions work well
•
Which Human Resources functions need improvement
In addition
they can provide indirect feedback. For example, the results may indicate that
different organizations have conflicting goals. Perhaps a performance
management system could correct this problem. Or perhaps communication isn't
flowing well in the organization, suggesting a need for communication programs
or some training and development.
Some of the information collected during the
interviews will be sensitive. Confidentiality must be respected. Get advanced
approval from top management on the questions you will ask during the interview
phase.
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
Summarize
the Results
Consolidate
the information you collected. Compare the results with market surveys.
Determine which practices are good / popular / effective / competitive.
Determine which practices need improvement. Recommend specific improvements
referring to the results of both the Effectiveness audit and the Regulatory
compliance audit. Justify the recommendations. Determine how to measure whether
the improvements are successful.
Obtain Approval from
senior Management
Present the
preliminary results and recommendations to senior management individually.
Point out how these recommendations will support their needs. Obtain their
support, and then present the final results and recommendations to the senior
management staff for final approval.
Implement the Program
Consider implementing the program in part of the
organization as a pilot program. Monitor and measure success and seek to
continuously improve processes. Be prepared to modify the program if an
organizational change requires it.
SOURCES OF
DATA
Absence of sufficient qualification required for
the job puts extra efforts on the HR department or the colleagues to train the
new appointees. Many companies do take the pain of training new recruits by
conducting induction training and other regular workshops. However, the best
training one can get is on the job.
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
Some companies give so much importance to the
'training' part that it turns out to be the best company for new comers to
learn. A good training schedule is important, but simultaneously, all other HR
concerns are equally important. Companies should learn to not just appoint and
train people, but retain them through smart ways.
Recruitment
source:
DQ Channels asked members of the solutions
provider community to rank the best sources of recruitment. The best
recruitment sources according to majority of the respondents were 'Referrals'.
Yes, referrals or word-of-mouth is no doubt the best source of recruitment.
This also saves a lot of time energy spent in testing a new candidate's
caliber. "There is an element of trust involved. When a person is sent to
us by a person known to us and who knows our requirement, he or she is the best
we can get," said one HR manager.
The next best
source for recruitment is consulting agencies, job sites and print
advertisements in that order. Surprisingly, very few responded with 'Campus
recruitment' as an alternative source for getting people
ITES IN HUMAN RESOURCE
MANAGEMENT:
The people working in IT Enabled Services have a
great amount of stress when compared to other people and their nature of jobs.
Nowadays the company’s work on target basis so to reach the target the
employees have to strive hard therefore for the strain in their jobs the HR
department have to think about coping their stress by giving some
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
•
Recognition
•
Hike in the pay
•
Fringe benefits
•
Fun programs & some recreational activities.
IT FOR HR MANAGERS:
It is essential for a
Human Resource Manager to have some knowledge on information technology because
everything nowadays is becoming computerized and especially when it comes to
human resource information systems the HR manager has to be aware about the system
well at least for the sake of minor things like payroll, compensation, etc.
So information technology plays a vital role for
any department & especially HR Department in any organization.
CONCEPT,
STRUCTURE, AND MECHANICS OF HUMAN RESOURCE INFORMATION SYSTEMS (HRIS)
Integrated HR Information
Systems (HRIS) have a profound effect on firms that implement them. Most often
these firms are replacing several related systems, such as a personnel
database, payroll system and benefits system, with one HRIS that does it all.
Many people focus on the improved reporting and processing that will be
realized from the new system, and those are the reasons most firms choose to
implement a new HRIS. But what many people don’t focus on is that the new HRIS
will most likely affect the company much more deeply – it will challenge the
operating structure and principles of all the HR-related departments.
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
An integrated HRIS results is a drastically
different environment than a cluster of related but separate systems. The core
concept of a centralized data store inherent with an HRIS demands integrated
work processes for consistently managing that store. The two attributes –
centralized data storage and integrated work processes – will affect the
company in ways most managers don’t expect.
EVALUATING
AND PREPARING FOR A NEW HRIS
Many companies go through a process of comparing
and evaluating several HRIS packages using a team of analysts or managers from
the various departments affected – HR, Payroll, Benefits, Employee Relations,
Training and so on. As this team prepares its evaluation criteria and reviews
HRIS features, much is learned about the goals and values of the various
departments. The HR department is looking for improved reporting of employee
data, Payroll is concerned with the system’s paycheck calculations and regulatory
reporting, while Benefits may be looking for a more streamlined enrollment
process. As this team drives deeper into the selection criteria, the members
learn more about each other and may start to see the emergence of some really
messy business processes. It can be a bittersweet process.
The hiring process is a good example. As a person
is recruited, hired and paid each department may have its own specialized
system and process for managing the employee data. As the HRIS evaluation team
discovers redundant processing and data storage, its members start to see ways
to make the process more efficient by aligning their part of the hiring process
with the requirements of the other departments. The team members are excited to
find a better way to get the work done, but scared by the ramifications of
closer ties to other departments. They think: ”If we improve the efficiency of
the process we won’t
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM need as many people in our department and
we might lose control of some piece
of data
that is critical to our business function.
As the team
evaluates an HRIS software package, it begins to get a better grasp on what the
entire company’s business processes are, and therefore what the company might
require in an HRIS. The team will most likely find that none of the packages
are an exact fit and that substantial effort is required to modify or integrate
the chosen HRIS. Or if not enough due diligence and research have been done,
the team may be facing this effort and not be aware of it. This gap in planning
will show itself later in the implementation phase when the project team
realizes there are not enough resources – time, people and money – to implement
the HRIS.
Perhaps the most critical results of the HRIS
evaluation process are that the evaluation team set correct expectations for
the project and gain executive management commitment. With correct, or at least
realistic expectations and an executive management team that seriously supports
the team’s efforts, an HRIS implementation project has a much greater chance to
succeed. Most often the HRIS evaluation team members spend most of their
efforts building selection criteria and choosing an HRIS, instead of setting
expectations and building executive support.
THE HRIS
IMPLEMENTATION PROJECT (Configuring
the New
HRIS)
There are three primary activities in an HRIS
implementation – configuring the HRIS for the firm’s business processes and
policies, interfacing data with other systems and converting historical data
into the HRIS, and preparing the organization for the new HRIS. An HRIS comes
with built-in
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM processes for most HR activities, but firms
will need to customize the system to
process
according to their specific needs. For example, every HRIS supports the process
of benefits open enrollment, but the system does not come delivered with a
firm’s specific benefit providers and eligibility rules. Customizing the HRIS
for this typically does not involve programming; the common activity is to
enter specific data into control tables that then direct how the HRIS operates.
The customizing, or configuration tasks then become a process of understanding
the firm’s business processes well enough to encode that logic into the HRIS.
This mapping of business processes and policies
into system control tables requires people who understand both the business
process and the HRIS – typically the existing IT support and HR business
analysts. Due to the large amount of work, the HRIS project team usually needs
these analysts fully dedicated to the project, requiring the ”home” departments
to fill the gaps in their absence. Having partially dedicated team members may
cause tension since the team members have to maintain responsibilities at the
home department while also fulfilling responsibilities on the project team.
Either way, back-filling resources becomes a big issue if not planned for
during the evaluation stage.
Firms may
find that the internal resource people assigned to the project do not have the
skills or capabilities needed for the job. Sometimes training can resolve this,
but other times the people lack basic analytical skills required for the
implementation. One of the key requirements for a person to be successful on an
HRIS implementation project is that he/she have excellent analysis skills. The
most analytical people in HR and IT should be assigned to the project, or else
the company should rely on external resources (i.e. contractors or
consultants). The project can get done this way – but the more an
implementation team relies on external resources the more difficult it will be
for the company to become self-sufficient in ongoing HRIS support, maintenance,
and operations.
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MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
Many HRIS
implementations include, to one degree or another, business process
reengineering. As a firm documents, investigates, and discovers its true
business processes, it’s natural that the firm also take time to improve them,
or at least integrate the processes across departments. The integrated nature
of most HRIS packages drives this activity. When a process is reengineered or
integrated, once-independent departments become much more dependent on each
other. That dependency can increase tensions on the project team as
representatives from those departments learn to trust others to do their part
of the process. Or, once the project team members become comfortable with the
new processes they have designed, they may have a hard time selling those
changes back to their departments.
Most HRIS packages don’t handle exception
processing very well. As new business processes are designed, the project team
customizes the HRIS around those new processes. Users will most likely find
that exception cases require significant manual thought or labor to process –
since the exception does not fit into the business process as implemented in
the HRIS. HRIS project team analysts will walk a fine line between
generalization of the process to fit exceptions vs. a more narrowed
implementation of the process to enforce data integrity and accurate
application of HR policy. This is a great time to enforce some standards and
clean-up ”special deals” – but HR managers and policymakers must be willing to
support these efforts, and to help implement them. Finally, as the project team
analysts dig into the current business processes, they may find that the HR
users, and sometimes managers, don’t really understand or know the processes
well. Users may know what is done, but not why it is done. Knowing the why part
is critical to getting the most out of your HRIS implementation. In most every
HRIS there are two or three technical methods of implementing any given
requirement – knowing why something is
24
MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM done in a business process helps ensure the
project team analysts select the best
method of
implementing it in the HRIS.
Linking
the New HRIS with Other Systems
Most HRIS project teams have a number of people
assigned to converting historical data from the existing HR databases into the
new HRIS, as well as for interfacing the new HRIS with other systems that rely
on HR data. As this group starts mapping historical data to the new system for
conversion, most often group members will find (particularly when combining
data from several existing systems to go into one HRIS) that the existing HR
data contains a significant amount of invalid, incomplete, or contradictory
data. As the new HRIS was configured for new, reengineered or streamlined
business processes, the existing employee data may not fit well into the new
system. The new HRIS will demand more complete and accurate employee data.
Making sense
of these data conversion problems is a skill that falls to HR analysts, not the
programmers writing data-conversion routines. Conversion and interfacing are
not solely technical activities – user consultation and input are required.
Many HRIS project teams discover these requirements too late, thus increasing
the demand for time from HR analysts on the project team – time that the
analysts most likely do not have.
If the firm
has a data warehouse, the new HRIS data will need to be mapped to it. If the
data model in the warehouse is based on the legacy HR database, the two data
models may not be compatible. A lot of effort can be spent mapping the new HRIS
to an existing data warehouse. Or if the HRIS vendor has its own data warehouse
application, the project team might be
25
MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM tempted to use it, but they’ll still have
to contend with converting existing
historical
HR data into the new warehouse. Either way, HRIS project teams spend more
effort than planned on this issue – the details can get very tedious and time
consuming.
Replacing HR systems involves any area of the
company that reads or relies on employee data. New system implementation may
highlight employee data privacy issues, or increase the scope of interfacing
once the project team realizes just how many systems read employee data from
the current HR-related databases.
Preparing the Organization
Many
times it is
easier for project
teams to focus
on technical aspects
of
the
implementation, which is ineffective. For example, configuring the HRIS to correctly
assign resident tax codes based on the employee’s address is easier than
getting HR, benefits, payroll, and recruiting to buy into and implement a
reengineered hiring process. The HRIS project team must track progress not only
on the technical aspects of implementing the HRIS, but also on the softer side
of managing the organization as a whole to accept the new business processes
that come with the HRIS. Companies typically underestimate this
change-management effort. From the very beginning there must be a focus on
preparing the organization and the employees for the new HRIS. A new HRIS, with
more integrated work processes, tends to pull related departments together.
Some firms recognize this as they go through the implementation process, and
also implement a new organizational structure with the HRIS roll-out. For
example, HR and Payroll may have reported to separate areas of the company,
and parts
of HR business
processes were scattered
throughout various
26
MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM departments. But as a new HRIS is
implemented, the previous organizations are
transformed
to report to a single authority, and a shared-services group is established to
perform the integrated work processes that were once scattered. This is a
common, but often unexpected, result of HRIS implementations.
During the implementation phase, firms should also
be determining what their support model will look like – what kind of
organization will be required to support this new HRIS? Those who study this
task in detail will realize they need cross-functional support teams –
containing programmers (ABAP), configuration experts, and business analysts –
to successfully support the new HRIS. But this integrated support team does not
fit well into the vertical departments in most companies today. Finding a way
to implement this cross-functional team is a critical success factor for the
new HRIS’ ongoing operation. All of the items mentioned so far force HR
managers to become involved in what is usually perceived as an IT project. They
may be accustomed to pushing responsibility for such projects onto IT managers,
but implementing an integrated HRIS requires HR manager participation and
active involvement in scoping, implementation, cutover, resourcing and
management.
LIVING WITH THE NEW HRIS (Changes in the HR User Community )
An integrated HRIS leads to more integrated
reporting of employee data, which can lead to efforts that benefit the company.
Better reporting of employee costs, skills and requirements, time-keeping and
recording, etc. give senior managers information that can be used to improve
the application of HR policy or to cut costs (i.e. reducing time-card fraud,
highlighting wasteful compensation practices, etc.). Most integrated HRIS
packages are very sophisticated in the functionality and processes they offer.
Compared to legacy,
27
MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM or screen-based/code-based systems, the new
HRIS requires a more analytical
user. The
user cannot simply be trained to put certain codes into certain fields --
he/she must know the business process and how it relates to the HRIS. In most
companies, a certain portion of users will be able to make this jump to
”analytical” thinking; others will not. The resulting shakeout has to happen,
and it is most often painful – either for the employees themselves or for the
HRIS support organization.
If a more centralized, integrated HR organization
doesn’t surface during the implementation period, the organization will tend to
evolve in that direction. An integrated, centralized HRIS tends to pull user
departments together. Using integrated work processes across departments that
do not operate under a common authority will highlight data and process
ownership issues. These issues in turn get pushed up to HR managers or
executive management. Eventually, these managers resolve the issues by
increasing the integration of the departments to match the processes. Either
way it happens – at implementation or via evolution -- this level of
organizational change is always difficult.
Supporting the HRIS
IT support analysts may be accustomed to, and only
skilled for, flat-file processing techniques. Most HRIS packages rely on
relational data models, higher-level programming languages, and interactive
data management – presenting technical requirements for which some IT analysts
may not be ready.
The new HRIS may have proprietary languages or
facilities, requiring new IT skills. Often these skills will be in high demand,
driving a premium rate of pay. Internal resources may opt to leave the company
for the higher pay, or they may
28
MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM demand higher pay at the company. The
higher pay might be outside the HR
guidelines for fair salary. The resulting dilemma
can create retention problems. HR users – the analysts in HR, payroll and
benefits – must take a more active role in ongoing support and system changes.
Since business rules are often coded into the HRIS instead of resting in manual
processes, the business analysts are necessarily drawn into this activity. Some
firms may push this “business rule” knowledge to their IT support analysts, or
rely on consultants who help with the implementation. Although either of those
scenarios can work, HR business analysts and managers have the most to lose if
the HRIS does not process transactions correctly. Placing HR analysts in system
support and change roles will help ensure that the HRIS processes transactions
correctly.
Some
companies depend too much on consulting firms or contractors to perform an
implementation. Many times this happens because the firm can pay a consultant
to do precisely what the firm wants to do, which is often easier than getting
internal resources to do the same thing. It takes some of the pain out of
change management. This can lead to a continued dependence on external
resources and might be acceptable for firms that have historically relied on
external resources. For others it may generate substantial internal conflict in
the way of higher IT budgets or continued presence of non-employees in the HRIS
support organization.
RECOMMENDATIONS
FOR SUCCESS
Given all the things that often do go wrong with
HRIS implementations, what can be done to ensure a smooth transition? There is
no one solution, no grand secret for avoiding all the problems. As with most
successful efforts, a successful HRIS implementation requires participation and
commitment from all areas of the firm. The first area from which to gain
commitment is the firm’s
29
MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM executive management – the sponsors of the
project. Given the level of change
such a
project will create, there will be areas that resist the implementation.
Support from executive management is invaluable for making sure new business
processes are implemented effectively, for funding the project, and for
ensuring appropriate staffing on the project team. Without this support, the
payoff of the new HRIS will most likely be compromised, and will cause
disruptions in employee service.
The executive managers should appoint a steering
committee containing stakeholders from all areas affected by the HRIS (payroll,
benefits, HR, IT, employee relations, etc). This group should contain members
who can ensure that their line managers have the necessary directives and
responsibilities for making the HRIS operational. The steering committee should
take an active role in resolving broad issues and taking corrective actions if
the project gets off course. One of the most important roles of the steering
committee is that of “winning the HR managers.” The steering committee needs to
ensure that managers fully understand the impact of a new HRIS system, that
they are involved in the implementation, and that they support the project with
a positive attitude towards change. This will not only set an example and
guideline for each committee member’s department, but also prepare the ground
for dealing with change-management issues. The steering committee should be
responsible for appointing a project manager or project management team, as
well as assuring that the project is appropriately staffed. The project manager
should carry out team-building exercises for employees who will have to work
together, since many people who will be assigned to the team may not have
experience operating in such an environment. The HR analysts and the technical
analysts must learn how to work together to solve issues neither group can
solve alone – such as data conversion and interfacing. HR analysts will become
more technical, and technical analysts will learn more about HR. The project
30
MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM planning process needs to include not only
the technical tasks but also the
processes
and deadlines for change management tasks. The project manager can get an
indication of these issues early in the project by comparing the goals of the
different stakeholders involved and identifying all the inconsistencies.
For those HR analysts who are placed on the HRIS
project team, their managers need to be fully aware of the analyst roles in the
project. Managers need to review and possibly redefine the roles before, during
and after the implementation. New job descriptions may need to be prepared and
managers need to brief employees about any changes and additional
responsibilities. Managers also must start back-filling the positions left by
the analysts to ensure their departments still run smoothly and the analysts are
not torn between working in their departments vs. working on the HRIS project.
Not every
person will be able to make the transition to a new HRIS. Certain employees –
payroll clerks, benefits analysts, IT support, and even managers -- may not
want anything to do with the new HRIS and the processes that come with it.
Instead of forcing them to make the transition, it is often wiser to place them
outside the HRIS-related organization in roles appropriate for their skills. A
transition plan needs to be constructed, and the steering committee must accept
the fact that there will be some turnover.
Likewise, employees who have demonstrated their
interest and ability to work with the new system and who have gained
substantial knowledge of it should be offered an active system-support role
together with a promotion. This should motivate other employees to follow their
colleagues’ paths and will discourage internal system experts leaving the
company for a higher-paying consulting job. Training – technical and non-technical
– must be identified and performed to help people make the transition to
working with the new HRIS and
31
MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM the new organization model. The training
needs to go beyond screen-prints and
mouse-clicking
sequences to an explanation of how the new process fits into the organization,
its relationship to other processes, and the execution steps in the process.
Employees will have to know the why as well as the how of the process.
Formalized
cross-functional support teams are essential to the steady operation of the
HRIS. Firms can be successful by patching together an informal organization of
HR analysts and IT analysts, but that loose-knit framework may not hold up to
the continued demands of HRIS support. A formalized, co-located team of HR and
IT analysts will be most effective.
Many firms also find it useful to preserve the
steering committee past HRIS implementation and into the productive life of the
HRIS. The steering committee is an excellent group to monitor the ongoing
quality of HRIS operations, manage relationships with the HRIS vendor, and
clear the path for later HRIS upgrades or enhancements.
It may take years for a firm to adjust to a new
HRIS. As it does, most will see that their organizational structure will tend
to reflect the HRIS structure. This is natural – managers for years have
organized their departments to fit the way work is done, and the organizational
culture often reflects that structure. When the way that work is done changes –
and an HRIS will engender that change – it’s natural for the organization to
change as well. Structural and cultural changes might be painful, and people
will resist, but it’s hard to fight these natural tendencies. Instead of
fighting them, managers need to be aware of what’s happening and proactively
prepare for this new world.
32
MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
SURVEY OF
SOFTWARE PACKAGES FOR HUMAN RESOURCE INFORMATION SYSTEMS INCLUDING ERP SOFTWARE
SUCH AS SAP, ORACLE FINANCIALS AND RAMCO MARSHALL:
ERP
Software Market will grow to USD 29 Billion in 2006
The ERP market continues to benefit from a
widespread acceptance of the idea that businesses must have integrated
information systems to be competitive. Management and IT organizations are
realizing that the most effective way to satisfy this need is to purchase an
ERP package that features broad functionality and pre-built integration.
The ERP
software market came into being in the early 1990s when companies realized they
had to integrate the databases and applications that drove their back offices,
their manufacturing floors, and their distribution operations. ERP software
expanded beyond manufacturers into healthcare, financial services, and other
businesses because the same kinds of problems, assembling a product, delivering
it, and charging for it, span all industries.
Just like
companies need to consolidate their business operations into one place, the
biggest ERP software vendors have been on a buying binge, and after all of the
acquisitions, the installed bases of ERP software are increasingly controlled
by a handful of players. Shepherd reckons that 66 percent of new ERP license
sales in 2006 will done by SAP and Oracle. SAP will have 43 percent, with
Oracle getting 23 percent. The next biggest player will be Sage Group, with
five percent, followed by Microsoft with four percent and Infor (which now owns
SSA Global) getting three percent.
33
MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
As the ERP methodology has become more popular,
software applications have emerged to help business managers implement ERP in
business activities such as inventory control, order tracking, customer
service, finance and human resources.
ERP
Software Services
Enterprise Resource Planning or ERP may be defined
as an information system that takes into account all related applications of an
enterprise and integrates all departments and functions across a company in a
single computer. There are a number of departments (finance, human resource,
production, etc) which form the backbone of the company. Each of these
departments has their own processes running. ERP integrates all the individual
processes of all individual departments into a single system.
Synapse is a
leading offshore software development company in India with a determined focus
on ERP software. We develop customized ERP software tailor made according to
the business needs of small, medium and large companies. At our state of art
software development facility, we have the perfect blend of expertise and
infrastructure that help us devise ERP software that are unique and confirms to
the highest standards for quality.
Their in-depth industry experience gives us the
ability to devise our software. In other words, their ERP software include a
vast range of business analysis and efficiency tools, and are user friendly.
They give special importance to navigation methods in their ERP software so
that users can easily find what they are looking for. However, the
"Enterprise Resource Planning" is the most common term that has been
used widely.
34
MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
Enterprise
Resource Planning systems (ERPs) integrate (or attempt to integrate) all data
and processes of an organization into a single unified system. A typical ERP
system will use multiple components of computer software and hardware to
achieve the integration. A key ingredient of most ERP systems is the use of a
single, unified database to store data for the various system modules. Examples
of modules in an ERP which formerly would have been stand-alone applications include:
Manufacturing, Supply Chain, Financials, CRM, Human Resources, and Warehouse
Management.
SAP
SAP, started in 1972 by five former IBM employees
in Mannheim, Germany, states that it is the world's largest inter-enterprise
software company and the world's fourth-largest independent software supplier,
overall. The original SAP idea was to provide customers with the ability to
interact with a common corporate database for a comprehensive range of
applications. Gradually, the applications have been assembled and today many
corporations, including IBM and Microsoft, are using SAP products to run their
own businesses.
SAP applications, built around their latest R/3
system, provide the capability to manage financial, asset, and cost accounting,
production operations and materials, personnel, plants, and archived documents.
The R/3 system runs on a number of platforms including Windows 2000 and uses
the client/server model. The latest version of R/3 includes a comprehensive
Internet-enabled package.
35
MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM
SAP has recently recast its product offerings
under a comprehensive Web interface, called mySAP.com, and added new e-business
applications, including customer relationship management (CRM) and supply chain
management (SCM).
In early 2001, SAP, a publicly traded company, had
21,500 employees in over 50 countries, and more than 30,000 installations. SAP
is turning its attention to small- and-medium sized businesses. A recent R/3
version was provided for IBM's AS/400 platform
SAP focus on SMEs
Having sold its wares to most of the world's
largest businesses, SAP now believes it has to tap into the small- and
midsized-business market to keep growing. The small-business software market is
estimated to be worth $10 billion a year worldwide, but SAP won't corner it
without a fight from more consumer-oriented rivals like Microsoft and IBM. As
if that competition weren't fierce enough, upstart companies like
Salesforce.com, Sage Group plc and Upshot (acquired last year by SAP rival
Siebel Systems) are grabbing a piece of the small-business market with products
they hope will squeeze SAP out.
Oracle
Financials
The Oracle E-Business Suite Financials family of
applications automates and streamlines all your financial business processes,
for enterprise-wide daily business intelligence that lets you make more
informed decisions, improve operations, and reduce costs. A unified data model
provides a single accurate view of all your financial information, including a
360-degree view of your
36
MBA-H4040 HUMAN RESOURCE INFORMATION SYSTEM customers. And Oracle Financials, running
on Oracle technology, gives you
industry-leading
performance and scalability.
Seamless Integration, Complete Flexibility Oracle
Financials is part of the Oracle E-Business Suite, integrating with other
E-Business Suite applications including Oracle marketing and Oracle Supply
Chain Management. Implement one or several application families—or implement
the complete Oracle E-Business Suite for the fastest way to high-quality
enterprise information.
Oracle eBusiness Suite
Oracle Applications is a collection of business
ERP (Enterprise Resource Planning) applications developed by Oracle
Corporation, which utilize their core RDBM database technology. Sometimes
referred to as Oracles "E-Business Suite", Oracle Applications
(currently in the 11i series version), contains several product lines such as
Oracle Financials, Oracle Logistics, Oracle HR, Oracle Sales, and others.
Within each product, there are several modules, each to be separately licensed.
Key technologies incorporated into the
applications are the Oracle database technologies, (RDBMS, PL/SQL, java, html, xml, engines), the "technology
stach" (Oracle Forms Server, Reports Server, Apache Web
Server, Discoverer, Jinitiator and (Sun Java).
Oracle developed the applications from a terminal
based VT220 interface to a client server model
in 10.7, only to drop this within the space of a year for the Network Computing
Architecture (NCA). This was a revolutionary concept exploiting the
internet/network and thin client computers.
37
