HR technology can be an impenetrable world for the non-techie. How do you get the systems you need, without shelling out for quickly obsolete products?
Remember when your trusty smartphone did everything you wanted? Not any more. Even if it’s only a few years old, it probably won’t work with the latest operating system, which means it won’t support the latest apps, which means it’s effectively a brick.
The tech world calls it planned obsolescence; everyone else calls it a major headache. When HR systems need changing or upgrading, it challenges their very way of working, and the bad news is that a lot of systems are about to become bricks. “Up and down the country companies are using solutions that have a time stamp,” says Chris Murray, head of HR technology at PwC. “They may not yet present burning platforms, but they will soon. Without planning for it, HR directors’ hands could be forced. It’s essential they understand their HR IT while they still have time to remedy it.”
He worries it puts HR professionals into difficult territory. “There’s a gap in knowledge about what the latest tech can do, both for HR and for the business as a whole,” he says. “In the past, legacy implementations didn’t tend to be HR’s responsibility, but now any tech decisions will be, and this means HR needs to step up to the plate.” But which suppliers to appoint; how to assess them; and even establishing if your needs are an upgrade or a complete overhaul are the sort of questions many find difficult to answer. Where do you begin?
Camilla Aitchison, HR director at Morgan Sindall Group, previously oversaw HR at a large logistics business, where she planned and implemented the replacement of an old ERP system for a SaaS (software as a service) model in 2012. “Our system had been customised and re-customised to the point it couldn’t keep going much longer. It was a completely new system or nothing.” As her knowledge of HR IT was limited, the only thing to do was her homework. “The HR team and I listed all the things we wanted an HR platform to do – mainly workflow automation – and then went to a number of suppliers to see if their expertise matched our list, including asking them to do a demo.”
For Aitchison, the deciding factor was suppliers’ ability to meet this list, although a close second was whether the system was easy to learn. “For us, this was almost as important as technical specification,” she says. “We wanted both HR and staff (through self service), to use this instinctively. Software is only effective if the system is actually used.”
For others, it may be the relationship with a supplier that’s important, or the ability to scale up as needed. But experienced HR directors all agree this means being prepared and not letting suppliers dictate your needs.
“We’ve definitely had to be firm with suppliers, and it’s taken the one we use a while to understand we’re not interested in their talent management module, for example,” says Martin Bloch Nielsen, director of group training at high street jewellery chain Pandora. “When we decided to upgrade two years ago our business demanded better e-learning – and that’s the path we’ve taken. We haven’t gone for extras because we don’t need any.”
Bloch Nielsen knew his solution needed to be cloud-based, but because he acknowledged he wasn’t an expert, he hired a consultant to ensure he got the best deal. “We now have a separate e-learning system for our 22,000 shop staff that’s not part of the system our 8,000 head office staff use, because their needs are different. Global HR know we have a shop solution if they want it, but global HR is young, so it suits the business that it’s just in the shops.”
Not fitting into the perfect world of suppliers is, he argues, the reality for many businesses. Suppliers may not like clients taking control this way, but Bloch Nielsen – who asked his supplier to redesign the interface to make finding training more simple – says HRDs should have “some technological insight,” so they don’t buy systems or functionality they won’t use or need.
Owen Davies, an HR IT consultant, agrees: “Suppliers will always push the functionality side of a project, but I would always suggest looking at suppliers from a value-based point of view. What are the performance gaps in your business the software needs to address?”
Perhaps counter-intuitively, Davies argues HR can be so preoccupied with longevity and scalability of systems, it forgets the ‘now’. “The tech is pretty much the same from supplier to supplier, so what HR really needs to focus on is business outcomes,” he says. “There’s still a lot to be said for HR updating and upgrading modules as they go along, rather than going for a big, all-singing, all-dancing replacement system. I’d easily choose business outcomes over ability of modules to plug simply into each other.”
Being practical is key, argues Murray. “Choosing technology is more than just about the tech itself,” he says. “Technology gives HR the opportunity to look at their whole business model – understanding what service delivery looks like, what HR’s cost base is, what information you can give the business that informs real-time decisions. Are HR directors really thinking about better service and efficiency when they’re looking at their IT needs? I would suggest not always.” He supports Davies’ views on immediacy: “Do you need a big tech change if you’re not changing your business equally? Can you just look at certain function areas first, and isolate these? A small project aligned to a clear vision will always be more successful.”
Bloch Nielsen was initially critical of his supplier for not linking training courses to staff performance and KPIs – something he’s since changed – while Aitchison says she was clear any system upgrade couldn’t just be a database. “I decided we were getting a business system, not an HR system,” she says. “It had to be something that could align the CEO’s organisational goals; if he wanted to look at absence, and which divisions they were highest in, he could.”
Get this wrong and Vance Kearney, HR director (EMEA) at Oracle, says you could experience a common fault – what he calls “over-buying.” He says: “I know it happens, because I’ve done it myself. In the 1990s I spent thousands buying an optical character recognition system, and spent huge time and effort re-categorising industry job specifications when a simple free text search option would have been a much simpler solution.
“The point is, delivering on high-level stuff is actually about getting lots of boring things done properly – like defining job structures and cost centres, so you know who is affecting your bottom line. Knowing what questions you want your tech to answer helps you define what your supplier shortlist looks like. Appraising what vendors do is suddenly a much more important task.”
According to Davies, when choosing providers, HR shouldn’t be shy about dictating terms. “I see contracts that set roll-out targets with penalties for missing them and with full payment being withheld until bugs have been ironed out,” he says. Aitchison adds: “I took advice from as many people in my network as possible. The biggest tip they gave me was not to bother transferring historical documents or terms and conditions. A new system soon creates its own data. You’ll waste a lot of time trying to input stuff that isn’t needed.”
Ultimately, both argue that choosing the right solution and supplier comes down to HR knowing the business and what’s best for it. This means taking control of the process. “Those who still say HR software decisions are for the CIO are not in control of their own destiny,” says Murray. “I’ve heard many CIOs say it’s a decision they could make, but the reality is that they don’t know about service delivery in HR. In setting the agenda for their software needs, HR absolutely has to take the lead.”
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Technology troubleshooter
Peta Fry, HR director at accountancy firm Monahans, on five pressing problems… and how to solve them
Translation
Problem Understanding the needs of the business, managers and employees, and translating the information to the provider and back again.
Solution Ensure the provider understands the language of your business, induct them and encourage them to meet directly with managers and employees.
Availability
Problem You may need more time than you anticipate.
Solution Scope out your key milestones and ask if you think an implementation will require a lot of explanation: it will save time later.
Patchy support
Problem Telephone/email support depends on the quality of the person at the other end.
Solution You may not always want to speak to support, but build the relationship; things can improve if you confront the issues.
Lack of flexibility
Problem Business changes and technology can’t adapt to meet your needs.
Solution Every organisation is different. If your organisation changes tack regularly, make sure the system you choose is scalable and flexible, and the supplier understands your needs.
Reporting
Problem The organisation wants management information, not just the standard reports.
Solution Understand what can be provided, what the expectations are, how info can be manipulated and the time factors involved.
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Player One
Helen Blackmore, HR manager at Blur Group, decided to take her business straight to the cloud last October
“Our decision-making was about how we, as HR, add value,” she says. “Our immediate needs were managing attrition and absence data, while our future needs concentrated on managing growth – we’ve gone from 40 to 80 employees in the last six months alone. Our software had to give us data back, as well as letting employees enter data of their own.
“We went to a host of providers, and some even offered free trials. We found other providers were quite blunt – not offering support to anyone with fewer than 1,000 staff – but my key question to them all was: ‘How are you going to support me when I’m using your product?’ That is where a difference exists.”
Blackmore admits her package hasn’t been fully rolled out: “We’ve deliberately launched core stuff first – the database and self-service. Appraisals and personal development comes next. Later still will be succession planning.”
Blackmore purposely brought in IT to validate HR’s choices. “What swung it for us was our supplier being able to meet the time constraints we set, and the good vibe we struck up with the account manager. We found some providers would quote good prices and support but then throw in extra surprises. Now it’s done, having this system is a way for HR to be at the heart of the business.”
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Player Two
Rebecca Mossman, HR director EMEA & APAC at employment screening provider HireRight, tackles common IT questions
How do I know I need a change?
Ask yourself if your current processes are efficient, if new software will cut down on administration time, if a new system will help to further streamline the HR function and free up time to work on strategy.
How do I choose a provider?
Consider outputs. What do you need to get out of the system? Does a new provider ensure admin time is kept to a minimum on tasks such as payroll, letter creation, reference requests, performance appraisals, screening, training, absence records and finance processes? It’s essential to test the system to ensure that, after training, it will be more efficient and effective. It also needs to be effortlessly customised to suit the needs of the business, while also continuing to protect all your IT security systems. Lastly, it needs to be cost-effective in order for it to be a worthwhile investment from the very beginning. A full cost-benefit analysis must take place.
Do I need a new solution or an upgrade?
The business direction must be assessed before making this decision. It’s also beneficial to review the capacity of the current system, including the costs to switch over versus the costs to upgrade.
Who makes the decision?
A collaborative approach is needed between HR and IT to decide on a system that meets the needs of both users and those integrating or upgrading the system. It should be up to IT to consider the integration to current systems and processes.
Can I make do with what I have?
Your system shouldn’t just be a data source of employee records, but the key to all areas of the business. If it isn’t, it might be worth changing your system or provider. You should ask several questions: Is the current system fit for purpose? Does it meet your needs as an HR team? What benefits will a new system bring? Do these benefits outweigh the cost? Is strategy in your team suffering through duplication?
The HR Software Show 2014 is held at Olympia, London on 18-19 June: cipd.co.uk/events/hr-software-show