An HRIS, also known as a Human Resources Information System, or Human Resource Management System (HRMS), is the ultimate combination of Information Technology (IT) and Human Resources (HR). This article will explain how an HRIS works, how they relate to HR analytics, and how they can be successfully selected and implemented.
Traditional HRIS systems and HR Analytics – The Synergy
The Human Resource Information System has traditionally been based on the requirement of bookkeeping HR process records.
With the advent of a Relational Database Management System (RDBMS) & database management/programming in the mid-1980s, HRIS systems were gradually upgraded into HR workflow and decision-flow systems. This change meant that HRIS systems evolved from manual, transaction-based bookkeeping to semi-automating HR processes. A good example is the onboarding process, which could now be individually tailored and automatically triggered by the data points obtained in the recruitment process. 20 years ago, this was unthinkable.
Over the last half-decade, there has been an ever-increasing narrative built around people analytics. There have also been suggestions that people analytics and HRIS are contrasting approaches and need to be categorized separately. The fundamental difference between the two is in the reporting and logic flow. Traditional HRIS workflow is based on hard-coded business rules, whereas HR analytics is based on statistical modeling/machine learning applied to HR data.
However, HR analytics can augment a Human Resources Information System by improving the scope and accuracy of HR data analysis and HR decision making.
For example, estimating employee potential through hard-coded rules (like in an HRIS), such as attendance records, sales achieved, or certifications will be limited in terms of accuracy. However, using soft coded rules with HR analytics will enhance the quality of decision making in terms of gauging employee potential. Examples include unsupervised employee clustering, principal component analysis on correlating factors, or Organizaitonal Network Analysis (ONA) or Natural Language Processing (NLP) on social media records.
For that reason, the integration of analytics in the HRIS could transform an information and workflow management system to a cognitive HR decision-making system, enabling semi-automated HR.
To capitalize on this potential, HR analytics must be integrated with HRIS workflows. This can be done by either adding HR analytics as an additional module to the core HRIS system itself or through the seamless integration of third-party products, like Visier. Both need to work in tandem as a unified system, as illustrated in the figure below.
Cognitive Human Resource Management System (HRMS)
This is the approach that most of the top HRIS vendors are working with today. IBM, SAP, and Oracle are prime examples here.
HRIS Evaluation and Implementation roadmaps
The question is, how to get there. A good road-map would be organization-specific. Most businesses with a headcount of 50 or more would already have a basic system in place. This could be an macro-enabled HR record system in Excel, or an open-source system like Orange HRMS.
However, at some point, growing organizations will need a robust full-suite HRIS system for several reasons. These include:
- Better record keeping
- Improving quality of HR reporting
- Incorporating all functions of HR process
- Improving overall operational efficiency of HR
- Robust security/authentication of data/users
Pre-HRIS Product Selection criteria
When implementing a Human Resources Information System, there are a number of selection steps and criteria. The most important ones are listed below.
- Identifying user requirements and design criteria
- Price scoping of competing products
- Functionality scoping, including the specifics of reporting and metrics of competing products
- Vendor record & reputation analysis
- User and data security protocols/ compliance required
- Deep evaluation of customization and third-party integration of competing products
- Cost/time investment for the entire implementation lifecycle
- Post implementation support required
All of these steps are talked about in our course on digital HR strategy, where we include a module on HR technology implmenetation.
A typical implementation life cycle looks like the following:
Pre-HRIS Product Selection Process – Detailed Analysis
In order to define customer requirements, one can use a Quality Funcation Deployment, or QFD. QFD is a process and set of tools to define customer requirements and convert them into engeneering specifications. This tool can help in making a vendor selection by looking at requirements vs. time, money costs and end user experience.
In the Human Resources Information System selection context, QFD is a “system engineering approach” which helps transform the requirements of the customer (e.g. the HR department) into prerequisite features for the HRIS product.
It is essentially an “explicit quantitative and correlative method” on the functional HR requirements vs. required features in HRIS system. It then deploys weighting functions to prioritize parameters of HRIS product selection.
This aids in the selection and customization priorities of the HRIS product. The outcome of this analysis will be different based on unique requirements of every organization. A typical QFD for a mid-level firm would be:
Quality Function Deployment Map for HRIS implementation. On the basis of a QFD, the whole exercise could be summed up in terms of narrowing vendor section, setting negotiation terms, prioritizing modules and giving an overview of the implementation roadmap.
Post HRIS Product Selection – SIPOC Mapping
SIPOC mapping is a term from the Six Sigma discipline. It refers to Supplier, Input, Process, Output, and Customer. If we relate this to the HRIS implementation process, we get the following picture.
- Supplier: HRIS Vendor, implementation consultants, third party integration consultants, and compliance consultants
- Inputs: HRIS implementation process, application of expertise, customization & third party integration, beta testing
- Process: The process refers to the operational process of the HRIS, as described above
- Outputs: Implemented HRIS, fully trained staff, workflow digitalization, workflow automation, improved HR Efficiency
- Customer: HR department, employees, other organizational stakeholders, competitive leverage of the organization
These SIPOCs can differ per organization and projects. Make sure to identify them early on in the HRIS implementation process.
HRIS Implementation Lifecycle – Work Mapping Overview
The next step is to go over the different workstreams and map them. You will find an example of this below, where there is an evaluation workstream that includes requirement mapping and vendor demos. There is an implementation stream that includes scoping & palnning, and data integration, and so on.
Top HRIS vendors, pros, and pricing
According to the Sierra-Cedar 2017-2018 HR System Survey Whitepaper, for the mid (2,500-10,000) to large (10,000+) segment, the market leaders are SAP (SAP ECC HR, an on-premise HRIS, & SuccessFactors, a cloud-based HRIS), Workday, Oracle HRMS, and Kronos. Orange HRMS is the market leader in the free and open-source segment.
Most of the modules of the large segment players are actually separate systems sequentially acquired and integrated (often over the span of a decade or so) into a full-suite Human Resources Information System that we see today.
Major vendors typically cater to modules across the entire spectrum of HR processes, such as:
- Employee records
- Payroll & compensation management
- Performance management
- Succession Planning
- On and Off boarding
Modules for social networking, advanced workflow automation, and integrated analytics may also be a part of an HRIS system.
The difference between competing vendors lies in:
- Availability of modules across the entire spectrum of HR processes
- Varying emphasis on implementation approaches
- New technology adoption like analytics integration and automation
- Customization and integration capabilities
- GUI user experience
- Quality of Documentation
- Data & end-user security protocols
Companies like IBM and SAP offer integrated analytics modules. IBM is a pioneer in the cognitive HR space with its IBM Watson integration, allowing for powerful analytical capabilities. Watson is claimed to have the world’s most advanced AI engine, with specific boosts on natural language processing and computational linguistics. There is a possibility of its integration to virtually any data system in the world, including HRIS.
Only a few vendors still support on-premise HRIS system implementations (like SAP and Peoplesoft). A majority of production implementations are cloud-based SAAS models these days.
Pricing is usually a combination of the following:
- A negotiable fixed implementation cost
- A cost per total number of users
- A long-term support and upgrades cost
Smaller headcount is less of a limiting factor for HRIS adoption than it used to be. This is a direct result of dynamic pricing and the adoption of cloud-based approaches. Companies with a headcount of, for example, 100 to 150 employees can still receive this service.
We estimate a lot of segment consolidation in a year or two.
Project management of the implementation life-cycle
A typical implementation life-cycle can take from six months to a year. Every HRIS implementation requires HR process re-engineering. Concrete time maps are therefore seldom being adhered to. Furthermore, scoop creeps are a frequent affair.
As standard practice, project planning and scheduling is usually built on project management programs. Primavera or MS project being prime choices, after taking all key stakeholders on board.
Key Stakeholders are:
- The HRIS vendor
- Third party integration
- HR department
- Finance department
- Company leadership
- Even a subset of “influential” employees for the production testing and system approval
Some vendors may also have their own project management and implementation templates based on their own best practice consulting. However, please note that such implementation models are likely tilted towards the vendors’ business interest. It’s imperative to take due diligence and corroborate with finance before making the final decision.
The implementation process is usually a stepwise modular stage, with parallel tests beds, often known as “instances”, employed sequentially before adoption into production. Small-scale implementations may be much more rapid.
Requisite HR data identification, its availability, preprocessing of data and its migration is usually the first and the most taxing steps in an HRIS implementation life-cycle.
The employee records module is typically implemented first as many other HRIS modules feed on its data. This could be teamed up with a social networking module (for vendors who support it). This is particularly useful for large-scale implementations since it helps as a collaboration tool between stakeholders for project implementation.
The key profit-center focus for most HR departments has always been recruitment, which is one of the next frequently implemented modules. In my own experience, this module is often taken to production, before they go live with the complete HRIS suite. This is also used as a testbed for the vendors’ claim in efficiency, reduction in per-head-recruitment, and improving quality of recruitment. Major HRIS vendors today originally started off with the recruitment solutions.
Relevant modules to be implemented
Other key interest points of HR are:
- Performance evaluation
- Payroll- and compensation planning
- Workforce planning
- Succession planning
- Dedicated/integrated dashboards.
The decision of specific module implementation will depend on the headcount of the organization, HR policies and practices, long-term strategies and budget.
This is typically done through a comprehensive cost-, benefit-, and strategy-analysis. The vendor may also have best packages and road-maps, tailored to your organization.
Some of the modules (e.g., analytics and workflow automation) may also be implemented via third-party API integration. This makes it a disparate system. This necessitates the handling of different vendors, additional costs involved in integration and licensing, and potentially more complicated post-implementation support.
Other key aspects of a successful implementation
These were just a few of the key aspects of a successful implementation. Other key aspects are seen below:
Each organization must determine its unique features, work-flow process rules, event rules, metrics and reports that are important to their specific business. Smart system design to ensure optimum data quality is part of this.
Therefore, within module configuration and customization (e.g., feature incorporation, business logic, and workflow design), reporting components, formation, and intra-module integration typically take substantial time.
Most top vendors incorporate integrated platform components. This allows for standardization in object development across all modules. Identification and understanding capabilities of object development by operational HR will significantly impact project success. It is, therefore, a critical aspect.
However, over-customization could be expensive and counterproductive. Most vendors do have an out of the box pre-configured implementation suites. It is important to consider the cost-benefit analysis before extensive customizations.
Finally, security and integration protocols is another important aspect in HRIS implementation
Every major HRIS implementation necessitates change management and process engineering in HR. Therefore, scoop creeps and even internal resistance are likely to be a part of major implementation life-cycle.
It is important to identify the personnel in charge of project ownership and enable them with improved decision making. Senior management and finance should also be brought on board, along with all other senior stakeholders. They can all be used as part of the steering group.
Plans, once decided, need to be adhered to as close as possible. There needs to be frequent integrations and meetings synchronized along the sequential progress of the implementation. It is also important to monitor the gradual improvement and efficiency of the HR process parallel to the “Go Live” of the HRIS system.
Implementing a Human Resource Information System successfully is a complex process. We hope this article provided you with insight into the different steps involved.
Special thanks to Sunil Meheria, a seasoned Oracle HRIS consultant, for his contributions to the article