by Hara Marks
So, you think you want to implement new HR software?
Maybe it's time for new software even if you're relatively satisfied
with your current system. HR consultant Tony Paton recommends you
start looking for a new system before your current one is broken.
But software is expensive and change is not always welcome. Once
you've assessed the need for new software, how do you convince the
boss to fund the search process for a new system? At the International
Association for HR Information Management's fall conference, "HR
in a dot.com World," Paton explained how to present an effective
business case so you can evaluate and finally purchase the perfect
HR IT system.
Knowing when to upgrade
HR information technology has a definite life
cycle Paton says. "The trick is to anticipate when your current
software performance is declining," he explains. Otherwise,
a decision on new software will be made while everyone is in panic
mode and objective decisions may be impossible.
What are the signs that your system is declining?
A combination of some of the following signs, according to Paton,
may indicate that you need to start searching for new HR software:
- You're considering hiring additional HR staff.
- The current system is seen as inflexible.
- Reporting is not on time and/or reports are
not meeting company needs.
- The technology is not current and/or supported.
- Employees have the perception that HR is not
responsive or provides poor service.
- There is a proliferation of islands of information.
Paton defines these islands as databases such as payroll, benefits,
and labor relations, which are not connected but could and ought
to be.
- The software vendor is out of (or going out
of) business.
To implement a new software system can take anywhere
from six months to three years, depending on the size of the company,
Paton says. "You should re-evaluate your software when it's
working best," and try and anticipate future troubles, he notes.
Cooperation on the project
HR cannot proceed with software selection on its
own. Paton recommends that representatives from the finance and
IT departments be included in the evaluation and selection team
-- and participate in writing the business case.
Finance is necessary to provide a cost-benefit
analysis, and IT must necessarily be involved to ensure the software's
compatibility within the company's operating system. Paton adds
that cooperation early in the process of selecting new software
helps avert later conflict. "If you make people part of the
decision-making process [evaluating and buying the software], they
are more likely to be helpful later in implementing and maintaining
the software."
The actual business case should be 30 to 40 pages
and include an executive summary, Paton suggests. "Remember
that your audience is the senior management team," he says.
"The purpose is to convince people that we are going to progress
to a 'go decision' on buying new software."
Objectives of the business case
The business case must be both informational and
persuasive, Paton says. Its four key objectives are:
- To provide information to management about
the software selection process and to help them establish its
priority in relation to other projects.
- To document the business implications that
will result from new software implementation.
- To identify specific objectives against which
progress and eventual success can be measured.
- To set out a plan and budget for the next phase
of the software selection project.
The writer of the business case is the project
manager who will eventually be in charge of the software evaluation
and selection process and is usually from HR, according to Paton.
Components of the business case
Paton outlines nine necessary components that
the business case must address if it is to successfully sell the
idea of new HR software evaluation.
Summary of investigation and recommendations.
This section must answer the expected question of Why should we
proceed with the project at this time? and should include specific
recommendations, such as software vendors to be evaluated.
Scope of the project. This should address
what business areas will be affected by the new HR software system.
Paton says it is important to emphasize that almost every part of
the business and everyone in the business will be affected. "Employees
should have access and responsibility," he says. "An HR
transaction is anything involving an employee ID, and the scope
of these is obviously beyond traditional HR functions."
Needs requirement assessment. A very brief
description of the current HR software system should be included
here. But more important to highlight are the problems with the
current method of operation, Paton says. For each problem, such
as "It takes too much time to generate reports," Paton
suggests including information on how new software or a new system
could alleviate the trouble. List the difficulties in order of urgency,
he also adds.
Alternatives and impact of inaction or delay.
In order to drive home the urgency of buying new software or upgrading
the current system, Paton urges the writer of the business case
to include information on the impact of delaying the upgrade. But
he also says that alternatives to a new system should be outlined,
such as staffing adjustments or replacing only parts of the software,
so that management does not feel it is being forced to accept a
complete overhaul.
Project justification. Paton says HR may
cite many factors that create a need for a new IT system. Three
of the main stressors are the continual shifts in legal and regulatory
compliance, changes in technology and changes in business procedures.
This section should also include benefits a new system will bring,
with specific examples, as well as cost-related considerations.
Relationship to corporate plans and IT systems.
This section should discuss how a new IT system can better integrate
with company wide IT systems. Lower operating costs and avoiding
future costs due to productivity increases are aspects that Paton
recommends including here.
Project risk considerations. No business
plan is credible without analysis of potential drawbacks. This section
should discuss unforeseen costs that may be incurred when software
is customized, implementation and maintenance costs that are subject
to change and more intangible risks such as obstruction from employees
and managers who are unwilling to deal with change.
Project costs and responsibilities. As
accurately as possible, include amounts for all aspects of the software
evaluation and selection project. Don't forget to include costs
for outside consultants, vendor meetings, new hardware necessary
for testing and estimates of the time involved.
The next phase. Sum up the business case,
Paton recommends, by showing where the software evaluation/selection
project will lead. Are you anticipating selecting an application
service provider (ASP)? Integrated HR/payroll system? Measurable
goals such as projected dates for the final selection of a new system
should be outlined. And finally, include a work plan for the implementation
of the new technologies.
Clearly, the HR, IT and Finance departments need
to work closely together to research the information needed to create
a business proposal for new HR software. Conduct an assessment of
the current situation, research new software possibilities, write
a sparkling business case and upper management will soon be thanking
you for the opportunity to overhaul the HR information technology.
This article is courtesy of HRWire. All rights reserved.
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