1.

Define your HR software needs Anything you read on selecting any software application including human resource software, HRIS, or HRMS applications is going to tell you to define your needs first; but I am going to define what this means and why it is important. You need to be highly detailed with defining your needs. The more detail you put into what I consider the most important step of the process of selecting an HR software application, the more likely you will make the right decision in the end. For example, a typical company might determine their needs for an HR software application to include the following: Windows based Integrated Payroll Training Management Turnover Reports ESS Salary Grades Job and Pay History Attendance and Accrual tracking Report Writing Ease of use

This is a start but not nearly enough detail. There are over 60 companies offering HRIS software vendors in North America. If you take this list to all of those HR software vendors, more than half are going to meet your HR software needs.

2. Create a detailed HR Software requirements spreadsheet Now that you have a highly detailed HRIS, HRMS or HR software needs list, the next thing to create is an Excel spreadsheet with these needs which you will use during your evaluation process. List the needs down the left side and across the top you will add the various vendors as you determine which you will look at. You might want to add rows for the price, purchase options, and implementation time lines and costs to further aid with keeping all the systems separate. As you evaluate each system, simply check off which meets each of your Human Resource software needs. At the end of the evaluation process you wont have to struggle to remember which product did what. Again, take a look at our HRIS selection tool as a starting guide of the features and options that are available. You may want to do as we have done on the product page comparisons and show which products meet a certain need using third party applications in addition to the core system. You may have to work with third parties to meet all your needs or you may select to work with only companies that provide your requirements with their base systems. The issue with meeting needs using third party applications is how tight the integration is between the systems. If the systems are not integrated, you may have to work with interfaces or double input data into each application. If a vendor offers a third party product to meet a need or requirement, make sure to ask how the two applications will speak to each other.

Heres an HRIS Software Requirements Spreadsheet example: Vendor A Yes Yes Yes Yes Yes Standard Unlimited Could be custom created No Vendor B Third Party Yes No No Yes Standard Unlimited Third Party Yes

Integrated HR & Payroll Attendance Tracking Training Management Training requirements Turnover Reports Standard or Custom Job and Pay history Interfaces To GL From Time Clock Prices Software Annual Support Implementation days Implementation cost Total Costs Monthly Costs Option Cost

3. Determine your HR Software budget Before you waste your time searching for an HRIS, HRMS or HR software application you need to determine how much you will be able to spend on a system. Over the years I have performed close to a thousand demos of HR software applications. Of those, maybe at most 30% ended up getting the approval for a system. The other 70% were often, and incorrectly, seen as a cost center by management unworthy of a large investment needed to make HR run smoother. If you involve other departments such as risk management, training, and accounting in your HR selection process and list of needs, it may be possible that their budgets can add to the amount you will be able to spend for an HR software application. At the very least, involving other departments will showcase how an HRIS application will meet more organizational goals. When you determine how much you will be able to spend, include a total as well as a monthly amount. Management may be more inclined to purchase an HR software application if the payment for such is not made all at the front end of the project. There

are a number of HR software solutions that offer hosted options. You pay so much per month per employee and they host the application on the web. I have seen the prices from the $2 to $10 per employee per month and above. If hosting is not an option, you can always lease the software for up to five years. In this case, you spread the initial payment over that time frame and at the end of the lease term only owe on annual support.

4. Pick four or five HR Software vendors to review Now that you have defined your needs, requirements, and budget, you are ready to select the short list of HRIS, HRMS or HR software vendors to evaluate. You only need to evaluate those products you have the budget for and that meet your needs and requirements. This is not an easy task. As I mentioned before, I have personally found there are over 60 companies HRIS software vendors just in North America. Now thats just companies offering HRIS. If you want to add all HR software, outsourcing companies and companies offering add-ons, multiply the above number by 100. There are a few ways you could go about picking these companies. You can start the time consuming process of searching the web, ask fellow HR personnel, speak with fellow SHRM members, or post for recommendations on various HR message boards, forums, or blogs.

5. Time to View HR Software Demos You will want to setup either online or on-site demos with each HR software vendor you plan on evaluating. Have your needs spreadsheet in hand and score each product on how well they meet your needs. Each vendor is going to show you where they HR software is the strongest. Where their strengths lie may, or may not, match up to your needs. Make sure that in the demo you are seeing exactly the capabilities you need or require. You might want to create a brief set of questions for the vendor to provide answers to further assist you with completing your spreadsheet; since it is unlikely you will be able to cover all of the needs you have identified. 6. Research each HR Software company At this point, you should have arrived at a shorter list of HRIS, HRMS or HR software applications meeting your needs and requirements. If you started out viewing four or five systems, you will likely have it narrowed down to two or three at this point. Price will certainly be a determining factor in your final decision but there are other questions you should ask before considering the price. How long have they been in business? How many installs do they have? I have included the answer to both of these questions on our Products Page for each of 4

our participating vendors. The answer to these questions goes a long way toward establishing how stable the vendor and the product are. I would never recommend purchasing any business software application from any organization with a small number of years in business and a small number of installs. You dont know if that company will be in business a year from now or if they have actually had their product on the market long enough to have worked out the bugs. References Ask around at your local SHRM chapter or via on-line forums, message boards or blogs if anyone is using the product and has an opinion? You can always ask the vendor for references but they will, of course, only be supplying you with customers who have agreed to speak with you and are pleased with the application. If you are going to seek references and plan to contact them, realize that the reference was handpicked. Additional Articles you may find helpful: Checking References Why number of installs and years in business is important Should you purchase from a VAR? Functionality or Ease of Use?

7. HR software implementation expectations & Price When you decide on an HRIS, HRMS or HR software application, you will want to know what its going to cost you. The cost for software and support are all going to be fixed

costs. You will know exactly what you are paying and those amounts wont change. The only variable cost associated with an HRIS system install is going to be the implementation costs. Some vendors may provide fixed cost project costing but even these projects can run over budget if the scope of the project was not fully defined. It is extremely important that you define the scope of the project in as much detail as possible. In order to assist customers with this process, in my consulting practice we provided a table to what is offered, shown below. This is from a proposal for one of our clients who selected a HRIS system for a 1200 employee company. If your vendors dont provide this type of detail for their consulting costs, ask them to. TASK
System Installation HR System Setup and Configuration User Training

Low Hrs
4

High Hrs
6

Most Likely
6

Comments
Install new modules on server and user workstations Define codes and tables, define and setup custom screens Small Group, client specific, process oriented from new hire to termination to meet HR needs while supporting payroll processing.

8 4

12 6

12 4

Attendance Module Setup and Configuration User Training

4 4

6 6

4 4

Define and input attendance plans Small group, client specific, process oriented to record and manage time off plans.

PR System Setup Setup and Configuration

24

36

24

Test Payroll First Parallel Payroll Second Parallel Payroll Quarter/Year-end Closeout Go Live User Training

8 16 8 4 8 8

12 24 12 8 12 12

8 24 12 8 8 8

Understand GL accounts, Define earning, deduction and tax tables that support the GL structure. Input all tables and configure for proper tax treatment. Clean out old payroll data. Small test payroll to prove out the setup Full parallel with full reconciliation Full parallel with full reconciliation Cover all aspects of Quarter/Year end closing Support first live payroll Small group, client specific, process oriented covering all day-to-day operations and complete payroll processing. Not Included Not Included

Training Admin. System Recruiting Solution Email Alerts

Setup and Configuration User Training

8 4

24 6

16 4

Install system, configure with standard alerts. Some custom alerts possible. Train to turn alerts on and off and to modify alerts and create simple alerts.

ESS Setup and Configuration User Training Benefits Messenger Setup and Configuration User Training Project Management Project Team Meetings, coordinate team activities Maintain Project Plan Garn and ACH Estimated Hours Day equivalent

8 4

10 8

8 8

Configure ESS. Train Administrators

4 4

8 8

4 4

Configure BE. Train Administrator

8 8 8 164 20.5

16 16 16 264 33

12 8 8 194 24.25

With the amount of detail for this information, it is highly unlikely that the project would end up being over budget. If it does, you and the consultant will be able to quickly determine exactly where things went wrong. Additional articles on HRIS implementations you may find helpful: HRIS Implementation Tips HRIS Training Options Who will perform your Implementation? HRIS Tech Support Self Supporting Your HRIS Can you implement it yourself? Interfaces versus Integration How much Input is required? Wh y it s so hard to get a price on HRIS

9. Make your decision At this point, you have become an expert in selecting an HRIS, HRMS or HR software application. You defined your needs, you selected the vendors meeting those needs and continued to shorten your list based on price, capabilities and company strength. Now it is time to make the final decision. Based on everything you have done up to this point, and added, with your handy spreadsheet this is the easy part.

Let me give you a tip. Those who dont ask for HR Software discounts dont get HR Software discounts. 10. Getting management approval for your HR Software Just when you thought the whole process was over, the next step can be the toughest for many. I hope getting management approval ends up being your easy task. If its not, see if the advice below helps with the process. Involving others in the process We mentioned earlier that you should involve as many people as possible in the HRIS, HRMS or HR software selection process and needs assessment. When you go seeking approval, you can make a stronger case for an HRIS if its benefiting more than only the human resource department. A product that benefits two or three departments, and current employees, offers greater value than a system that only benefits an HR department that, sadly, by many companies is still seen as a cost department. If the application benefits the training department, risk management, accounting and HR departments and offers greater service to managers and employees, it has more benefit to the company on the whole. It may also be possible to have those other departments chip in budget dollars for the project. Cost justifying There are many articles on the web relating to cost justifying an HRIS, HRMS or HR software application. I have yet to find any that do a good job with the difficult process of cost justifying an HR application. There are certain HR options that are easier to cost justify than others. Online recruiting options, for example, may directly reduce the need to use outside recruiters or temp services. This product can offer a direct hard cost savings. Payroll is the same way. If you are paying X dollars for your existing payroll only, outsourced option and you bring it in for less and offer an HR application there is a direct savings that can be shown. With an HR employee database, it is far more difficult to show hard cost savings. Yes, it will save HR tremendous amounts of time but does that savings of time equate to hard cost savings? Yes, an HR ESS product will provide greater service to managers and employees but again does it provide direct hard cost savings? Its easy to understand the difficulty of creating an ROI statement for an HR application. What is the value add or your HR Software?

Since we have shown it is difficult to show hard cost savings with the implementation of an HRIS application, it is important instead to focus on the value add of the application. This approach requires your HR department to think about business objectives, issues and problems and show how an HR application will help the overall organization provide solutions to these objectives, issues and problems. How will an HR system assist the organization with doing a better job of reaching critical business objectives is the question that needs to be answered. The degree of success you have with this answer will likely determine your success or failure in gaining the approval you seek. Additional Articles on getting management approval: HRIS Justification Selling HRIS Software is Hard! Making A case for a new HRIS HRIS Justification Metrics HR Can become a Profit Center with HRMS Technology

Additional Assistance If you have any questions on what is outlined in this article, dont hesitate to call us at 727-596-6088 or email me at D.Scroggin@CompareHRIS.com. We wish you luck with your selection of an HRIS application. We sincerely hope our web site and this document have helped you in your search. Let us know if there is anything we can do to provide greater assistance. By Clay C. Scroggin