The era of cloud-based HR information systems (HRIS) has dawned and is disrupting the way organisations deal with their people and HR processes. With providers like Workday and SuccessFactors rapidly gaining popularity, traditional on-site solutions are losing market share. There are also smaller providers popping up eager to capitalise on the shift and make a name for themselves with a myriad of appealing functions, features, bells, and whistles.
Considering the barrage of information, technical specifications and talented sales folk that abound, picking a new HR system for your business can be frustratingly trying, especially if it is the first time delving into cloud-based solutions. Be prepared that you are probably going to be overwhelmed by the vast number of options available. The Internet will give you mountains of content on the subject, and consulting companies like Gartner can help make sense of it all or at very least provide some valuable pointers on the best solutions. Be that as it may, cloud-based HR systems are not ‘one size fits all’ – far from it.
Why consider a cloud-based HRIS solution?
The UK economy has changed dramatically over recent years from relatively stable employment in the public or private sector to an increased reliance on temporary or contracted labour. The on-demand or contingent workforce (or gig economy) has grown. Freelancers are relying on websites and apps to connect them with paying jobs. Today’s contingent workforce includes highly skilled specialists and consultants in nearly every industry. Large corporations are continually hiring more flexible, contingent workers to fill their staff. The contingent workforce is growing at a phenomenal rate in the UK and is showing no signs of slowing down, so your HRIS solution will need functionality to accommodate and make the most of this new way of building teams.
What’s more, think about your business case; what drove your decision to invest in a new system? You might be a multi-national player, or maybe you are part of a merger, and you need uniformity in the way work gets done. Alternatively, like so many of us, your motivation is borne by a need to drive process efficiencies and cost savings. Perhaps you want to avoid the continual justifications of additional payments to upgrade to the freshest version of your present on-site system.
Whatever your motivation you will have to recognise what’s essential for your organisation. Consider where you need to be in five years – what do you require from an HR system to get you there? Decide a list of criteria and agree on your ‘must haves’ versus ‘nice-to-haves’ and then use these measures to assess and stress test your options. Experience with repeated installations has demonstrated some key success factors. The right solution for your business can make a huge impact on your HR operations, so here’s a rundown of critical success factors you ought to consider while figuring out what you require from a cloud-based HR system.
#1 What does it need to do?
Again and again, people neglect the core functionality of a system and are enthused by new and energising tech. What you require is an industry-specific system that has the functionality and features for your particular business necessities. Consider the information you have and the uses you require and make decisions accordingly. You may need core HR functions, calendar, talent performance, and options for scalability; however, video support and e-learning management may be less critical and unlikely to become more critical anytime soon. If you over spec, you will be paying more than you have to and for little extra benefit.
#2 What else could it do?
Cloud-based HRIS like Workday offers an all-in-one solution where you purchase all modules up front. Others, such as SuccessFactors, are more modular. A modular approach can be sensible if your current needs are more specific, for example, if Talent Management and HR Analytics are your primary areas of focus, for now, begin with these modules, and add more modules after some time. Pick the most suitable option for your needs. Ensure you also consider variations in how your business works. You may have a consistent method for operating across the company, or in driving uniformity, all team members require compatible devices and system functionality. Alternatively, then again perhaps you need greater flexibility to account for operational differences across countries or divisions.
#3 how much will it cost?
Price certainty is regularly a driver for investigating cloud-based options versus more conventional ERP on-site solutions. With a traditional system, you typically pay more for upgrades or new features. With most cloud-based solutions, you pay a set permit expense, which incorporates customary updates. Does this work for your business?Expenses do differ across cloud HRIS platforms and feature modules, so you will need to make a cross-feature comparison to benchmark specific costs accordingly.
#4 is it the right culture fit?
Cultural fit, although often overlooked, is essential to understand. When you pick a new solution, you are additionally choosing a vendor, so you need to know that you can work with them: that their values and beliefs fit with yours, and that you get along with their people. When ensuring a cultural match, it is worth investing time with vendors to get to know them and their offering. Call meetings with your short list of potential vendors and have them demo their software to you. Ask for a few references to find out how their solutions have worked for other organisations in your industry. You can then gather information about aces and spaces, as well as any headaches during implementation and bugbears of users. If the vendor cannot give you references, there should be alarm bells ringing, unless you are prepared to be a guinea pig or the benefits of the functional innovations far outweigh the potential frustrations that anyone could expect when shaking down a new system. You also need to understand their service offering. How much help will the chosen vendor give to implementation, and throughout the life of the contract? Cloud solutions are updated much more regularly than conventional on-site software, and a few vendors will be better at giving on-going support than others. Also bear in mind that a few suppliers may be better suited to particular industries, so look into what which sectors they work and don’t be afraid to ask around.
#5 will your existing tech cope?
A cloud-based system is not a simple ‘plug and play’ solution, so it is smart to include your tech groups in the evaluation process. A new tool will have numerous ramifications throughout your business, requiring a considerable measure of work from your IT and tech teams. You will have to consider how simple it will be to interface with existing systems in the business. Would you be able to integrate it with financial data for reporting? Does it support how you control information access and data security across your organisation globally?
#6 implementation and integration
Once you have signed up for a new system, the hard work truly begins. New HRIS solutions will affect the entire business. It may need to be, or benefit from being, integrated with other systems in your business, for instance learning management, payroll, data analysis, and financial control systems.
The majority of solutions will require a third party Systems Integrator (SI) to set up and configure the system. So success is not just down to buying the right system solution, you will need to choose the right SI to manage the integration. Know that gone are the days when only the HR group were privy to using it. Many modern HR solutions offer user self-service functionality, allowing employees to book leave, or update their contact details for example. So your workforce will need to be trained on how to use it so a tried and tested user experience design may mean the pace of engagement is considerably quicker.
#7 getting people using it
Past the planning and implementation, you will need to ensure everybody in the business that needs it or could benefit from it uses the solution you pick and are using it to the full extent of its functionality. Numerous vendors will discuss ROI concerning time to value. However, it is about how well users interact with it. You want to limit any disruption to workflows, so you will need to think about how you can successfully deploy a new system that will create engagement and keep utilisation levels high. Change management activity will have an essential impact in getting your workforce on board and engaged with the platform. Communication and straightforwardness about the reasons behind the move to a new system will be critical. Likewise, you will need to choose your support structure inside the business – who will be responsible for maintenance issues and for reporting on ROI?
The solution you pick will significantly affect your business. If you select the wrong one, you will need to live with it for the term of your agreement. Cloud-based choices guarantee an easy to use solution, yet deciding the best one for your business can be a daunting process. With a sound understanding of your people, processes, and what you are trying to achieve, you will be better prepared to stress test solutions and come to the right decision for your business.
Considering each these checkpoints will get you on the right track. If you would like assistance to bring together insight, benchmark data, problem-solving methodologies and hands-on experience to improve the return on your HRIS investment, please don’t hesitate to get in touch with me.
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About Karl Wood
Karl is a global HR and employment professional who has an impeccable record in delivering HR solutions for industry leading firms. Karl champions ideas that promote growth, profit and a positive organisational identity and sits on the Executive Board of WINC. Read more blogs by Karl.