Strategies in Successful Implementation of an HRIS Project - Essay Example

Issues, Challenges and Strategies in Successful implementation of an HRIS Project Word Count - 2193 to Conclusion) Details: Instructor: College: University: Place, Date Table of Contents: List of Tables: Serial Number Hyperlink Table 1 Knowledge based HRIS for HRM (source: Martinsons. 1997) List of Figures: Serial Number Hyperlink Figure 1 Layers of HRIS system (Source: DeSanctis. 1998. p19) Figure 2 Factors affecting success of HRIS systems in an organization Abstract The role of Human Resources Management in the modern business era is changing from administrative & operations orientation to business, strategic & consulting orientation. This is because the modern era is largely dependent upon functional & business knowledge and its effective use in the markets to improve competitive advantages and hence enhance revenues & profitability whereby the human resources contribute significantly to the entire system. To deliver against such expectations in the changing roles, human resources management require immense support from the IT enabled HRIS (Human Resources Information System) that in turn captures & stores in-depth information about every employee of the company that can be retrieved by the HR managers to support their planning, administration, strategic decision making process, and control on employee activities. This article presents a critical analysis of the need for HRIS, features required in HRIS, design & acquisition issues, cost benefits, implementation issues and acceptance issues. 1.0 Introduction: Gardner and Lepak et al. (2003) presented that the new role of HR professionals is more of "strategic partners to the business" whereby they are expected to understand the business objectives of the organization and align the HR practices with the business goals defined to fulfil the objectives. Hence the business objectives expand into the HR objectives & related goals that are essentially defined to enhance employee contribution by providing them essential guidance, resources & support and to manage essential transformations & changes required in maintaining the fundamental culture of the organization. The authors argue that IT systems act as the catalyst for human resources professionals in achieving HR goals. 2.0 Nature and importance of HRIS as an integral part of Enterprise Resource Planning Enterprise Resource Planning systems integrate various functional (departmental) information systems across the company such that the information from all departments can be integrated and organized for unified MIS reporting to the senior management enabling them to take quick & effective decisions (Gupta & Kohli. 2006). Human Resources is one of the key departments of an organization and hence HRIS need to be an integral part of ERP. The key result areas for all employees are defined by their respective functional managers but closely monitored by the HR function by virtue of key performance indicators. Kaplan and Norton (1996) developed the balanced scorecard system that helps organizations to design & implement a performance measurement system in such a way that individual performance measures can be tangibly mapped with organizational performance. The author hereby argues that such an integrated framework requires the performance management system to be an integral part of the ERP such that performance appraisal cycles can be carried out by respective supervisors of the employees but human resources function can closely monitor the KPI metrics and map with other soft aspects of the individual in terms of punctuality, knowledge & skill enhancement, trainings, additional certifications achieved, etc. The integrated information of functional KPIs and soft aspects can help the HR function to assess the overall performance of the employees and identify employee development needs as well as take decisions on promotions, increments, rewards & recognitions. 3.0 Requirement Analysis for an HRIS To introduce the requirements of an HRIS the author hereby presents a small brief on lean management practices that were learnt from Japanese automobile industry. As presented by Lin & Hui (1999) such practices enhanced the skill utilization of people by rotating them into multiple jobs in such a way that the wastes (activities that do not contribute to customer deliverables & revenues) are reduced as much as possible. The lean management practices excited the entire world especially the services industries such that organization structures were changed to form shorter functional hierarchies emphasizing upon team work, multi-skills, flexible job responsibilities, participation, lateral communication, and problems searched & tackled at all levels. In modern world HRM frameworks are designed to achieve optimum return on employees for the share holders without compromising employee satisfaction, benefits, health & safety. Such a balanced approach requires lot of data capturing & analytics. Martinsons (1997) emphasized that the HRIS is a knowledge based framework comprising of the modules shown in table 1 below: Table 1: Knowledge based HRIS for HRM (source: Martinsons. 1997) The knowledge may be captured either by information entry forms specially designed for HR function or else from integrated systems having probes in the company wide ERP systems. Such a system may either have to be developed in house or else purchased off the shelf after carrying out analysis of what is most feasible for an organization. An empirical theory by DeSanctis (1998) presented three broad layers of HRIS in an organization as shown in figure 1 - Planning Layer (top), Managerial Decision Support (middle) and Operations & Record Keeping (bottom): Figure 1: Layers of HRIS system (Source: DeSanctis. 1998) The operations & record keeping layer is the widest framework in the HRIS system that maintains the employee database with details about employee demographics, skills, experience, position/role in the company, etc. and captures a number of employee related transactions carried out against various programs running in the organization - benefits, compensation, insurance, etc. This layer helps the HR operations team to execute all the transactions and generate MIS reports pertaining to employee attendance, productivity, accounting, vacancies, health & safety, etc. The outcome of all the operational modules in this layer supports the managerial decision support pertaining to employee performance measurement, skill inventory analysis, employee assignments, increments, promotions, bonuses, awards, etc. These decisions depend upon the accuracy of information captured in the operations & record keeping layer and hence can lead to dysfunctional behavioural consequences if the measurements are not accurate or else are not trusted by the employees to be accurate (Beer. 1981; Datar & Kulp. 2001). 4.0 System Design and Acquisition The first essential step in acquisition of HRIS application is to define the User & Software requirement specifications (URS & SRS). The documentation of the URS & SRS should be carried out after identifying process champions in the HR function and getting as many inputs as possible. Moreover, the expectations of employees & management should also be captured through questionnaires. This step requires in depth due-diligence to identify the need for the HRIS application (i.e., the impacts of not implementing the HRIS application), identify requirements, identify value to the business, identify impact of process changes/enhancements, assess the investments & returns, analyze & select best practices of HRIS in the same industry, and evaluate & establish a measurement criteria of benefits of HRIS. (Atrilogy Solutions Group, 2007). The URS should be documented by in-house HR personnel but SRS should be developed by an application consultant. SRS takes into account every aspect that shall contribute to the success of HRIS, viz., System features, Hardware features, Platform features, Communication features, Scalability aspects, Reliability aspects, Support aspects, etc (Gusdorf. 2006; CC Pace Systems, 2003). 5.0 Implementation issues In this section, the author presents the implementation issues of the HRIS application in an organization. 5.1 Vendor Selection and Management Once the SRS is completely documented, then the best Software Vendors that have developed HRIS applications dedicated to the domain of the organization's business should be invited and Request for Proposal (RFPs) circulated. Partnering with an HRIS vendor should be considered as transformational outsourcing in which an organization partners with a software company to achieve rapid, substantial & sustainable development to enhance enterprise performance (Jane. 2004). Hence, it is important to carry out detailed reference check before the vendor is selected. The suitable vendor should own the entire solution (and not just the software codes), have sound track record, and possess an experienced customization team. Any software will never be 100% complete in line with the SRS. Hence the applications satisfying a large percentage (say 80% or more) of the SRS requirements should be short-listed and if no application is able to meet the minimum percentage (say at least 60%) of the SRS requirements, then it is more feasible to get it developed. The organization should agree upon an implementation plan based on the requirements that are mapped with the URS & SRS. Ideally, it should be in the form of detailed agreement signed between the organization's HR leadership, IT Leadership and the application vendor. (Relevant Business Systems Inc. 2005) 5.2 Project Management Before the project begins, it is very important to clearly identify the areas where a feasibility of implementation doesn't exist and hence the project management team of the vendor should have adequate experience in bringing to table these finer details to enable the functional champions evaluate the impacts on business. If a compromise is not possible, the alternate vendor should be consulted. This is very important because some critical factors like infeasibility of compliance to laws & regulations may lead to scrapping of the project altogether. Gouws & Gouws (2004) argue that cost, schedule & functionality and three important aspects that need to be planned much in advance and balanced very effectively by the project manager. The project plan should be in the form of a Gantt chart whereby all the activities of the project should be planned with start dates, end dates, dependencies, resources required and risk assessment. The costing model of development efforts should be agreed with the vendor. The most popular one is the constructive costing model (COCOMO-II) is the most popular methodology of efforts estimation. 5.3 Development issues The development cycle of HRIS application should be as per a defined workflow comprising of requirements management (freezing URS & SRS before starting the development), coding standards & process, testing standards & process, acceptance standards & process and make-live process. Every Software development project follows a structured Software Development Life Cycle (SDLC). Normally, the Waterfall Model is preferred over Rapid Application Development (RAD) in critical software development like the HRIS system because Software Change management is very strictly governed such that the codes are frozen for further development in a component when transitioned into the testing stage. The recommended stages for SDLC in mission critical application development are - unit coding, unit testing, integration testing, functional testing, system testing, operational acceptance testing and make live. Software codes transitioning from one stage to another are managed via software change management. (Steele, 2001) 7.0 Post implementation issues Once the software application is implemented the roll out to the users requires effective change management, integration with the rest of organizational systems and establishing maintenance processes. 7.1 Change Management and user acceptance This stage requires HR function to act as change agents to lead the transformational change in the organization by virtue of implementation of the HRIS application. As described by Kotter (1995), the change agents need to map the transition path from old vision to new vision an remove all obstacles in the organization that may lead to non-acceptance by end users. End users don't care what underlying technology has been used in an HRIS system. Stone et al (2006) developed the following model of acceptance of HRIS system in an organization. Figure 2: Factors affecting success of HRIS systems in an organization Primarily the system should be able to map the individual values, goals & resources with those of the organization and tangibly able to map individual outcomes with organizational outcomes. The users should trust the decisions made with the help of the HRIS system that affects them directly - like increments, bonuses, rewards, promotions, etc. If they suspect that the system is prone to manipulations, they will never accept it irrespective of whatever technology has been used in the system. Hence, the software integration with all probes in the ERP needs to take care of fundamental requirements like security, data integrity, automation and accurate relationships among modules. (Datar & Kulp. 2001) 7.2 Maintenance The HRIS comprises of information management in multiple modules and hence the responsibilities within the HR function needs to be chalked out clearly. As described by DeSantis (1986) the primary roles in the HRIS system are - accuracy & security owner, report production & publishing owner, enhancement owner, data entry owner, owner for data presentation to top management, performance appraisal owner, system design owner, vendor management owner and computer resources owner. These ownerships need to be established after trainings & workshops by the application consultant that co-ordinated the implementation of the entire application. A lot of documentation is required for all the owners such that they are very clear about the policies & procedures related to their respective roles. 8.0 Conclusions In this essay the author presented a brief analysis of the need of HRIS, its integration with ERP system, and aspects related to its selection, development, project management, implementation and post implementation tasks. HRIS is viewed as the tool for proactive HR management such that the HR personnel are able to partner with the share holders to ensure that the individual outcomes can be tangibly related to organizational outcomes. Hence, the human resources management function of every organization need to deploy HRIS applications to take proactive steps towards hiring, retaining & nurturing the best talents to protect the organization from unwanted attritions, improve morale of employees, improve employee productivity and improve employee satisfaction that may lead to significant positive impacts on the business. Reference List: Beer, M (1981). Performance Appraisals - Dilemmas and Possibilities. Organizational Dynamics. 9 (3): 24-36. Datar, Srikant ,. Kulp and S. Cohen. (2001). Balancing Performance Measures. Journal of Accounting Research, 39(1): 88-92. DeSanctis, Gerardine. Human Resource Information Systems: A Current Assessment. 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The Software development Life Cycle: for small to medium database applications. p4-22. www.elucidata.com/refs/sdlc.pdf (accessed August 29, 2009) Stone, Dianna L. and Lukaszewski, Kimberly et al. (2006). Factors affecting the acceptance and effectiveness of electronic human resource systems. Human Resource Management Review. 16: 229-234 The ERP Selection process survival guide. Relevant Business Systems Inc. CA, USA. (2005) : 3-6. Read More