Issues, Challenges and Strategies in Successful Implementation of an HRIS Project - Essay Example

 Abstract The main objective of this paper lies in discussing the relationship between the Human Resource Management (HRM) and Human Resource Information System (HRIS), and how both would fit into effective organizational performance. In general sense, HRIS is the electronic means of storing organizational documents which provides instant access to organization’s HR information. HRIS is highly useful for an organization in its decision making process. It is also an integral part of a company’s Enterprise Resource Planning (ERP). In order to be competitive, organizations need to have timely and accurate information about their resources and assets. Employee recruitment, retention and motivation are the significant factors that determine the productivity and growth of companies. Hence, immediate access to information regarding the potential candidates and current human resource capital is essential for the effective functioning of a firm. Human resource is the most valuable asset of every firm. HRIS is the recent development which has been widely accepted in organizational functions. However, careful analysis and strategic approach is essential to meet the subsequent issues and challenges. Issues, Challenges, and Strategies in Successful Implementation of an HRIS Project Introduction The past few decades have witnessed tremendous changes and innovations in the infrastructure and HR management functions of organizations. Scientific approach and technological advancement have intensified business operations more than ever before. Modern organizations pay great attention to employee retention and other HR functions. Modern technological backup has enabled companies to store every valuable data regarding the employees in its specially designed software. This information system is highly integrated with the enterprise planning (ERP) of a company. The complexity of data collection, reporting, and analysis can be resolved by the effective implementation of HRIS. It not only helps the HR decision making process but also ensures the company’s legal compliance by maintaining and updating every piece of information. In addition to the advantages of HRIS, I tend to discuss certain challenges and issues that are associated with the implementation of an HRIS project. Enterprise Resource Planning (ERP) and HRIS ERP is the broad system that integrates all information and process in an organization such as manufacturing, HR, supply, financials, customer relations etc; whereas, HRIS is exclusively meant for Human Resource information. When a company plans its ERP project, it must include each and every piece of information related to its overall function. Moreover, as compared to other areas of interests, Human Resource information is the inevitable part of the ERP project. It is not a mere process of transferring the employee data from paper to web based system, but is intended to use the information as a decision making tool in all its administrative functions. ‘An HRIS can support strategic decision making, help the organization avoid lawsuits, provide data for evaluating programs or policies, and support day-to-day HR decisions. A computer system used to acquire, store, manipulate, analyze, retrieve, and distribute information related to an organization’s HR’ (Noe R A, 2004). HRIS maintains the information regarding the employee performance report, salary statement, personal file; applicant tracking etc. The objective of ERP is the total integration of the business including the greater customer satisfaction, reduced manufacturing cost, improved service etc. However, the method of implementation is the most important factor that determines the effect of the HRIS. As in Garson & Khosrow-Pour (2008, p.147), the implementation of effective HRIS would reduce response time to serve customers and clients, improves the quality and timeliness of service to employees, improves the quality of HR services to employees, and makes HR more responsive to customers. A company with outstanding HRIS does not inevitably gain success unless it draws the maximum benefit from the system. According to Kesler (2000), the role of HR is largely aimed at translating growth strategies into growth capabilities and those capabilities are the most logical bridge between the business growth plan and HR priorities. Management support and the acceptability of the system is highly significant factor in the implementation of an HRIS. HRIS is the integral part of enterprise planning because the overall achievement of the firm is determined by the human resource performance and its efficacy. The greater HR alignment and management functions obviously lead the organization to success. In order to identify the potentiality and weakness of the HR and to resolve the problems and inadequacy, management should have the instant access to the related information. Hence, without designing a proper HRIS, a company can not complete its Enterprise Resource Plan. The significance of Needs Analysis in HRIS The term needs analysis indicates the process of collecting the HR requirement data from within the organization. Prior to the design and development of an HRIS, a careful analysis is essential to identify the various needs of the firm’s human resource. It is a multifaceted process including long term as well as short term plans. If the system makers fail to conduct a good analysis, the system will not meet the intended goal. Long term plan would help to anticipate the possible technological changes and subsequent troubles. Short term plan also is important to identify the areas where immediate solution is required. Needs analysis is not a process that ends with the initial stage of the project; instead, it lasts until the implementation of the program. Needs analysts would scrutinize the strength and weakness of current system to determine if any of the programs could be continued. In this context, as Kavangh & Thite (2009) state, enforcement of Phase Containment i.e. identifying the problems as early as possible and to deal with them is important. According to the authors, an effective ‘needs analysis’ can be done by asking and answering three major questions; The chart below illustrates the 3 questions and there objectives; 1 Where are we now? Status of current system, their weakness, effectiveness, problems and issues 2 Where we need to go? Clearly defined goals, objectives 3 How are we going to get there? Strategies, solutions, method of implementation (Source: Kavanagh & Thite, 2009). System design & acquisition issues Most of the organizations confront with problems related to a proper system design and acquisition. Therefore it is the area where they need to hire the assistance of some professionals and vendor experts. The HRIS project manager should have the up-to-date technical and professional knowledge because system development and implementation are the significant stages of the HRIS project where specialized understanding is needed. Today HR systems are ready with information management facilities, tools produced to customize forms, reports and server performance. These tools are applicable for human resources, financials, goods and documents management (Litwin, Morzy & Vossen, 1998). I tend to support the view that organizations must hire support from outsourcing agencies for designing and implementing the HRIS project. There are certain factors that make this a better choice. First, professionals will have the sufficient knowledge about the vendors and reliable software available in the market. However, the unique combination of strategies, market factors, and the life cycle stage of a given company and its existing capabilities will determine what type of design is appropriate (Kates A, Kates D., 2006). Further, an external expert can make an impartial evaluation about the existing system and the influence of any kind of personal interests can be avoided. Although some managers are afraid of data privacy issues, vendor selection, planning, and development should be entrusted to external faculties. In order to ensure the privacy, organization has to determine the limit of external involvement. System programming and maintaining need to be separated in order to prevent deliberate insert of vulnerabilities in the system. (Torres-Coronas, Arias-Oliva, 2008 p.473). The conflicts of interests usually occur at the time of vendor selection and implementation. To deal with such situations, organization should make an assessment about the acceptability attitude of the managers, staff and other employees prior to the design and development of the project (Wilson-Evered, Hartel, Hingston, Whitman & Laing, 2003). In the same way there should be clear idea about the areas that the system should cover. Integration can be sometimes time consuming and costly if the huge systems like ERP and HRIS are evolved with their own architectural features that were designed to optimize transactions within the system, rather than between the tools and other systems (Reynolds, Weiner, 2009). Implementation and Maintenance Issues For small companies the effective implementation of HRIS might be comparatively difficult because there are several costs associated with implementing HRIS. For example, software license, hardware, implementation consulting and training are expensive (Chen J S, 2007). Although companies expect to increase the productivity and reduce the costs by implementing HRIS, it alone does not bring the anticipated benefits. The organizational environment is an important factor in this aspect. For the successful implementation of HRIS, sufficiently mature IT environment is essential. In addition to this, systems relevant personnel have to be trained for the efficient and consistent use of HRIS and enterprise resource planning (ERP) (Torres-Coronas, Arias-Oliva, 2008). Moreover, irrespective of the size and structure of the organization, there are certain factors that should comply with the ethical perspectives of a company. As Budhwa & Bhatnagar (2009 p.227) suggest, tools such as competency mapping, performance appraisal, and potential assessment, learning and development, checking for recruitment need fit with the core values of the organization. A system, in which these values are not considered, inevitably spoils the employee-employer relationship. The HRIS implemented in such an environment will not enhance the HR motivation; and moreover, the management personnel would loose his role-significance. Instead of blend of diverse activities, the HR department must be a broad-based integration of basic marketing, manufacturing and finance activities in order to have an effective utilization of the company’s human resources (Thierauf, 1997). Team work is the essential element with HRM in every organization. Inappropriate implementation and system maintenance will adversely affect the teamwork and the concept of leadership becomes irrelevant. If the communication is not effective in a firm it would adversely affect the production, supply, customer feedback and the relationship between the members of the organization. Some researchers doubt the HRIS outsourcing for it may result in reduced effectiveness in other areas of human resources due to communications problems. The main problem possibility is with the coordination. Lever S (1997) believes that it may reduce effectiveness between outsourced functions and point to the value of consolidating outsourced activities under a single vendor when HRIS is involved. To make the communication effective, group activities, structural changes and healthy interactions are important. Inappropriate system management would lead to centralized HR management in profit-driven companies because they focus excessively on individuals and categorize them on their performance base. “Obviously, having an advanced HRIS is a building block and an aid in becoming a strategic partner, but it is not a guarantee of strategic partnership. Some companies may be investing in IT simply to reduce transaction costs and reduce the size of HR, not as a way to make it a strategic partner” (Lawler, Mohrman, 2003). Many of the modern organizations find it difficult to align their workforce to gain their intended mission. The recent global economic crisis reminds all companies and organizations the significance of designing strategies for dealing with the future. The organizations which hold conventional strategies and structures are always more vulnerable to HRIS failure. Therefore, along with the HRIS implementation, organizational transformation in all its areas is essential for the proposed achievement. “The only way for the organizations to change rapidly enough is to design them so that they can adjust their strategic intents, structures and human capital deployments as a matter of routine that means starting with a new set of core principles about what an organization should look like.” (Lawler & Worley 2009). Conclusion HRIS has become an integral part of ERP and Human Resource Management in modern organizations. The system has enabled proper organizational HR reporting, confidential data preservation, and sufficient employee distribution etc. However, for the effective implementation of an HRIS project, various factors are to be aligned such as management support, proper need analysis, outstanding system design, project assessment/feedback etc. An effective HRIS will help HR professionals in their managerial functions irrespective of the size or range of the organization. In order to avoid conflict of interests adequate training and acceptability have to be ensured within various sections of the organization. Moreover, organizations have to ensure that the system operations comply with the code of ethics and legal obligations (Hubbard, Forch & Thomas, 1998). In short, a well designed HRIS project would help implement an effective combination of practices and policies. References Budhwa, Bhatnagar, 2009, The Changing Face of People Management in India, Taylor & Francis. Chen J S, 2007, Advances in Hospitality and Leisure Vol.3, Emerald Group Publishing p.73. Garson, Khosrow-Pour, 2008, Handbook of Research on Public information Technology, Idea Group Inc, Hubbard, Forcht,& Thomas, 1998, “Human Resource Information Systems:An Overview of Current Ethical and Legal Issues”,Journal Business Ethics, vol.17, Sept 1998. Kulwer Academic Publishers, Netherlands Kates A, Kates D., 2006, “(Re) designing the HR Organization”, Human Resource Planning, vol.29 Kavanagh, Thite, 2009, Human Resource Information Systems, SAGE Publications. Kesler, 2000, “Four Steps to Building an HR Agenda for Growth: HR Strategy Revisited”, Human Resource Planning, vol.23 Lawler, Mohrman, 2003, “HR as a Strategic Partner: What Does it Take to Make it Happen?”, Human Resource Planning, vol.26 Lawler &Worley, 2009, The rebirth of change, People Management Magazine; 29 Jan 2009 Lever S., 1997, “An Analysis of Managerial Motivations Behind Outsourcing Practices in Human Resources”, Human Resource Planning, vol.20 Litwin, Morzy & Vossen (eds.), 1998, Advances in Databases and Information Systems, illustrated, Springer.p.356 Noe R A, 2004, Fundamentals of Human Resource Management, McGraw-Hill Companies, Inc, p.49. Reynolds D H, Weiner J A, 2009, Online Recruiting and Selection: Innovations in Talent Acquisition, John Wiley and Sons, pp 24-25. Thierauf R J., 1997, On-line Analytical Processing Systems for business vol.58, illustrated, Greenwood Publishing Group, p.287. Torres-Coronas, Arias-Oliva, 2008, Encyclopedia of Human Resource Information Systems: Challenges in E-HRM, Idea Group Inc (IGI), pp.95, 473. Wilson-Evered, Hartel, Hingston, Whitman & Laing, 2003, An Empirical Study of an HRIS Implementation, viewed 21 August 2009 Read More