Recharging Your HRMS

Jeannine Pecora, human resources and training manager for Delta Corporate Services, doesn’t mince words. “Our HR system is failing us,” she declares. Until now, the Parsippany, New Jersey-based management consulting firm has made do with a homegrown system and an amalgamation of applications such as MS Office, Access, and Excel. But reporting is limited, tedious, and spreadsheet-intensive; the various software programs are not integrated; data must be entered multiple times; and retrieving information is often hit or miss.

    “But our business has grown tremendously, and we realize we have outgrown our technology,” she says. “Our systems desperately need to be updated or replaced.”

Her wish list: a system that will smoothly manage and track records, automate routine HR tasks, and eliminate the ubiquitous spreadsheets. “With today’s technology, we should be able to generate, proof, authorize, and record information without having to print or pass a sheet of paper,” she says.

    Does Delta’s situation sound all too familiar? Is your HR system ahelp–or a hindrance? Does it streamline operations and boost efficiency and productivity? Does it cut down on paperwork, generate sophisticated reports, and let employees and managers handle routine functions? Or does it bog down, crash, lose data, and cause maddening bottlenecks and frustratingdelays–creating even more work for you and your staff?

The solution to your software snags may lie not in upgrading the technology, but in making better use of what you now have

If your HR system seems to be more trouble than it’s worth, you may not have to give up on it just yet. A few relatively inexpensive add-ons could make the difference between phlegmatic and powerful. Or the solution to your software snags may lie not in upgrading the technology, but in making better use of what you now have. 

Here are some cost-effective tips for supercharging your HRMS.

1. Consider Add-Ons
    Complementary third-party tools that handle functions such as recruiting, training, hiring, or reporting can enhance an antiquated HR system. For example, one such tool, Eventrix by PerfectSoftware, which works with any HRMS product, automates new-hire and termination processes by tracking employee data and distributing the information to every department that is affected, from the mailroom to security and payroll.
    But there’s danger in going overboard with add-on features. “Don’t spend good money after bad,” warns Scott Busby, chief information officer for AdvanTech Solutions, a Tampa, Florida-based HR outsourcing firm. “If your legacy system doesn’t have much of a future, temper your spending. There’s no point in putting a great front- or back-end product on a system that’s going to last only another one or two years.”

2. Get Portal Power
    Even companies that are clamping down on software spending are opening their wallets to portal applications. That’s because such front-end software, which runs about $10,000, can Web-enable your system, integrate applications, exchange data throughout the enterprise, allow employee or manager self-servicecapabilities–and ultimately boost productivity and cut costs. According to a study by Best Practices, LLC, on how companies can optimize limited HR resources, such software results in a 60 percent reduction in cost per transaction.

    “You’ll get the power of the Web at a very inexpensive cost compared to a new HRMS,” says Steve Larson, head of strategic systems consulting and integration for the HR consulting firm Watson Wyatt.

    According to a recent survey by CIGNA, an employee-benefits organization, 80 percent of workers say that they currently cannot manage their benefits online, and more than 40 percent say they would like to do so. “Benefits managers really should consider accelerating their time lines for rolling out additional online services that better meet workers’ needs,” says Eric Consolazio, senior vice president and head of CIGNA E-Commerce.

What’s even cheaper than buying portal software is enlisting the help of someone in your tech or 
creative department to build a Web page on top of your existing HR applications. It’s a fairly simple process, but can reap great time-saving benefits, says Brian McIntyre, president and CEO of Columbia, Maryland-based Working Concepts, a division of Towers Perrin that implements HR technology for large and medium-sized companies. 

    “You can post policies and procedures and benefits information,” McIntyre says. “You can let employees make basic changes or transactions, such as address or W-4 changes. They can check their 401(k). And they’ll no longer have to phone HR to ask questions like, ‘When is benefits enrollment?’ ”

3. Integrate Your Systems
    Are your HR applications on speaking terms?

   “Many companies have purchased individual third-party applications that don’t talk to each other and aren’t integrated with the HRMS,” Larson says. If that’s the case, you may have to enter the same information multiple times. Or worse, you may end up with discrepancies and inconsistencies betweensystems.

It’s important that applications are integrated not only throughout HR but also throughout the entire company–especially with departments like finance and payroll

   Ask your IT department for help. A common computer language, such as XML (Extensible Markup Language), may be able to integrate your benefits, compensation, performance, and other systems with your HRMS, thus allowing you to exchange data between systems.

   It’s important that applications are integrated not only throughout HR but also throughout the entirecompany–especially with departments like finance and payroll, says Russ Campanello, senior vice president and chief people officer for NerveWire, a management consulting firm in Boston. That’s why he made sure that NerveWire’s HRMS was compatible with the rest of the enterprise. “Then there’s no argument about who has the right data, and we don’t spend any time closing the gap between the information payroll has and the information we have,” Campanello says. “We are not going to have an application island in HR.”

4. Hire a Host
   Jennifer Cress, chief people officer for STI Knowledge, an Atlanta-based company that handles support calls for businesses, says outsourcing solved her company’s technology woes. As STI Knowledge doubled in size to about 250 employees and began offering more benefits, such as a 401(k) and flex plans, its seven-year-old homegrown HR system couldn’t keep up.

   “My biggest headache was the old system’s reporting functionality,” Cress says. “I had tons of spreadsheets. Whenever I needed something, I would have to go to the IT person to write an SQL query and get the data.”

   But the notion of implementing an entirely new system was overwhelming, Cress says. “I didn’t want to hire more IT people. I didn’t want more servers. I didn’t want to worry about systems going down.”

   She turned to Employease, a Web-based, hosted HR management program, which charges her about $36,000 a year. “I’ve gotten rid of a lot of spreadsheets and paperwork,” Cress says. “Employease provides all the analytic reports that I want, so the HR team can spend time on improving employee relations, orientations, and training. Now employees even enroll in their health plans online, and the data is sent directly to the medical-benefits carrier.”

   But while turning to a Web-based outsourcing firm to host your HRMS can be cheaper and simpler than buying, installing, and maintaining a system in-house, there’s a frustrating downside: you give up control. “The outsourcing company may not be able to react to your requests for information or make changes as quickly as you need them to,” McIntyre says.

   A possible solution: considering outsourcing as a single HR function, rather than the entire HRMS. “Then you can retain control over the HR technology,” he notes.

5. Use What You Have
   The problem may not be the technology. It might be the users, employees who aren’t making the most of the software’s functions.

   For example, many HRMS packages include self-service features that enable managers and employees to resolve inquiries and conduct transactions from their PC desktops. “But those tools are of no use if people are still filling out forms and bringing them to HR,” Larson says. “Self-service will do all sorts of fantastic things, but if you can’t get people to use the process, where’s the savings?”

   The CIGNA survey shows that while 57 percent of employers say they offer online access to health-care or retirement benefits, most employees say they still conduct transactions by mailing paper forms, making a phone call, or working with benefits managers.

   Many companies “barely scratch the surface of what their technology is capable of doing,” Larson says. “They use the most common 5 or 10 percent of the features, but rarely realize its full power. They never get the complete return on investment that the software can deliver.”

   That’s especially true, he says, of companies that rely on “vanilla implementation” (software installed straight out of the box, as opposed to customized installation based on your specific business needs) of big enterprise packages. If you spend all your tech time and budget blindly upgrading to the latest version, the result may be that no one has a chance to master the features that are already there.

   The solution is to analyze your enterprise before upgrading. Determine which processes would give you the biggest bang for the buck, how to tailor your existing technology to fit your needs, and how well you are deploying the software features that can best serve your company.

6. Restructure Your Team
   Consider having one person–perhaps someone culled from your organization’s IS or ITdepartmen– devoted to HR technology or reporting. “Have that person focus on how HR technology is being used,” McIntyre suggests. “For example, he or she could set up reporting templates, rather than having several individuals in HR each doing their ownthing–perhaps creating redundancies or working at cross-purposes.”

7. Don’t Go It Alone
   There’s a lot of tech help out there–some of it free or ridiculously cheap–if you just look for it. For example, you can seek out users’ groups. Or network with similar-sized companies in the same industry or at the same stage of growth as yours, and ask what works for them. Ask your HRMS vendor to send someone over to spend a day teaching tech tricks to your staff. Campanello says he simply spent a lot of time “sitting with the folks in IT and development.”

    Some HR employees may not have been formally trained in using your system. That’s especially likely if your department has experienced staff turnover. A day or two of training can teach them how to take full advantage of what the technology offers.

    It may also be well worthwhile to bring a consultant on board. “If you have spent $50,000 on technology, consider spending an additional $10,000 to get someone to manage it for you,” McIntyre says. “You may realize real hard-dollar benefits in the way you conduct your business. Use your technology as a catalyst to improve your business processes.” 

Workforce, September 2002, pp. 38-42 — Subscribe Now!