HRIS/Payroll strategic decision making

It’s a given that an HR or payroll system has to satisfy your organization’s requirements. After all, there’s really very little point in continued use of a system that doesn’t meet those needs.

But there’s generally more to it than that. Short of radical changes in requirements, organizations should expect to get 5 or 10 years out of an HRIS. In today’s terms, that’s a relatively long time. This means organizations should see an HRIS as a strategic investment, with the organization making a conscious effort to get the best return on that investment.

There are several parts to the effort required.

Probably the most important is a focus on the relationship with the vendor. A good vendor relationship can be helpful in several different ways. A good relationship might make the vendor more receptive to suggestions about improvements that could make the product a better fit with your requirements. A good relationship might also give you readier access to key resources when you’re in need of technical support. In the end, vendor relationships are relationships between people. You will probably get more out of your investment in a system, if this vendor relationship is properly managed, with the right level of care and attention.

The other point is training. It’s not uncommon that an organization’s greatest knowledge and understanding of a system, and of how it’s been implemented for you, comes in the first few years of use. Later on, as the people involved with the initial system decision, or with its implementation, drift away that fund of knowledge may no longer be accessible. For this reason, it’s important that organizations make an ongoing effort to ensure everyone involved keeps up their knowledge of the system.

However, at some point every organization makes the decision to replace its existing HRIS. If your organization is moving toward that point, what can you do today to become better prepared for any such eventuality?

My experience suggests there are two key steps.

First, begin to update the documentation around your system. If this documentation doesn’t exist, start the process of its creation. Even if your organization ultimately decides against searching for a new HRIS, this work will not go to waste. Good system documentation can be helpful in any planning for disaster recovery. It’s pretty hard to recover or rebuild something, if it’s not properly documented. Such documentation is also an opportunity to apply best practices, to improve the efficiency of employee-related administrative processes. While you’re reviewing these processes for the purpose of documenting them, you might as well try improving them at the same time.

I have written elsewhere about the documentation needed in properly describing HR or payroll systems, but this should include at least the following elements:

  • A high-level, one-page diagram showing the visual relation among all internal or external systems that touch on employee data;
  • Detailed documentation on each interface to external systems;
  • Flowcharts for each major employee event or administrative process;
  • A demographic description of your employee population and its characteristics;
  • A description of how every payroll transaction is calculated; and
  • An analysis of commitments to specific IT environments or vendors that might impact on HR or payroll systems.

The second suggestion I would make is to consider disconnecting the system concerned from all direct interfaces to other internal or external, employee-related systems. Very few employers have the luxury of having all employee-related data self-contained within a single application. Most employers of any size or complexity depend on interfaces to other systems to accomplish key aspects of employee administrative processing. While you can’t severe these links, you can isolate the system you are considering for replacement.

A common technique during implementation, particularly of cloud or SaaS based systems, is to develop a ‘hub’ – an internally developed database housing employee data to be shared across multiple applications. The point of a hub is that HR or payroll may share common employee data with more than one other internal or external system. Instead of building separate, point-to-point interfaces between HR/payroll and each one of these other systems, with a hub there is a single interface for all required data from HR/payroll – between this system and the hub. From the hub, interfaces are then built out to each application that needs access to employee data.

Replacing an HR or payroll system can be a significant project for a large or complex employer. A good part of the work required is the replacement of existing interfaces between HR/payroll and other employee-related systems. A hub-based interface strategy means that the work involved is limited to replacing a single interface – between HR/payroll and the hub, or perhaps two interfaces, if employee data moves both to and from HR/payroll. Having built such a hub, the organization then faces that much less work for any subsequent change in its HR, payroll or other employee-related applications.

The other advantage in implementing a hub before seriously considering replacement of an existing HR/payroll system is that this will spread out the related work. Implementations are tremendously busy times for HR, payroll and IT, particularly if these happen during year-end. If you can split the work involved into separate parts, so that hub-based interfaces are in place before beginning to implement a new system, the peak demands on your staff will be that much less.

Alan McEwen is a Vancouver Island-based HRIS/Payroll consultant and freelance writer with over 20 years’ experience in all aspects of the industry. He can be reached at armcewen@shaw.ca, (250)228-5280 or visit www.alanrmcewen.com for more information.

 

About Alan R. McEwen

HRIS/Payroll consultant and freelance writer
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