However, by following best practices in software selection methodology, companies can mitigate their risks and select a best fit solution that can grow and change with the organization. There are many flavors of selection methodology and you can get caught in the paralysis by analysis trap if you do not maintain focus. The key point here is to have a plan and a systemic process in order to avoid confusion or madness. There are some basic steps that you need to consider during your HRIS selection process.
Step 1.The first and most critical step in your HRIS software selection project is to get executive sponsorship. In many companies, Human Resources is treated as an administrative function and a cost center. It can be difficult to get management to invest in an automation and information tool to manage the organization’s most valuable asset, their people. However, if a case can be made that the company’s goals and objectives are directly and indirectly aligned and impacted by the benefits of an HRIS solution, management buy-in can be achieved. For example, if there is a high turnover rate in the company, a recruitment management tool can help find the right candidate, reducing attrition and turnover costs while increasing employee productivity. A preliminary budget should be approved before commencing the software selection project.
Step 2. You should understand your HR management needs and requirements. Some important questions to consider include the following:
- What are my most critical HR processes?
- Is the company in growth mode or incur high turnover?
- Are company benefits managed by a third party administrator or do I need to manage all the carriers and providers?
- Can I leverage a self-service application for my employees to manage personal data and benefits enrollment?
- What types of personnel data do I need to collect?
- Are the majority of my employees on salary or paid hourly?
- How flexible is the company’s PTO policy?
- Do I need to track education, training and certifications?
- Does the company have a complicated compensation plan with commissions and bonuses?
- Do you allow draw pay? Or claw back?
- Do you process payroll in house or outsource?
Step 3. These requirements should then be documented, reviewed and prioritized. Other departments should be consulted as each may have different requirements or stakeholder interests. For example, certifications may be required for technicians but not for sales staff. These requirements should then be consolidated, weighted and used to develop a request for proposal (RFP) document. The RFP structure depends on the complexity and volume of your requirements. However, it should have three essential components at a minimum:
- Company background, current situation and HRIS objectives;
- Specific response instructions including procedure for questions and format of response;
- Contact information;
- Software feature and functionality requirements.
Step 4. A common mistake in many enterprise software selection projects is not defining a budget at the start of the project. An initial project budget should be estimated based on what the company is willing to pay to realize the benefits of an HRIS solution. This budget can adjusted and approved as final decisions are made and the new system payback become more clear.
Step 5. Next you can do your research in order to select a long list of potential application vendors. Polling other HR colleagues in your network is a very good method of research. Narrow your search to people in companies that are similar in size and industry. Visit the vendors’ websites and find out if their solution fits your high level needs. The size of your vendor list depends on how much time and resourcing you have to devote to evaluating RFP responses and software demonstrations.
Step 6. Begin the process of creating demonstration scripts while waiting on RFP responses. It is imperative to always use software demonstration scripts when scheduling HR software demos. This is essential in order to make sure that your vendors demonstrate the most critical feature sets and functionality requirements and not just the bells and whistles of the system. For example, have each vendor go through a recruit to retire process and objectively evaluate and score the key functionalities that you want to see demonstrated in that process. For example, do you want to be able to integrate to a background checking service provider? Do you want candidates to access your system to view jobs and apply online? Can candidates attach their resume? Do you want to see how employees can enter their own personal data? Can employees do open enrollment online? How does the system handle termination? If you have strict PTO policies, can the system enforce these policies? By scripting the demos, all vendors are forced to show you the same functionalities so you can make an apples to apples comparison.
Step 7. Evaluate and score your RFP responses. Did your vendors follow instructions in responding to the RFP? Did they provide all the information requested? If not, why? Are your key requirements met? Usually, no one vendor will be able to meet all your business requirements. Expect some vendors to suggest workarounds or customizations. Develop a vendor short list which best meets the majority of your highest priority objectives and invite them to demonstrate their solution. Now is the time to provide them with your demo scripts.
Step 8. Conduct and evaluate vendor demonstrations. Make sure that the most critical requirements are demonstrated. Note the number of clicks and system response times. If something takes one minute to complete, imagine that multiplied by the number of times you have to perform that task throughout the day.
Step 9. Rate your vendors based on both quantitative and qualitative factors such as RFP response, ability to demonstrate required functionalities, vendor contract, company reputation and market share, vendor financials, vendor support hours and plans, price, implementation team, and customer references. You can develop a weighted rating system that scores critical factors with increased priority. If price is a critical factor, you may choose to give it more weight than functionality.
Step 10. A preliminary implementation plan and scope should be reviewed prior to the final decision and certainly before the contract is signed. Your vendor should by now understand your organization and needs and be able to provide you with an implementation approach and plan that includes time, costs and benefits. Together you can work on refining a preliminary scope. This plan and scope should be attached as an addendum to the contract to ensure that what you bought is what will be delivered.
Step 11. Get executive buy in. No that is not an error. I cannot place too much emphasis on executive sponsorship. After you have selected the right software, present the decision to your executive team. A lot of time has passed and they might not remember the key reasons and objectives of why you were tasked with selecting an HRIS. Sponsorship also lets other departments know that this initiative is important to the company and company-wide cooperation is paramount.
Following a software selection methodology can take the guesswork out of your decision and ensure a best fit solution. Knowing your needs and understanding what each vendor provides are critical to a successful implementation.