By now, most information technology professionals have learned to live in a chronic state of disequilibrium. But just knowing that HRMS is a wild ride doesn't make it any easier. At many companies, says Kagan, progress isn't coming fast enough to sidestep a litany of nagging concerns. Too often, systems are obsolete before anyone clicks a mouse, and the core software doesn't properly integrate with operating systems and application software on the desktop. Even worse, many organizations rely on stopgap solutions rather than adopting a proactive, enterprisewide approach. The end result? HRMS systems that fall way short of their potential. "The challenge is to sort through all the issues and come up with a core strategy and plan that really works. Unfortunately, that's easier said than done," Kagan cautions.
Over the last decade, human resources management systems have become an important cog in the corporate wheel. Today they drive recruiting, payroll systems, employee databases, succession planning, benefits calculations, workflow solutions and much more. Connected to various kinds of corporate networks and to relational databases, they're helping automate and reengineer processes, cut costs and make employees more effective. "When they're used efficiently, they can drive enormous gains," says Debby Love-Sudduth, workflow process leader for The Hunter Group, a Baltimore, Maryland-based technology consulting firm.
But the success of these systems hinges on an array of complex factors and involves more than the technical expertise of HR and information technology departments. In a market teaming with zealous vendors and a brain-wrenching array of approaches, installing and running an HRMS solution increasingly demands the attention of the entire enterprise. Without a core platform and a central strategy to drive decisions about hardware, software and work processes, the entire organization can find itself shackled with automated inefficiency. Sinking hundreds of thousands of dollars into fixes for an already decrepit system can lead to outright chaos.
Successful HRMS systems are built from the ground up.
Depending on the scale and scope of a project, a typical HRMS package can cost anywhere from several hundred thousand dollars to well over a million dollars. And that's just the beginning. According to Kevin Pereau, a consultant for Cambridge Technology Partners of San Ramon, California, the price tag for complete implementation -- hardware, installation and additional programming -- can easily top out at four to eight times the cost of the HRMS package alone.
That's no puny sum. Nevertheless, "Dead-end systems and failed attempts at HRMS are everywhere," says Pereau. "In some cases, people make bad choices. Sometimes they don't engage in the proper diligence on the front end of things, or they factor in the wrong issues and come to the wrong conclusion." But it's not always about bad selection. "Companies merge and are acquired by others, and the new organization has completely different standards and a low tolerance for application diversity," he says.
The result, all too often, is a melange of systems and standards. One division might run an HRMS application from PeopleSoft and another from SAP. Still another might run software from Lawson or Oracle. Hardware might range from PCs to mainframes. And UNIX-based systems might be floating around the company along with Windows NT® and Windows® 95. Building bridges so that data can flow between all the different platforms can devour time, money and resources. Moreover, "It often mirrors the way the organization already works and does nothing to help reengineer processes and find more efficient ways to get work done," says Kagan.
Indeed, such an outcome can create problems: The organization must have different technicians to support different systems and must update code every time a software package is changed. "Every additional vendor you deal with means maintenance, upgrades and changes -- here, there and everywhere," says Kagan. Of course, that doesn't mean it's necessary to rip out all your old equipment and start from scratch. Short of creating a companywide, unified system, it's possible to at least cut back on the number of systems and stitch them together more efficiently. "Ultimately, you wind up with the question of whether to go with best of breed in each area and tie it all together or look for an integrated package or suite."
Regardless of which approach a company takes -- there are certainly pros and cons to each -- core hardware and operating systems issues remain at the center of the equation. But how an organization solves infrastructure problems and which alternative it chooses is also determined in part by its culture and approach to technology. At Richmond, Virginia-based James River Corp., a Fortune 100 company that produces consumer paper products, including the well-known Dixie Cup line, best of breed is the norm. The firm, with 15,000 employees and 40 operating locations worldwide, runs Lawson HRMS software, but also uses a benefits module from PeopleSoft and SAP financials. Foreign offices operate on stand-alone systems that the company hopes to eventually integrate into the corporate database.
"We've moved away from home-grown solutions and toward enterprisewide systems," explains David C. Gunter, director of employee administrative services. "Whenever possible, we're trying to use systems that work for the entire company. But it isn't always possible to toss out all the existing systems at once and migrate to something new. We also don't want to lose the functionality that certain software provides."
That's the crux of the problem. No approach provides all the answers, and no migration path is painless. In fact, Love-Sudduth warns that companies all too often focus on what they don't have, rather than on what they have with their current system. "They can easily wind up trading one set of problems for another," she says. But trying to maintain a global view isn't particularly easy. Too often, it's as if the ground is constantly shifting under the organization's feet.
Although so-called enterprise resource planning vendors (ERPs), such as PeopleSoft, Oracle and SAP, now offer comprehensive solutions that allow human resources and other departments to exchange data, the sobering reality is that even an ERP might not deliver all the functionality a company is looking for. Modules might use the same application programming interface (API), but that doesn't mean the data will neatly tie into an Oracle, Sybase or Informix database the same way or that every data field can be exchanged between modules without tweaking. "The issue inevitably comes down to whether you're going to conform to the package or make the software conform to your needs," says Kagan.
It's all about standards.
Finding a solution is no simple task. Combine the humbling reality of an annual budget with a seemingly constant barrage of hardware and software upgrades, and you have the ingredients for a world-class migraine. Whereas a three-year technology plan might have worked just fine a decade ago, it's now a way to flirt with disaster. Even a 12- to 18-month outlook is at the outer edge of what's practical. Increasingly, information technology providers and HR professionals are being asked to anticipate the type of equipment that will be needed and to install a system that has plenty of room to grow.
Indeed, the hurdles to be cleared in creating an HRMS are much like those for creating a complete companywide network. For example, a companywide technology standard is a good place to begin mapping a future. By providing employees with the same operating system, application software and PC hardware, it's easier to ensure connectivity and compatibility. "When everyone is using the same version of software, it's easier to make sure the entire enterprise is viewing screens and data tables the same way. It has implications for security, training and even upgrading and maintaining software over the network," says Kagan.
But that's only half the battle. The underlying database structure, the toolsets that come with a program and extend its functionality, and the overall group of applications and how they interact also play a role. "To prevent obsolescence, you have to create an environment that makes it easy for developers to add additional screens, change menus and change capabilities," says Alan Goldstein, vice president of development at The Ultimate Software Group, a Fort Lauderdale, Florida HRMS vendor that markets ULTIPRO® for Windows.
That's easier said than done. Despite advances in HRMS and the explosion of corporate intranets that allow companies to move data across previously incompatible hardware platforms and operating systems, the problems aren't likely to disappear anytime soon. Even companies that opt for open systems and pay close attention to alliances face an array of daunting challenges. Those that opt for integrated product suites must also endure their share of digital indigestion.
Meeting the global challenge.
"There's still no single vendor that has every application a company would need," admits Deb Edlund, product marketing manager at Lawson Software, an HRMS vendor based in Minneapolis. What's more, companies expanding into the global arena often encounter a maelstrom of laws, cultures and telecommunications systems that makes it nearly impossible to adopt a one-program-fits-all approach. With or without technology standards, getting bits and bytes between New Delhi and New Jersey can prove mind-boggling.
Douglas Bowman knows all about the challenges of moving data in a global environment. The human resources systems consultant at Tektronics Inc., a Beaverton, Oregon-based company that manufacturers high-end printers, must deal with offices in Australia, India and beyond, most with no more than 10 employees. "We don't have the transaction volume to justify deploying client/ server systems, serious network bandwidth and constant upgrades. We also don't have the ability to support such a system," he says. Instead, local offices track information in spreadsheets or other applications of their choosing and feed information to the company's central database in Oregon. Even though nearly one-quarter of Tektronics' 8,300 employees are outside the United States, the company hasn't had serious problems with overseas offices losing data, says Bowman. "The biggest problem has been that HR people wind up with extra work. They have to keep the data for themselves and then re-enter the data for headquarters."
Tektronics gives managers a good deal of latitude when it comes to running local operations. "We don't have a huge need to know what's going on at the local level. You have to understand what data you really need to drive improvements and what you really don't need." Combined with a U.S.-based HRMS system that hooks up to the company's intranet, Tektronics has realized productivity gains and cost savings.
The key? Tektronics, which uses a best-of-breed approach incorporating several vendors, is adamant about maintaining open systems. Bowman looks for "products that easily work with each other and have the toolsets to function within the overall system." He refuses to create new programs, but regularly extends the reach of the system using the provided toolsets. Indeed, by mapping data flow, data ownership and how each component of the overall HRMS handles and routes data, the company is able to manage a growing mountain of information. "Even if we wind up with some redundant data, we're not too concerned," he adds. "The point is, there's only one place to change it."
Ideally, of course, departments need to break down walls and find ways to create companywide standards. "The thing that a lot of HR people often forget is that the enterprise doesn't revolve around their system," says Bowman. "HRMS usually piggybacks off the network and must complement other enterprisewide computing needs."
An HRMS runs on more than microchips and code.
The main objective for HR is to determine what the organization's needs really are and how it can realize gains by efficiently deploying HRMS solutions. Then it's up to the company to make sure there's synergy between work processes and technology. "The bottom line is that you have to constantly reengineer," says Love-Sudduth. "No HRMS is a permanent panacea. An organization's needs are constantly changing."
Usually, the vision and strategy comes from the top -- typically a senior member of the human resources management team. However, "By the time you get around to polling the rest of the senior team from other departments, it's pretty clear they don't all share the same vision. . . .," Love-Sudduth says. It's important for each department to not only deliver its own wish list to the information technicians, but also grasp each others' needs.
When James River began modernizing its HRMS in the early 1990s, it faced a daunting challenge. More than three dozen locations relying on an assortment of hardware and software needed to be standardized. The organization also had to consolidate management of a series of differing payroll and pension plans that it had assumed through a series of acquisitions over its 27-year history. Handling all the data in the different locations had become expensive. "Things were starting to fall apart," admits Gunter.
The first step was to gut several home-grown systems and replace them with a centralized payroll database and core HRMS software. After executives at one division recommended a system from Lawson running on an Oracle database and a TCP/IP network (the same network structure used by the Internet for data exchange) managers began analyzing whether the software could pay dividends for human resources at the enterprise level. The firm assembled a cross-corporate team, which spent weeks dissecting the needs of HR and the organization as a whole. After the team recommended the software, the company spent close to 18 months updating and installing hardware to ensure a successful transition.
That was four years ago. Already, the company has upgraded to a newer version of the Lawson HRMS software. But it now uses the system as the backbone, even with PeopleSoft® and JD Edwards modules plugged in. "When we purchase other software it has to run with the HRMS system we have in place," says Gunter. In fact, the system will remain the centerpiece of the company's strategy as it further develops sophisticated data warehouses, workflow and other HR solutions in the months and years ahead.
And that's what HRMS is all about. Even with high-powered PCs whirling away on employees' desktops and sophisticated HRMS software dishing up data at the speed of light, it comes back to strategy and standards. Without them, an organization is likely to veer off course like a ship with a broken compass. When that happens, all the technology in the world won't get it back on course. "Every company has unique needs," says Love-Sudduth, "but the universal truth is you have to know where you want to go and what you want to achieve before you can get there."
Workforce, June 1997, Vol. 76, No. 6, pp. 28-33.