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Ditching Home-Brew for Tech Rental

July 15, 2006
Related Topics: Human Resources Management Systems (HRMS/HRIS), Featured Article

NES Rentals lives up to its name when it comes to workforce management software. The company, a 3,000-employee firm that rents forklifts, cranes and other equipment, decided a few years ago to scrap a human resources computer system based largely on homemade spreadsheets. In its place, the firm effectively rents HR software over the Web.

    The Chicago-based rental company pays a monthly fee to vendor Ultimate Software for a system that handles payroll duties and provides Web portals for employees and managers to complete HR tasks themselves. The setup with Ultimate Software is ideal for a nationwide company that grew quickly through acquisitions, went through bankruptcy and may grow again, says Bill Doucette, vice president of human resources at NES. The system, launched in 2003, can handle up to 25,000 employees without needing any additional tech staff on the part of NES, he says.

    "We're in an industry that is fragmented and poised for growth," Doucette says. "If we are fortunate to continue our recent success, we will be able to easily grow with the industry."

    And the software is easy on NES' pocketbook, he says. A study by research firm Nucleus Research found that Ultimate Software's UltiPro product allows NES to save $250,000 annually in payroll service bureau charges. Ultimate Software paid for the report.

"If someone says, 'What was our overtime cost last year?' we or they can get that data literally in less than five minutes. ...We've gone from the Stone Age to the 21st century."
--Bill Doucette, NES Rentals

    These days, most large businesses are turning away from homegrown HR software. Such systems are notorious for maintenance headaches, steep price tags and obsolete features. And a new generation of applications delivered over the Web pro­mises low startup costs, easy imple- mentations and fast upgrades.

    On the other hand, the do-it-yourself approach has its benefits, including applications tailored to company-specific business processes.

    Building internally wasn't a real option for NES, Doucette says. Starting in 1998 the firm went on a buying spree, snapping up 47 companies in 18 months and expanding its workforce to 3,500 employees. At the time, the company was using a payroll management product from ADP built for employers with 100 or fewer workers. It was generating HR-related reports on one-off Microsoft Excel spreadsheets. But the company's information technology department was focused on other matters, like consolidating financial databases.

    So in July 2002, NES signed a contract with Ultimate Software whereby it pays $6 a month per employee for payroll processing and HR management software accessible over the Internet. The system was up and running January 1, 2003.

    The software helps NES limit its HR and payroll staff to 17 people, Dou­cette says. It also seems to have fostered a more data-driven business culture. The company can now generate workforce-related reports quickly, and managers are requesting such information more and more, Dou­cette says.

    "If someone says, ‘What was our overtime cost last year?' we or they can get that data literally in less than five minutes," he says.

    Overall, Doucette is happy about abandoning the home-brewed HR technology. "We've gone from the Stone Age to the 21st century."

Workforce Management, July 17, 2006, p. 36 --Subscribe Now!

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