Identifying business needs
Making a vendor list and narrowing it down
Fighting for approval
A system for start-ups
Shelley Tam, one-woman HR department for DragonFly Mobile in Marina Del Rey, California, needs a system, because if she's gone, that means the whole HR department is gone. "If I go off on vacation, I'm not going to be reachable by phone. I told the company that."
Tam has been on the job only since the fall of 2000, and the company has existed only since that spring.
"We don't really have anything right now," she says. Yet, the 17-person company could be primed to grow at any second, as funding comes in.
"We may very well be thrown into a situation where we may be growing rapidly," she says.
What's she looking for? Essentially, to "take care of the basics," she says. Tam wants the system to manage employee information, benefits statements, payroll and hours data, and absenteeism. An added bonus would be to generate other reports, such as the cost of recruitment.
Self-service capabilities aren't on her must-have list right now. "Not quite at that point yet," she says. "It would be cool. Something we don't need to do right now."
Allison Banks is the HR manager at Perforce Software, another small (fewer than 50 employees) but growing company. Right now, they're using Excel to capture important data.
"Obviously, this is cumbersome and ineffective," she says. "I'm a one-person HR show, so I don't have a lot of resources to spend on implementation and administration."
The irony is, it's a high-tech company. "We employ very technical folks who don't like paper-oriented processes," she says. "We embrace technology around here, so the more I can get online, the more successful I'll be in managing my time and also the time of our employees.
"I'm hoping, while we are still small, to create a formless culture, with information available online in much the same way we sell our product," Banks says. "I'm looking for a Web-enabled employee self-service/manager self-service system.
"We are looking for an HRMS that, ideally, will have the ability to capture general HR information--employee data, personal data, compensation, performance review information, 401(k), stock--and also administer benefits and new-hire paperwork," Banks says.
"I would also like a time and attendance module that can interface with our payroll system, eliminating the need for paper time sheets. We don't have a large non-exempt population, but I'd still like to see those time sheets disappear. I'd also like to give our exempts a way to record their time off online that would interface with our payroll system."
Bi-coastal business needs
ITXC has 190 employees in Princeton, New Jersey, and recently acquired a 100-person company on the West Coast. The company has three HR professionals for the current 300-person workforce: an HR director, an HR coordinator, and an HR generalist, Karen Choff. Choff was given the job with the understanding that finding an HRMS would be one of her first and biggest responsibilities.
The search for an HRIS at ITXC has really been driven by the need to save time. Right now, they have a database in Microsoft Access, which is working okay but requires a lot of time for the HR staff to handle benefits changes and other things (such as address changes) that could be self-service.
"Having an HRIS really streamlines everything," says Choff. "We're at the next level, where we actually need to grow a little bit more. We want to streamline all the processes. Let's say someone wants to move from New York to New Jersey. The address change that would normally go to HR would now go right online."
Choff is looking for a system that will work for both coasts. "When we have employees at different sites, it will connect all of us together, which is huge."
A far cry from a start-up, Acterna is an organization composed of a variety of companies bought and combined over the years. Nancy McLaughlin is the corporate benefits coordinator, and handles benefits enrollment and related matters for the 5,000 employees working for Acterna or companies owned by Acterna.
While Acterna did upgrade at the beginning of 2000 from its old DOS-based HRMS, McLaughlin says it wasn't quite enough.
"We started looking last spring for an online system to help us with the open-enrollment process," she says.
One of her unique needs was for a system that could handle the company's propensity for acquisitions. If a company was sold off, Acterna needed a system that the departing company could take with it. McLaughlin wanted to find an open platform like that without a lot of additional costs.
The other key criterion was having "live data." "With a lot of these online companies," McLaughlin says, "the data is updated as much as you send them information, so if you only send them information once a week, that data isn't live until week's end."
The "not having live data" thing poses a problem, with so many employees from so many places changing their addresses, benefits information, and so on. McLaughlin says it was important to not have a lag time between when employees change their information and when the data is made live because of a weekly update by her team in Burlington, Massachusetts.
Making the list and narrowing it down
Most Workforce members tell us their initial research is done online.
Shelley Tam, of DragonFly, started her research online. She then sent off e-mails to vendors that had systems of interest to her.
The biggest problem she has is finding a system that accurately tracks vacation, making it easier for her to calculate vacation when employees start midyear. She's currently (February 1, 2001) looking at !Trak-it, Abra, and Icarian.
Tam is having each company get her a system demo, which she'll test and then ask follow-up questions. She will try to make a recommendation to her boss in approximately two months.
Questions she'll be asking herself during demos:
Is it easy to find the information you need immediately?
How user-friendly is it? "I might not be the only person who sees it," says Tam. "A less-experienced person should be able to pick it up quickly."
How easy is it to set up, and maintain?
What kinds of reports are available?
Tam, of the California start-up, is less concerned than some others we talked to about the number of years the vendor has been in business, or their number of clients. "I don't really pay attention to that," she says, "as long as they have a good product. I'm not a name-brand kind of person."
Another HR manager in a small company, Allison Banks, is trying to find a vendor with a financial future that looks stable. "Internet companies are closing up shop left and right," she says.
She gathered an initial list using "lots of research and process of elimination. I picked up the 'Products and Services Directory' (an annual print brochure) and started checking out the technology section. Based on our size, I was able to eliminate many of the big names out there." She looked at a couple of "traditional HRIS" systems, but "realized we weren't a traditional company in any sense, so why have a traditional HRIS? I couldn't really define what I wanted until I got out there and saw what was offered.
"I've combed the Web for feedback on specific products but haven't really found anything too worthwhile," says Banks, who's still in the hunt.
"What I've been doing is a lot of posting questions, just doing a lot of research on the Internet," says Karen Choff of ITXC, "either submitting my name to get info or doing demos and then putting them together in an Excel spreadsheet."
The components that Choff will be looking for in making a decision:
Web-enabled: "I'm looking for certain things we absolutely need," she says. "One of them is [the ability to be] Web-enabled. That's one of the biggest things. Every single employee will be able to go online and look at their information." Choff says it's critical that employees can access their medical information at home, outside the workday. Also, she wants this ability since she notices that spouses often make decisions on enrollment.
Price: "Price is definitely a big thing," says Choff. "We're not a small company, but we're not a large company. We're not looking for PeopleSoft, SAP," she says, referring to vendors offering products popular with large corporations.
Ease of use: "Functionality is huge. It has to be something that is very easy for the casual user to go to. It has to be Windows-based, easy to navigate. I don't want frustrated employees. That would be a step backwards."
Customization: Not knowing exactly what her future needs will be, Choff is looking for a system with some ability to adapt. "Just in case we have something in place and then we want to customize to the company, that's also really important."
Vendor experience: "There's a lot of competition," says Choff. "Every week there's a new one that pops up. I want to know how long has it been established? What is the revenue? How many clients? Look at their financials. When you implement something like this, you want to make sure it's the right one … it's affecting all your employee data."
Experience is also manifesting itself in the decision about whether to choose an ASP solution or an in-house solution. "That's another big decision," says Choff. "A lot of these ASP people are new. I don't know if I want to be one of the first they do this for." With that in mind, she'll be seeking advice from the IT folk. "That's their expertise."
Reporting: Choff is consulting with HR in the West Coast branch of the company, asking them, "What's your ultimate wish list for an HRIS? What are you looking for here?" For them, the ability to do a wide variety of reports, from EEO to management reports, is critical. Also, they want the ability to churn out custom reports, things that go beyond the standard that comes with whatever system they choose.
Choff is hoping to narrow it down to three to five finalists, and hoping to have that list within about four months. Then, she and the HR director will go through demos of each of the systems, and bring the CFO and IT into the process--folks who aren't yet involved. "I'm kinda just running with it right now."
Marilyn Schenk, director of human resources at GameTech Int'l in Reno, Nevada, looked at ASPs but found that they weren't for her. "We went with a software system. [The ASPs] just didn't have the capabilities we needed now and in the future. The ability to manipulate report structures. The capability for expansion. They didn't have the right reports. The system I picked actually took the best of everything I looked at."
Also, says Schenk, there was an intangible. "The salesperson listened to me and listened to my needs."
Specifically, that salesperson told her that the company's most expensive product wouldn't be appropriate for her. "They weren't promising me sky-high things and not following through."
Nancy McLaughlin, of the telecommunications conglomerate Acterna, went to consultants who worked on her medical and life/disability plans for an initial list. She began with three companies, which each came in to do demos.
"We were looking for a very simple program that employees could see what their benefits were, make changes to their address, have their summary plan descriptions online. We weren't looking for a lot of the bells and whistles a lot of companies sold. It would have been the right fit for other companies, but not for us."
Cost became an increasingly big issue. "Cost was a huge thing," she says. "With some of these companies, there was an incredible cost for what we wanted to use it for."
She eventually chose a system with a one-time installation fee and a small monthly maintenance fee.
"It was the opposite with a lot of others. The installation was smaller, the maintenance greater."
It's working out well, though the biggest challenge is that McLaughlin has 20 people at her location, and no IT department there. "It's hard in our environment up here. You definitely need an IT backup. It's always an adventure when you add a software piece."
Fighting for approval and re-approval
Schenk started looking for an HRMS for the first time last summer. They're currently doing everything by hand.
"We do most everything manually, with the good ol' personnel file," she says. "We have a little off-the-shelf program, an HR program. You can extract a little information from it, but it's really just record-keeping. If you want a report with specific numbers, you have to do it manually."
Also, with employees in 30 states, Schenk wanted the company to move to a system that could accommodate self-service for employees and managers. "Managers and supervisors are all over the place, and when they need information, they get on the phone and call us. With the self-service module, employees can enroll themselves in benefits, change their information. Managers can pull up previous pay increases, previous positions, discipline, any kind of accommodations, so when they're doing their appraisals, they have that information on hand."
That was the case when she was researching disparate impact (how their recruiting methods were affecting various demographic groups). Schenk and the two others in her department had to leaf through paper copies of old personnel files to check birth dates, gender, etc.
Schenk got approval from the CEO for a new system, and narrowed it down to one in October. Now she's fighting for re-approval, because "last quarter wasn't as good as we thought it would be."
Schenk put together an ROI showing why the system is justified, and is presenting it to the CEO.
What was included in that justification memo? For one, she's proposing eliminating a position she originally asked for in her department, which will no longer be necessary because of efficiencies brought on by the HRMS. The statement also covers decreased time and money spent on applicant tracking, benefits administration, and other record-keeping. Most important, she'll make the case that it will free up her time.
"It's time and money. The ability to focus more about strategy than the day-to-day things like record-keeping. HR should really be involved in the company's strategic development.
"We just put together a big strategic plan with a lot of HR emphasis," Schenk says. "The CEO said, 'I don't want you to have to do your job without the tools that you need. I just want you to make a wise choice.'"
"Our CEO is a bean counter," she says. "He's a former CFO. I'll tell him you would never make the finance department of this company operate without a software system. You would never make the warehouse/inventory operate without a software system."
HR on the pecking order
In her efforts to get her HRMS budget approved, DragonFly's Tam says she's balancing the desire for an HRMS with reality.
Her boss, the vice president of operations, realizes "it's a great idea," but venture capitalists are a factor. "We're funded by investors," Tam says. "What's important for our money right now? Employee benefits, operations costs, business trips. My HRMS is one of those that can wait.
"I'd like to do it now," she says. "But HR usually takes the back seat in everything. Having that attitude helps me realize what we need to spend our money on first, then putting together my wish list.
"Being a start-up, I always have to look at the bottom line," she says. "Do we really need it right now? I can't say we really need it right now. I'm on top of my stuff enough [to do the job in the meantime]."
What lies ahead for companies searching for the next version of an HRMS?
Jim Spoor, president and CEO of Denver-based Spectrum, says his sales folks are seeing more companies with nontraditional workforces. "More and more companies are moving toward job sharing, part-time employees, contract employees," he says. "Project-oriented people. There are mega flexibilities in the working world these days."
Another emerging business need, says Spoor, is that more and more companies are looking for systems that allow wireless connectivity. "Managers who are mobile and who have a dispersed workforce need to be able to have data at their fingertips wherever they are. They need to be able to update, change that data, add new information."
He gives the example of energy companies, where it's not so easy to carry a network around with you in an open-pit mine. "Using a hand-held device and wireless is obviously really important in that case." Spoor says the next wave will be employees wanting to access their personal data using wireless connectivity, not just at kiosks and such, as is the case now.
HRMS tied to portals
Another growing desire for companies, especially those with more than 5,000 employees, is to have an HRMS that includes a portal. Such a system allows employees to take care of a variety of non-work-related needs from their offices.
"Companies are asking what other services from the Internet, what other content and commerce can they provide employees?" says Joanne Wisniewski, Fort Lee, New Jersey-based director of strategic HR outsourcing for Unifi Network, a division of PricewaterhouseCoopers.
Wisniewski gives the example of an employee whose wife is having a baby. A portal will offer the employee information about local day-care providers as well as other maternity needs.
Is this what employees should be doing on company time? In Wisniewski's view, it sure is, because employees are working long hours anyway, which forces them to take care of personal needs at work.
"In the end it saves time and money for the employer," says Wisniewski. "The majority of those types of [Internet] searches people know come from corporate Web sites. Why not make it better, easier for them, saving everybody time and money? You still have some companies who think employees shouldn't be out on the Internet. That's changing more and more. If you know they're going to do it on company time, why not have them do it smarter?"
While there certainly are a plethora of other HR portals out there, Wisniewski says that having an HRMS/portal combo offers a more personalized service to employees, because-if the employee chooses-the portal pulls information from extensive data found in the HRMS.