If you are thinking about investing in a new HR management system, you are not alone. Almost one-third (29%) of organizations plan to adopt a new HRMS in the near future, according to Towers Watson’s 2013 HR Service Delivery and Technology Survey.
Many of these investments are going to replace core enterprise systems with cloud-based – or software as a service (saas) – solutions. “The shift to saas is the leading agent of change in applications adoption as companies seek better flexibility and speed,” says Paul Hamerman, Forrester’s vice president and principal analyst for business applications.
The merits of a saas-based HRMS are clear. “It’s an opportunity to become better connected to your employees, and to transition your HR technology from a system of record to a system of engagement,” he says.
But making this shift requires more than just picking a product and rolling it out. From choosing a vendor who you want to work with and technology that will meet your long term needs, to ensuring your data will be safe and accessible no matter what, picking the right saas-based HRMS can be tricky.
Hamerman offers this advice on how to make the right choice for today — and for your future.
1. Plan for a new IT strategy. “Moving from an enterprise HR system to a saas solution requires a completely different IT support model and skill set,” Hamerman says. You will no longer need internal staff to care for equipment and manage upgrades, but you will need someone to interface with your vendor who will be responsible for staying ahead of updates, making sure data is being managed properly and that your support needs are being met.
Think through who is going to take charge of that relationship, and what is going to happen to the IT staff who formerly managed your on-site solution, he advises.
2. Be sure you are comfortable with updates on the fly. Most saas HRMS vendors deliver updates on at least a quarterly basis. “Some clients may not be comfortable with that,” Hamerman says. Before choosing a tool, ask the vendor about their frequency of updates, how those updates are rolled out, and what chance you will have to play around with the new features before they go live.
3. Identify how sensitive data will be stored and maintained. When vetting tools, talk to vendors about their information security strategies. That should include questions about where their data centers are located, whether there are back-ups, and how your information will be secured. “You want to be confidant that the vendor’s interface won’t break your ability to maintain control over your data,” he says.
4. Upgrade your strategies along with the technology. Before choosing a new HRMS think about your existing HR processes and what could use improving. “When you upgrade to a saas-based HRMS, you have an opportunity to be innovative in areas where you are currently under-performing,” Hamerman says. That may mean taking advantage of mobile HR applications, workforce analytics, or social media tools.
Once you identify areas where your current system is lacking look for tools that will help you improve those results. But don’t let yourself become overly enamored by the bells and whistles, he warns. “It is up to the buyer to determine what features will add value for them.”
5. Look for a vendor who aligns with your culture and needs. You want to get a feel for a vendors business strategies and the way they work with clients, he says. “Looking at how they treat employees as well as their customers will give you a sense of whether they will be a good fit for your business.”
You also want to be sure their technology is the right size for your organization, and will be able to scale with you as you grow. If you have 50,000 employees, you don’t want a system designed for mid-sized companies – but it is just as important not to choose a solution that is too big for your needs. “A lot of the enterprise systems designed for big multinationals don’t scale down effectively.”
6. Ask your network for advice. It’s always a good idea to talk to existing customers – and not just the ones the vendor recommends. “HR professionals tend to be very well networked,” Hamerman says.
Take advantage of that network to find out what tools your colleagues are using, what they recommend, and what problems they have had with technology and the vendors that provide it. Use that feedback to make a more informed decision for your organization.