Looking for a new HRM system? Start by looking inward!

Erik Hamberg, Total Rewards Director at Alektum Group

So, you have been tasked with procuring a new HRM system for your organisation. Or maybe you have even taken it upon yourself to suggest this sort of investment to your CEO or the general management team.

Congratulations! Based on my own experience, I would say that you have a thrilling and educational process ahead of you.

But what are the reasons behind this being a priority task right now? What is the expected outcome of implementing a new HRM system? And what does it actually entail to invest in an HRM system for your business in particular?

These are three questions that you probably should give some serious thought to before starting to attend various demo meetings with an arbitrary selection of suppliers – that all want to sell you their more or less useful HRM system solutions. And there are quite a few of those available on the international marketplace.

For what?

Making a clear and conscious decision on what the real needs are – that are to be filled by your new HRM system in your organisation - is essential for making a relevant and cost-effective investment. What features and functionalities are useful to your organisation? For instance, do you really need an integrated full-suite system, or would a more specific (and perhaps more cutting-edge) set of tools – perhaps from different suppliers – be more helpful to you? Bigger is not always better, though quite often more expensive, it seems.

For whom?

Explicitly deciding for whom you are procuring an HRM system is another key issue to ponder: Who are the primary users? Later in the process, having involved potential stakeholders and representatives from different parts of your organisation early on in the procurement process will most likely be a vital ingredient in the recipe for a successful implementation – of any HRM system you might finally choose.

"Procuring an HRM system really is an investment for your organisation and a rather long-term one at that"

If you forgo having this wide-lens introspective starting point, you may end up with a lot of ‘good to have functionality’ that has been pushed by the system vendors that, unfortunately, nobody is really using in your everyday business operations – or even worse, you may get stuck with a system that does not even fill your business’ most basic needs.

Just looking at myself, having my professional focus on the comp & ben and labour law aspects of the HR palette, I might advocate for choosing an HRM system that has state-of-the-art modules for compensation reviews, incentive programs or managing employee relations matters – but I am only one of potentially hundreds or thousands of system users in my organisation, who may all have very different priorities than mine. For instance, supporting your recruitment process is probably another function for which your talent acquisition team will have a great need from the HRM system. On the other hand, if you see a greater need for all managers and employees to use the HRM system – for facilitating performance and development dialogues, etc. – that sort of functionality (including the general user experience or system usability) might have higher priority than more specialised functions that maybe only members the HR department will be using. Meanwhile, perhaps the communications department is looking for an easy-to-use platform for directly engaging employees and, from time to time, informing everyone about what is going on in the business. The IT department surely would want the HRM system to be part of an automated process for assigning logins, permissions and computer hardware to new employees. You get the picture: If you deep-dive into the potential offered on the HRM systems marketplace, the list of possible uses, and thereby possible internal stakeholders, may seem almost endless. You will need to prioritise in the best interest of the business development strategy.

For when?

Also, trying to look ahead to identify possible future needs can be an important consideration, especially for growing businesses. Finding an HRM system supplier that, at least to some extent, is prepared to 'grow with you’ and adapt (both technically and contractually) to your ever-evolving needs can be much more valuable than being offered a fully developed, out-of-the-box, one-size-fits-all (or maybe none, really) solution from the start.

Procuring an HRM system really is an investment for your organisation and a rather long-term one at that. I am saying this not primarily because of the rather substantial direct cost of most HRM systems but because of the work hours that will be spent by all users (potentially all employees in one way or another) just learning how to use the system. This is probably the biggest reason why the procurement cycles for HRM systems, in general, are so long. Most organisations simply cannot afford to spend the man-hours going through the implementation process of a new HRM system too often. This means that if you choose unwisely and procure a system that does not effectively support the business’ everyday operations or its development plans, you might not get a chance to correct this mistake for another 5 to 10 years at best.

Forwards!

On the other hand, waiting for too long to invest (or reinvest) in a more business-relevant HRM system may result in the progress and development of your business being hampered – which brings me back to the first three questions, forming the simple basis for a business case in any situation. Being able to connect a proposal to invest in an HRM system to actual business needs – not only for the HR department but for all potential stakeholders within the organisation – is not only imperative for procuring 'the right system for your particular business. It is most likely also key for getting the go-ahead to start the procurement process in the first place.