Selection of a Human Resources Selection of a Human Resources Information SystemInformation System

Employee Relations InstituteJanuary 24, 2002

Nona Tobin and Ron Komers

““An ERP installation is likely to be An ERP installation is likely to be the toughest installation your the toughest installation your company will ever undertake. company will ever undertake.

Whether you make it through this Whether you make it through this painful transition is dependent painful transition is dependent

upon how intelligently you upon how intelligently you approach the project.”approach the project.”

-Integrated Solutions, March 2000 by Doug Campbell

Framework for the DecisionFramework for the Decision

What is the context for making a major system commitment?

What do the top decision makers think is important for IT investments?

What is the organization culturally, politically and financially willing to commit to the implementation?

Levels of implementationLevels of implementationERP: incremental or “big bang”Web-enabled self-serviceHRIS Home-grown systemDifferent vendors for HRIS subsetsLegacy systems and band aids

““Enterprise resource planning Enterprise resource planning software, or ERP, doesn’t live up software, or ERP, doesn’t live up

to its acronym. Forget about to its acronym. Forget about planning-it doesn’t do that-and planning-it doesn’t do that-and

forget about resource, a forget about resource, a throwaway term. But remember throwaway term. But remember

the enterprise part. This is ERP’s the enterprise part. This is ERP’s true ambition.”true ambition.”

-The ABCs of ERP, Enterprise Resource Planning Research Center

Criteria for System Choice: Criteria for System Choice: Organizational CommitmentOrganizational Commitment

What is the impact of doing nothing?

What is economically feasible?Who are the system’s

champions?How much change will the

organization embrace? Or tolerate?

Common Causes of ERP FailuresCommon Causes of ERP Failures Nonconformance to

“Best Practices” Insufficient executive

sponsorship Inadequate preparation Heavy modification of

software Y2K was primary

implementation driver

Management did not ask “how do we want to do business?”

Led by inexperienced consultants

IT sidetracked by cool technology

Insufficient training Unrealistic deadlines

“Getting the Most out of ERP”-www.brightsolutions.com/erp

The larger the system, the greater top level commitment must be.

HR should not take the lead alone.The more HRIS connects with the

agency’s business outcomes, the more valuable the system will be perceived.

Culture Fit Analysis: Culture Fit Analysis: Determine the Stakeholders’ Determine the Stakeholders’

InterestsInterests

Culture Fit AnalysisCulture Fit Analysis

Align with organizational IT commitment and strategy.

What are some of the risks and realities associated with different options?

Involve unions early in choice between customization and “vanilla”.

Examples of Union ConcernsExamples of Union Concerns

Calculation changes, e.g, accruals

New style or automated pay advisory

Mandatory direct deposit

Dual employment

“Earn and burn” Hours vs. dates FLSA formula Security and

confidentiality Retroactive payments

Implementation Models: Risks Implementation Models: Risks and Realitiesand Realities

Best of breed vs. sole software provider All inclusive contract Separate vendors supply consulting vs.

software and other servicesContracts with payments due on

deliverables Time and materials contracts ASP: Automated Service Provider

Vendor DifferentiationVendor Differentiation

FunctionalityMarket shareFinancial viabilityCustomer service Support of business requirementsTechnology and architectureBusiness model: licenses/upgrades/fixes

Models: Risks and RealitiesModels: Risks and RealitiesGo nowhere without lawyers!Risk vs. Reward EquationMarket Place Risk:Will they be here tomorrow?WYSIWYG – Not!How many times can you ask for money?

GAO RFP Assessment AreasGAO RFP Assessment Areas Position Management Classification Recruitment Personnel Actions Benefits Administration Labor Relations Workforce Development

Time Processing Absences and Leaves Pay Processing Labor Cost and

Distribution Reports Reconciliation Records Retention System Requirements

Where can you go for help?Where can you go for help?

Model after other jurisdictions’ RFPsGFOA fee-based consulting Internal IT staffRFP for consultant to do system RFP

CostsCosts

Customization vs. going “ vanilla” Ongoing costs for development,

maintenance, and production Implementation consulting costs run 3-5

times the cost of the softwareOperational disruptions

Oasis Implementation Costs     

           

  A B C D E1

HRMS Implementation Costs FY 00-03        

2         

3  FY 99/00 FY 00/01

FY 01/02-02/03

Total Project Costs

4HARDWARE/SOFTWARE * 2,530,864 803,781 647,255 3,981,900

5ANDERSEN CONSULTING 2,381,666 6,773,859 0 9,155,526

6CONSULTANTS 240,138 1,151,095 0 1,391,234

7STAFFING 540,668 1,914,604 0 2,455,272

8TRAINING 14,653 152,200 0 166,853

9FACILITIES 87,748 81,567 0 169,315

10OPERATIONS 1,698,004 768,428 0 2,466,433

11Total HRMS Costs 7,493,742

11,645,535 647,255 19,786,532

12         

13

*Lease/Purchase Equipment won't be paid off until FY03.        

14         

15         

16

HRMS Ongoing Operation Costs FY 02-03        

17  FY01/02 FY02/03    

18HARDWARE/SOFTWARE 135,000 666,927    

19STAFFING 1,162,181 1,791,863    

20TRAINING 80,650 78,163    

21IT SERVICES 942,525 816,003    

22FACILITIES & SUPPLIES 977,285 525,976    

23CONSULTANTS 900,000      

24CONTINGENCY 900,000      

25HRMS UPGRADE   1,110,000    

26Total HRMS Costs 5,097,641 4,988,932    

Riverside County

““Any kind of IT project on an Any kind of IT project on an enterprise scale can create headaches of enterprise scale can create headaches of equal size. The largest single mistake equal size. The largest single mistake most government agencies make when most government agencies make when

undertaking an ERP project is to undertaking an ERP project is to underestimate the amount of change s underestimate the amount of change s associated with enterprise systems.”associated with enterprise systems.”

-Randy Hendricks, Anderson Consulting, in Government Technology

Magazine

Implementation SurprisesImplementation Surprises

Implementation SurprisesImplementation Surprises

Vendors promise more than they can deliver. Dedicate “best and brightest” during the

implementation. Ongoing staffing with higher and different

skills must be added.Interface issues are significant.Some users will never embrace the system.

““Over 60 percent of Consultant Led Over 60 percent of Consultant Led Technology Projects including new Technology Projects including new

systems Development, Package systems Development, Package Installation (e.g., CRM, ERP, etc.) and Installation (e.g., CRM, ERP, etc.) and

those involving Business process those involving Business process Reengineering utterly fail. And, 80 Reengineering utterly fail. And, 80

percent of consultant led projects don’t percent of consultant led projects don’t achieve the results they proclaim at the achieve the results they proclaim at the

project’s onset.”project’s onset.”

“Technology Consultant Failure Analysis”-www.gpsconsult.com

Data: Access and UtilityData: Access and Utility

Data entrySecurityReports

Lessons learnedLessons learned Scope creep adds to cost Training requirements are hugeCommunications must be intensiveProblem examples

– “reports to” field can’t be kept updated– work flow – much less than promised– data entry increases in HR – FLSA special problems

Personnel issues:Personnel issues:

Who is in charge?Who is in charge? Who is the ultimate system owner?Who is the ultimate system owner?

Comprehensive HR Capital Comprehensive HR Capital Management Solution?Management Solution?

Nobody has it all!Nobody has it all!

Elements of an EndElements of an End--toto--End SolutionEnd Solution

Company specific pool development tools

Candidate aggregation

Candidate communications channelScreening processes

Recruiter’s desktop

Ad selection (media planning)

Ad distribution (cross posting, targeting)

Workforce management and analytics

Response integration and management

Applicant tracking

Specialty candidate sources

Workflow management

Vendor management

HR system interfaces

Conclusion:Conclusion:

“You better love the system you “You better love the system you buy because you’ll be married to buy because you’ll be married to

it for a long time!”it for a long time!”