The human resource information system (HRIS) is the industry’s venerable employee system of record, housing core information like payroll, benefits, hours worked and compliance data efficiently. But if you’re looking to upgrade or modernize an HRIS and have been away from the market for a while, you might be surprised at the new features available to help transform these software systems from mere data repositories into tools for strategic talent analysis.
HRIS vendors have evolved offerings to keep pace with shifting workplace trends and technologies, giving HR technology leaders new deployment options as well as new functionality for mobile users and social media applications.
While many cash-strapped organizations continue to focus on maintenance or customization of an old-generation HRIS, others are upgrading legacy systems to create a more integrated approach to people management and to generate more meaningful workforce reports.
The HRIS of old was designed to meet payroll needs first and human capital needs second, said Jason Averbook, CEO of Knowledge Infusion, a Minneapolis-based human resource consulting firm. But next-generation HRIS platforms, which often include more talent management components, flip that formula.
“The desire of most HR leaders no longer is just to count heads but rather to truly understand what employees are made of, identify their best recruiting sources, determine what current skill sets look like, assess people’s potential for promotion and more,” Averbook said. “The worlds of core HRIS and talent management systems are blending and blurring and in the next few years will be seen as one and the same.”
One of the biggest changes in the HRIS market is the new choice HR leaders have in how they can access or deploy systems. Those opting for the “software-as-a-service,” or SAAS, delivery model vs. an on-premise software installation represent a growing part of the market. SAAS refers to accessing vendor software over the Internet rather than installing it on a company’s internal computers.
“We are seeing increased interest in our SAAS and public cloud offerings, particularly in talent management systems but also our core HCM [human capital management] products,” said Anand Subbaraman, senior director of HCM products at Oracle Corp., which sells the PeopleSoft line of HCM products.
Oracle believes that customers want choice, so it provides options to mix and match delivery models. For example, one of its Fortune 500 customers runs Oracle’s E-business HRIS suite on site, but accesses Oracle’s Fusion talent management modules through a public cloud.
The benefits of SAAS include quicker installation and start-up time than on-site systems, lower IT maintenance demands and infrastructure costs as well as ubiquitous access. “Software upgrades and enhancements also can be made faster with SAAS solutions,” said Tiffani Murray, an independent HR technology consultant based in Atlanta. “With on-premises ERP solutions, changes often have to be bundled and tested across numerous computers before being rolled out, which takes time and can be cumbersome.”
Katherine Jones, principal analyst and research director at Bersin & Associates, an HR research and consulting firm in Oakland, Calif., said SAAS models can have cost advantages as well. While SAAS isn’t always less expensive than installed software, its initial costs are usually less onerous.
“What SAAS does is shift costs from a major initial capital cost outlay, plus periodic and potentially significant upgrade costs, to a more steady annual subscription expense,” Jones said.
But Jones added that it’s important not to overlook some key factors when negotiating SAAS contracts. Among them is guaranteed system uptime. “If the system goes down, you should have it in writing that you receive something in return, such as additional free time or money back,” she said.
SAAS isn’t for everyone, however. Some security-sensitive organizations, such as government agencies, prefer an installed HRIS to maintain control over data security and customization options. Experts noted that many SAAS vendors have made important strides on the security front.
“Once someone in HR understands the concept of compartmentalized data, and that their personally identifiable information or ‘secret sauce’ won’t be shared with competitors because they’re using the same multitenant application, they usually rest easier,” Jones said.
Today’s technologies create new options for integrating talent management systems such as recruiting, performance management and learning management with the core HRIS mother ship. Such integration, when executed well, can enable more strategic talent analysis as well as reduce redundant data entry or storage.
True systems integration—where data is entered or updated in one HR system and is changed automatically in another—can take workforce metrics to a new level.
"Integration allows you to more easily create reports like how many people [who were] onboarded through process X vs. process Y end up in your high-potential channel, or to examine how well managers did in international assignments after going through certain training or development programs," Jones said.
Averbook said today’s integration methodologies can allow HRIS managers to connect systems in increasingly elegant and sustainable ways. In the past, HR often created only one off or point-to-point interfaces between systems in or outside the department. But the cost to maintain those connections can be high.
“The minute one of those systems changed, either inbound or outbound, you had to go back and retest everything,” Averbook said. “Today, integration technologies allow you to build those connections in a one-to-many, rather than one-to-one, configuration, which in the long term reduces the total cost of ownership considerably.”
It’s important that integration initiatives allow HR processes to talk to one another, Averbook said, not just be designed to interface data sets.
“You want to build a technology architecture where as people move from HR process to process, or within processes, they aren’t forced to jump to multiple systems or have to enter data multiple times in multiple systems,” he said.
Mobile and Social Options
New-generation HRIS and talent management software reflects a growing desire by users to access HR data and conduct transactions from mobile devices as well as to incorporate social networks for things like recruiting.
On the mobile front, these features aren’t restricted to finding and hiring talent. More are focused on tasks like shift scheduling—enabling managers to review and approve time cards from the field, for example—in sync with payroll systems. Other applications enable employees to check things like vacation day balances and paycheck stubs by texting from smart phones or iPad devices.
Oracle’s next-generation Fusion HCM platform represents a nod to changing workplace trends and technologies, Subbaraman said. “With globalization, growth of contingent workers, mobile devices and social networking, things have shifted dramatically in the past decade,” he said.
Start from the Finish Line
The ultimate goal of any HRIS shouldn’t be simply to process or house accurate employee data efficiently, Averbook said, but rather to generate meaningful reports or analytics that help manage talent better.
“Before you implement any of these systems, you have to think about what your output and analytics are going to be,” he said. “If you focus on getting the system implemented and configured, and only then try to figure out the reporting end, you are too late. You’re in need of a new system before you’ve even gotten it warmed up.”
Dave Zielinski is a freelance business journalist in Minneapolis.
Cloud Computing and Security, SHRM Online Technology Discipline, August 2011