Planning of Acquiring HRIS

The HRIS development process refers to

the steps taken from the time a company
considers computerizing its human
resources functions.
Stages of system development

Phase 1: System
Planning

Phase 5: System Phase 2: System

Maintenance Design

Phase 3: System
Phase 4: System
development /
Implementation
vendor selection
PHASE 1- SYSTEM PLANNING
 Why planning is important?
 The overall system requirements and strategies need to be
developed at this stage such as the kind of data, analysis,
security, reports and other features users need

 Decisions must be made on whether there is a need for

new applications or just an upgrade to the existing ones
by eliminating redundancies in systems and data
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During planning, the project team need to decide:
 whether the planned systems should be developed
internally or acquired from a vendor;
 whether the systems should be integrated with other
systems or be one stand-alone system;
 whether the users need to acquire extensive computer
experience or none at all,
 whether the users have access to computer support or
they have to function in relative isolation (Help-desk?)
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 when the project should start and when it will end
 The estimated the resources needed to achieve their
project objectives such as (Ceriello & Freeman, 1991):
 hardware costs
 vendor charges for software and facilities
requirements
 consultant time
 custom software development
 documentation revisions
 user training (Ceriello & Freeman, 1991)
 Activities involved in planning

• Establishing the project team

1

• Defining system requirements

2

• Performing a feasibility analysis

3

• Obtaining support for the HRIS

4
Establishing the project team
 Who should be the project leader?
1. Hire a consultant – an HRIS expert
2. Hire a full-time project manager whom has been
certified by project management institute
3. Select someone who is involved in the project
and temporarily move him or her into the project
management role
4. An individual from the HR department
 The responsibility of HRIS project leader:

 Assume fulltime responsibility on the project

 Reports to the HR department
 Have well-developed project management and
communication skills, and work comfortably with top
management
 Have thorough understanding of the HR department’s
operations
 Have thorough knowledge of every HR area
 Team members
 Each member should receives a project assignment
appropriate to his or her background, skills and
experience.

 The scope of the proposed HRMS plays a key role in

determining the size of the project team

 For large projects, team members may include

representative from key HR functions, finance, and IS, as
well as HRIS consultants.
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The team should include both the:

1. Functional personnel – usually drawn from the

HR department in the form of HR professionals
with some technological proficiency
2. Technical personnel – HRIS specialists, system
analyst, database administrator and hardware
expert
 Steering committee
 Member is not strictly HR or IS managers, but the central
decision maker in the organization(i.e. top management,
finance, strategic planning, and line functions of the
organization)
 They meet periodically to:
 resolve high-level policy issues,
 review the feasibility of the proposed HRIS,
 monitor project progress,
 assist the project manager in establishing the project
scope,
 develop change management plan,
 assist the project manager in decision making.
 Defining system requirement
 System requirements
o are the configuration that a system must have in order for a
hardware or software application to run smoothly and efficiently.
o failure to meet these requirements can result in:
1. installation problems - may prevent a device or application
from getting installed
2. performance problems - may cause a product to malfunction
or perform below expectation or even to hang or crash.
In order to define system requirements, there various evaluations
and analysis that need to be performed.
Various Evaluations and Analysis for Determining
System Requirements
Evaluating current system

Evaluating another HRIS

User interviews and surveys

Business system analysis

Scenario analysis

Prototyping
 Feasibility Analysis

There are several types of feasibility analysis that have to be

performed
1. Technical feasibility
 Focuses on the current technological capabilities of the organization and
the technological capabilities required for the implementation of the
proposed system
 Typical questions asked during technical feasibility assessment:
• Do the hardware and software exist to implement this system? Are they
practical to obtain?
• Do we add on or patch the current software or start from scratch?
• Does our organization have the ability to construct this system?
• Can we integrate the new system with our current systems?
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2. Operational / administrative feasibility

 How well does the system fits within our organizational
context? Will this make us better?
 How much will our organization change because of the new
business and technical changes?
 How long will this take to do, and does the schedule fit our
business’s needs?
 If we have to squeeze, then what might we able to eliminate?
 Do we have or can we get the personnel to do this?
 Can people use the system?
 What kind of training do we need?
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 The assessment also include
 the likelihood of meeting the proposed implementation
schedule and delivery date
 The human factors – how the employee uses and works
with the system, the system’s usability [reflect the
effectiveness and efficiency of the system to the user]
and the training the employees receive
 Do not underestimate the human feasibility – studies
show that the usefulness and ease of use of the system
play a large role in system use and adoption
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3. Legal and political feasibility

 The best-designed and implemented
system can end up causing major
headaches for the organization if it
violates existing laws and regulations
 For example, if the HRIS fails to maintain
specific employee performance record
correctly, legal challenges of wrongful
discharges will be more difficult for the
company to defend itself against
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 Political feasibility focuses on the organizational

political environment in which the HRIS is being
implemented
 Issues such as power redistribution involving loss of
individual or department control can affect the
effectiveness of the implementation
 Individual who are negatively affected by the
implementation is likely to either overtly or covertly
undermine, resist or disrupt its implementation
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Typical questions asked:

 Does the implementation of this system infringe on existing
copyrights?
 Are we violating any antitrust issues by implementing the system?
 Does the system violate any governmental policies?
 For global companies: Does the system violate any foreign laws?
 Who is likely to resist the implementation of the system?
 Who may win or lose as a result of this implementation?
 What is the risk of system sabotage?
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4. Economic feasibility
 The goal is to determine whether the costs of
developing, implementing and running the system are
worth the benefits derived from it use
 To do this, the appropriate costs and benefits of the
HRIS should be identified, and precise values should
be assigned to each
 User support
 To make management understand and appreciate the
intangible advantages of the proposed HRIS
 Everyone should understand that the feasibility study
report provides estimates of time and costs but not
guarantees.
Identifying and Communicating
with HRIS Vendors/Consultants
 Vendor is…

 a company which supplies parts or services to another company.

 In the HRIS context, it refers to a company that supplies the hardware,
software and other services related to the information system for
managing human resources.
 Example of HRIS vendor

 HR 2000 Sdn Bhd [Quick pay (Malaysian payroll); Quick staff (HR);
Quick T.M.S (Malaysian time management]
 Qne Software Sdn Bhd [Qne payroll]
 MYOB payroll
Consultant…

 is an individual or a company that provide services in the form of

advice in a particular area of expertise such as management,
accountancy, technology, law, human resources, marketing, etc.
 in the context of HRIS, consultant refers to any professional
who offers advices to client regarding human resources and
information systems used for managing human resources for
a fee.
Depending on the need of the company,
consultant can serve as:

 a project leader, with significant

organizational and political ability,
 a technical expert, or
 an additional staff resources.
When consultants are needed?
 According to Ceriello and Freeman (1991) the help from a consultant is
most beneficial when:
 Consultant’s knowledge and experience exceeds that of internal resources
 Consultant keeps current with and can apply state-of-the-art concepts
 Project has limited funding, which may dissolve if not promptly or properly
used
 Project has an unrealistic time frame or schedule
 Limited availability of qualified internal resources
 Application must have special functions or features not normally part of
vendor’s packages
 Project is at a standstill because of analysis paralysis
 Consultant can achieve better, faster or cheaper end result
 Selecting vendor/consultant

• Information sources
Identify

• Request for information

• Request for proposal
Communicate

• RFP responses
• Product demonstration
Evaluate • Background check
 Sources of vendor/consultant
Internet
Consultants Computer
manufacturers

Mail order and

catalogs Other users

SOURCE

Directories
Trade associations

Human resources
conferences Computer and Human resources
information trade publications
systems
publications
 Request for information
 Essentially a letter sent to vendors/consultant with the purpose of finding
out whether the vendor/consultant is interested to become a supplier to
the company.
 A standard business process that is used to collect written information
about the capabilities of various suppliers.
 It describes the project in one or two pages, then requests that potential
vendors to provide an expression of interest and a list of their
qualifications.
 Based on the reply from the vendors, the list of potential vendors is
further reduced to only those that the company deemed qualified to be a
supplier.
 Request for proposal
 An RFP is a document that solicits proposals and bids for proposed work
from potential consultants or vendors
 A document sent to potential vendors to tell them about the system that
the company needs.
 This document describes in detail the company’s HRIS requirements and
asks each qualified vendor/consultant to submit a bid.
 Basically, RFP will define what is needed and what is not needed in the
system
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 An RFP defines the organization’s goals and
requirements for the new information systems
 It provides the detail that define hardware,
software & service requirements
 For the organization, it provides structured
approach that minimizes that chance of
omitting important criteria
 Recommended component of RFP
1. Data about you
1. Introduction
 Who are you in the business?
2. Proposal  Business requirements
instructions  Technical requirements
 Delivery timeframe needed
3. Functional
requirements 2. Requested data from vendor
4. Vendor requirements  Vendor details
 System pricing
5. RFP administrative  System details
 Customer references
 Sample contract terms
Kavanagh & Thite
Ceriello & Freeman (1991)
(2009)
Component of RFP – Ceriello & Freeman (1991)

1. Introduction
 Describes the business profile and statement of objectives – briefly explain
about the company, the required HRIS and the environment in which it
must operate.
2. Proposal instructions
 describes the format of the proposal, and other related rules that is
necessary to make the evaluation process easier.
3. Functional requirements
 explain general and detailed requirements in each functional area of human
resources affected by the proposed HRIS.
continue…
4. Vendor/consultant requirements
 a section where vendor/consultant provides information on product name,
version, release level, history and a list of references of other clients. Other
than that, information regarding training, conversion, acceptance testing
process, implementation support and procedures for fixing bugs are also
obtained.
5. RFP administrative information
 a section that describes the administrative terms and conditions bidders
need to consider when reviewing and responding to the RFP.
Component of RFP – Kavanagh & Thite (2009)

1. Data about you

 Who are you in the business?
(company size, scope, industry, annual sales, locations, etc.)
 Business requirements
(required business processes, functionality, and project scope)
 Technical requirements
(does it need to work with a particular operating system, existing
organization systems etc?)
 Delivery timeframe needed
(is there a desired target implementation date?)
 Continue…
2. Requested data from vendor/consultant
 Vendor/consultant details
(company size, scope, annual sales, experience, number of implemented
applications etc)
 System pricing
(may include license fees, maintenance charges, training costs,
implementation costs and support costs)
 System details
(functionality included in the system, if customization is necessary, how will
this be addressed?[timing, delivery, cost, support etc], supported
technology now and in the near future, customer support options,
training options)
 Evaluating RFP responses
 Evaluation worksheets
 Assigns points to each response by a vendor
 The weighting of responses depends on the importance of that feature or
function to the organization
 Example: Evaluation worksheet

Software characteristics Vendor 1 Vendor 2 Vendor 3

Support for HR functions
Modularity
Subsystem integration
Ease of modifying
Database management
On-line inquiry
Rapid sorting and retrieval
Error trapping
Edit and validation features
Flexible defaults
Menu driven
 Evaluating product demonstration

 If possible, test the software in a working environment.

 HRIS project team should assist in developing an agenda and
arrive at the demonstration with a list of questions and issues the
members would like to discuss
 The demonstration should clarify how the various HR functions
would interact under the new system
 Required integration and interfacing capabilities should be tested
as much as possible.
 Background check
 Once finalist have emerged from the evaluation process , get a list of
references from the vendors in the finalist list.
 Firms to whom those vendors have sold their software
 Find out
 client’s satisfaction
 The functionality of the system
 The implementation process
 The quality of training provided
 Overall performance
 Post-implementation enhancement
 After sales service
 Types of modifications made
 How the vendor resolves problems
 Evaluating vendor – Kavanagh &
Thite (2009)

 Functionality – how fully the functionality of the HRIS meets the

HR needs
 IT architecture and IT integration – need to know whether the
HRIS will be a stand-alone system or a networked system or web-
based one; will want to know with what technology or platform
the HRIS has been developed (UNIX, Linux, Windows); the
extent to which the HRIS will integrate within the broader
corporate IT architecture
Continue…
 Price – price will ultimately determine which system is selected; visible
cost (software and hardware); less visible cost (customization cost,
training cost, upgrade cost, cost of operation and maintenance over time,
licensing fees
 Vendor longevity and viability – quality of vendor itself
Consultant…

 is an individual or a company that provide services in the form of

advice in a particular area of expertise such as management,
accountancy, technology, law, human resources, marketing, etc.
 in the context of HRIS, consultant refers to any professional
who offers advices to client regarding human resources and
information systems used for managing human resources for
a fee.
Depending on the need of the company,
consultant can serve as:

 a project leader, with significant

organizational and political ability,
 a technical expert, or
 an additional staff resources.
When consultants are needed?
 According to Ceriello and Freeman (1991) the help from a consultant is
most beneficial when:
 Consultant’s knowledge and experience exceeds that of internal resources
 Consultant keeps current with and can apply state-of-the-art concepts
 Project has limited funding, which may dissolve if not promptly or properly
used
 Project has an unrealistic time frame or schedule
 Limited availability of qualified internal resources
 Application must have special functions or features not normally part of
vendor’s packages
 Project is at a standstill because of analysis paralysis
 Consultant can achieve better, faster or cheaper end result
 Evaluating consultants
Content of RFP
 Introduction – information on the firm, the
required services, and the major goals and
objectives of the study
 Proposal instruction
 Scope and deliverables of the consulting
assignment
 Consultant qualifications
 RFP administration
Evaluating consultant
Technical and human resource
knowledge

Experience with similar projects

Effective communication skills

Independence from any particular

vendor
According to Ceriello (1991) the consultants
can be classified into 3 categories which are:

1. operational
versus
advisory,
2. process versus
functional, and
3. academic
versus
commercial.
Operational versus Advisory

Operational • More concern about executing and completing a

certain project rather than teaching clients how to
consultant perform the work and manage the system.

• Informs and supports in-house management, and at

Advisory the same time encourages the management to make
consultant the decisions and learn about the system as they go
about in completing the project.
 Process versus Functional

• A generalist or planner who provides useful

Process guidance in organizing the project or
consultant intervening in conflict resolution, but leaves
operating details for in-house staff.

• Well versed in the practical aspects of HRIS

Functional planning, development, and
consultant implementation. They can even extend
those skills to other phases or projects.
 Academic versus Commercial

• Have vast knowledge in the

Academic
theoretical and practical
consultant
aspects of HRIS projects.

• Have hands-on experience

Commercial
with regard to the
consultant
implementation of HRIS.
Contract and warranties
 Why good contract is needed? (meade 2003)

It tells what the software is going to do

It specifies what the product is going to cost

It spells out the support that the client will receive

It spells out any exceptions or special requests the client

may have made

It gives the client a basis for a formal grievance

 Contract is…
 a formal written agreement between
two people/organizations on certain
business agreements (Ceriello &
Freeman, 1991).
 a binding agreement between two or
more parties for performing, or
refraining from performing, some
specified act (s) in exchange for lawful
consideration.
 The main role of contract:

 it clarifies responsibilities and limits for individuals or entities involved

in a business relationships.
 some rules apply:
1. the contract cannot encompass all eventualities, but it should cover the
major risks involved and clearly set forth the intentions of both parties;
2. the contract should be written, executed and filed; and
3. the project team should use legal counsel in developing and negotiating
contracts because of the high value of the software purchase and the even
higher cost of failure.
 Tips for successful negotiating

 Negotiating team should contain one or more members of the

HRIS project team
 A typical team usually include project team manager,
representatives from the technical, functional, legal, purchasing /
procurement, financial and consultant, if one is involved
 Contract negotiations should begin even before the firm has
decided to acquire the products and services of a particular
vendor – should negotiate early and often
Continue…

 To get the best terms and prices, the negotiating team must keep
potential vendors competing until the last minute
 To maintain control, since negotiating for HRIS contract involve
more than one meetings, the team should arrange to hold
negotiations at the organization’s site rather than the vendor’s
 Negotiations should deal with overall issues before working
through details
 The contract should contain as many provisions on which the
firm’s negotiating team has decided as possible
 Financial options in service
contracts
a) Fixed-price contract
b) Time-and-materials contract
c) Cost reimbursement contract
d) Retainer contract
 Fixed-price contract
 the simplest and classic contract
 The consultant/service provider and client
(project team) must agree on the price to be paid
for the HRIS project.
 This price cannot be changed unless the scope of
work is changed, and the consultant/service
provider is entitled to payment only if the
contract is completed successfully
 Suitable for low-risk project
 Time-and-materials contract

 The client (project team) and consultant/service provider agree on

the amount to be paid for HRIS services.
 The total amount paid depends on the number of hours worked
plus material at cost.
 fees-and-expenses contract.
 used when it is not possible to estimate the extent or duration of
the work or to anticipate the total costs.
 Cost reimbursement contract
 Has some characteristics similar to both time-and-materials and fixed-price
contracts
 The consultant/service provider is reimbursed for the costs it actually incurs.
 A total cost estimate will be determined at the beginning of the cost-
reimbursement contract, to allow the project team to budget for the HRIS
project and to establish a maximum amount for reimbursement.
 Appropriate if a project has a high level of uncertainty in scope, design or
time frame
 Retainer contract

 used when the project duration exceeds six month.

 The consultant/service provider will fix number of days per
month in order to charge a lower rate over the period.
 The project team needs to guarantee that the consultant /service
provider will remain on the project throughout the period.
 Factors in choosing a financial arrangement
for consulting services

High
Cost
Retainer Reimburse
ment
Project
Uncertainty
Fixed Price Time and Materials
Low

Low Medium High

Risk
WARRANTIES
 Warranties

 Refers to a contract that

protects the client in the
event of certain types of
problems, defects, or
deficiencies in the product or
service provided.

 describes the conditions

under, and period during,
which the vendor will repair,
replace, or compensate for
the defective item without
cost to the client.
Some of the provisions for a good software
warranty (Ceriello & Freeman, 1991, p.246)

 The vendor agrees to replace defective disks or tapes on which

their software is shipped.
 The vendor guarantees to fix any bugs that occur within a given
time period.
 The vendor will make updates and revisions available at nominal
or no cost.
 The vendor states in writing that the HRIS software will run in
the client’s computing environment.
 The vendor warrants that the software conforms to the vendor’s
own specifications for performance criteria, such as run time,
response time, and maximum downtime.
End of phase 1…questions?