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Hazards at the offing ? How to Unnecessarily Overspend on HRMS Software Implementation?

December 01,2014

When it comes to deploying a human resource management system (HRMS) software, it is practical as a rule considered that cost issues will stand as a factor. It is on these lines, a 2010 Aberdeen Group report went on to find that cost issues were at the top of 65+% of respondents’ lists when the question came to dealing with regard to HR technology solutions—hands down the highest rated criterion listed in the study. Still braced with that of a melange of interrelated technical, people, plus project issues that arrive in the area entailing HRMS automation, nailing down how to account for these costs and stick within the budget is an ever-present challenge. Prudent organizations need to be cognizant that there are countless procedures in which a budget can spiral out of control and go on to weaken an HRMS project—of which the below-mentioned tips are just a sampling. Nevertheless, by way of subscribing to these tips, it’s all but guaranteed that you’ll overspend on your next HR software implementation.

HRMS Software Tip #1: Going over budget by way of poor planning:

Making clear the expanse of your HRMS project in as much detail as possible stands instrumental to staying under a budget ceiling. Unfortunately, a motley of organizations cherry-pick what is known as the “wait and see” technique to these projects, neglecting the planning phase instead of starting implementation quickly. In the wake of most HR software vendors (and fraternity of best practice-driven HRMS consultants) will provide a ceiling estimate, it should be noted that without thorough planning, that estimate is based on limited services and is little more than a flimsy guideline. In order to avoid this potential stumbling block, make sure that your project scope documentation at a minimum involves specific HR software modules, followed by use cases, data conversion, interfaces, reports, customizations, numbers for training and an estimated time for normal project management and the inevitable issues that will require attention and resolution.

HRMS Software Tip #2: Adding on to hulking costs thanks to poor personnel:

Every Time an HR system is being implemented, it is the case that the vendor will appoint an installation manager or the organization at hand may engage an HRMS consultant to offer some independent plus specialized expertise (Also in many projects both actions will come into play). In spite of whichever option is employed though, a major question that should come across, reads: how many times have they installed this particular HR system in the past? The reply to this will go on to shed light on just how much personnel experience you’re getting for your investment—an answer that could potentially cause you to re-evaluate your implementation approach. Implementation consultant Clay Scroggin recommends not using anyone with less than five installs under their belt, citing that “until they have performed a large number of installs they won’t be able to handle all the pitfalls and issues that inevitably arise”. And each one of those pitfalls at store can wind up costing significant time as well as money.

What is more? if an organization is paying for external consultant expertise to handle a successful implementation it can be tempting to ‘leave things to the experts’. Depending on the magnitude of the organization, it may be preferable to appoint a full-time project manager from HR or IT for the duration of the implementation. Either way, an experienced manager should take stock of- not just liaison’s sake but for internal management of the project plan, ensuring that costs stay within (or at the minimum close to) estimates.

HRMS Software Tip #3: Fuels costs up, courtesy, poor training:

Perhaps no other aspect of HR system implementation is as under-valued or misunderstood as that of training. Yet, the absence of a detailed training strategy (or misaligned training content) can absolutely negatively affect implementation—resulting in a lack of user readiness for go-live, procrastinated user adoption, a drain on company resources, and a rapidly foregone budget. Organizations are then left with a choice either between a) delaying the HR system go-live and/or b) putting additional support in place to compensate—of which neither option is optimal. As such, it is crucial that organizations put serious thought into the granular structure of the HR software training strategy if costs are to be checked.

HRMS Software Tip #4: Overspend with inefficient testing:

PSC Group’s Mary Ellen O’Neill identifies the HRMS testing stage as, “the most time-intensive aspect of the system implementation.” Indeed, without proper testing of the system, metrics of configuration, followed by integration, and for that matter any customized routines that have been added, the system will go-live with the issues and faults unidentified—faults that only wind up emerging later when the HRMS is in live use and therefore far too “business critical” to put a halt to. Testing should start with existing HR software data sampling. The data conversion to the new HR system is all too frequently one of the first project delays encountered—and thereby pushes back many subsequent project plan activities early in the implementation process. Few implementors recognize the quality of their data, and when they do ultimately recognize that the data is dirty (i.e. to say incomplete data, as well as inaccurate data, duplicate data, data missing required fields, etc.), it can be a tedious, time-consuming and costly exercise to cleanse it before it goes into the new system.

HRMS Software Tip #5: Separate the system to up-end your budget:

It tends to come across as premature to talk of system integration, as quite often an HRMS is a foundation on which other systems are built; but some best-of-breed point applications may already be in place, (e.g. certainly payroll is likely to be already automated) or will be added in the near future. In these instances, seamless integration is paramount to realizing end to end business process automation and the planned-for cost savings.

Writing on The Wall with regard to HRMS Budget Overspend:

While there are some major cost decisions present at the HR software selection stage, such as whether to go with Software-as-a-Service (SaaS) or on-site deployment (it is worth noting that SaaS avoids some of the above overspend pitfalls), as’s Clay Scroggin says, “The only variable cost associated with a [HRM] system install is going to be the implementation.” In any HRMS implementation, a tight rein is needed, on both the project and the people involved, in order to avoid an unexpected impact on the dollar count.