The shockingly high failure rate of HRIS rollouts indicates faults on the side of employers and vendors. Here’s what goes wrong, and how HR technology implementations can be improved
HR technology is big business. A report by KPMG claimed that 30% of organisations intended to replace their legacy HR systems in 2016, while 40% planned to move their operations to the cloud.
Despite this push, technology research firm Gartner says 50%-75% of all enterprise resource planning (ERP) projects fail. While the HR module will be just one chunk of an overall ERP pie, it’s a scary statistic. When it’s broken down further, some 48% of surveyed business leaders admitted they find the range of solutions confusing; 50% found a lack of industry standards made it hard to compare solutions; and 50% said the flexibility of the solution was often unclear. Thirty per cent were unsure about the level of honest and transparent advice they were being given.
Nick Southcombe, general manager at Frontier Software, is not surprised by the failure rate statistic, and suggests that if just HRIS failures are considered, the rate would likely be higher than 50%-75%. For payroll rollouts, however, the news is more positive – Southcombe suggests these rollouts actually have a higher than average success rate. The reason for this, he adds, is simple: “It’s because there are clear objectives set and
there’s a lot at stake, even more so than with a HRIS rollout. You’ve got to get your payroll right and we’ve seen what happens when companies get that wrong. No vendor wants to be front-page news.”
Talking of vendors, Southcombe suggests HRIS rollouts are often a shared responsibility on behalf of the employer (or client) and the vendor – and evidently both parties have work to do.
What goes wrong?
In many ways, HR professionals would do well to look at how and why payroll technology rollouts are on the whole more successful than HRIS rollouts. Southcombe says those people dealing with payroll systems are often systems-oriented. They know their data and they’ve got a defined objective and a well-defined time frame – that is, along the lines of: “We must be live by this date because the vendor is discontinuing support.”
Southcombe says that often HR technology projects are ill-defined and objectives are vague at best. Something like: “We need to have an online recruitment system” is deemed sufficient. “Often they are just generalised motherhood statements and HR hasn’t adequately defi ned what the criteria or the objectives are, and also what the critical success factors are for the project,” he says.
Southcombe adds that this is not due to a lack of due diligence; indeed, he says that most software solutions are adequate and will meet at least 80% of the required functionality. It’s more due to poor management and planning upfront.
HR technology rollouts also go wayward when they don’t have an imperative deadline for completion. “Usually a payroll project is defined with a deadline,” says Southcombe. “Without that it’s easy to lose focus on the project.”
Another key element to consider is the lack of established processes in the HR function. Unlike other technology areas – be it financial or payroll, e-commerce solutions or supply chain systems – HR rarely starts from a process-based orientation.
“A lot of HR can be a bit more laissez-faire and not well-defined. What software products and platforms are good at is working with defined processes,” says Southcombe, who adds that he’s worked with many organisations that do not have processes documented. As a result, they may underestimate the work they need to undertake with the vendor to ensure old processes are covered off and new processes are established.
“My view is that successful implementations occur when the HR department has a very good in-house HRIS administrator,” Southcombe says. “That doesn’t mean they’re HR practitioners per se, but it’s someone dedicated to managing a system.”
Sharing the blame
Refreshingly, HR is not solely to blame for technology failures; vendors also have a role to play. Southcombe says that while it’s easy to blame HR for not understanding the importance of processes and time frames, he suggests vendors are also failing because they are not coaching and providing process consulting to their clients.
He also says that many projects are failing because there are poor out-of-the-box solutions offered.
“Vendors will suggest an online recruitment system, but they fail to ask how the client needs that configured for their organisation. They expect the clients to know all the answers when maybe they’ve never had any experience with an online recruitment system before.”
A consultative approach will help clients make the best choice, Southcombe adds.
“It might be that there are four possible solutions and the vendor needs to walk through the pros and cons of each solution. Vendors are good at selling and promoting what the benefits should be, but maybe they need to be stepping up with assisting clients to achieve successful implementations.”
How about training during and after implementation – should vendors play a role there too?
“Most systems are highly configurable so, for example, the implantation of our selfservice kiosk in one client will be entirely different to another client. Typically we find clients prefer to do their own training because it’s bespoke and tailored to their needs and requirements. It’s slightly different for the HR specialists like recruiters, for example. They need to be trained in the backend functionality, but I’d consider that separate to end-user training.”
However, Southcombe adds that training requirements should be minimal as the end user experience should be at the top of the designers’ or coders’ priority list.
“Really the vendors should be designing systems that require little to no training. What training did anyone ever need to apply for a job on SEEK? Or training to use Facebook or Twitter? It should be intrinsic and intuitive.”
And how about the popular theory that any significant technology rollout should first be trialled with a smaller group? Southcombe advises that this is certainly preferable in cases where an organisation is transforming from no or limited HR technology, to dedicated platforms such as performance management. Frontier Software itself takes this approach, but it’s more so that developers can use their own code first and make necessary amendments. The software will be prototyped and used in one or two departments before it’s rolled out through the organisation and then onto the market.
When replacing a like-for-like system or switching from one vendor to another, Southcombe suggests a “big bang” approach is perhaps more effective. “People are used to dealing with a system so, for example, you’re replacing one self-service kiosk portal to enter your sick leave to another. Doing it in one go is probably easier on the business – provided that the change management and communication occurs, and the software is intrinsic to use.”
He adds that the personal nature of payroll and many HR technology functions means it’s critical to get it right. “Payroll in particular is the most personal type software. It affects everyone and obviously everyone wants to be paid correctly. But then think about all HR technology functions. People care about how they’re rated in a performance review. They care about how they are treated in the recruitment and onboarding process. So it’s really all personal.”
Founded in Melbourne, Australia in 1983, Frontier Software is a global leader in human resource, talent management and payroll solutions. Their solution ichris sets the global benchmark for functionality and improved employee experience. With support offices in Melbourne, Brisbane, Sydney, Canberra, Adelaide and Perth and key global locations, Frontier Software is well placed to service its 1,700 clients.