Many organisations that move to an HR Information System do so while replacing ageing payroll software. Teresa Russell talks with two companies that moved to e-HR for strictly strategic purposes, then customised the systems to suit their organisations’ cultures.
Many organisations that move to an HR Information System do so while replacing ageing payroll software. Teresa Russell talks with two companies that moved to e-HR for strictly strategic purposes, then customised the systems to suit their organisations’ cultures
Many HR professionals take the opportunity to upgrade their Human Resources Information System (HRIS) when payroll systems are no longer able to cope with the organisation’s requirements. The thinking is ‘we may as well do it now while we have the budget’ and certainly that helps justify the cost. Then comes a search for a suitable payroll system with good HR add-ons such as employee self service (ESS), recruitment management and analytical HR reports.
Although there is nothing wrong with this approach, Investec Bank Australia’s experience demonstrates the opposite approach. The bank went from having no HR system, plus outsourced payroll, to a fully automated system. It was a strategic decision in a growing company.
Pearson Australia Group is the country’s largest publishing company, with a diverse range of educational and consumer books. Pearson moved to an extensive suite of HR modules (including ESS, remuneration review, performance appraisal, training, recruitment management, policies, procedures and HR forms) without changing its current payroll system. This too was a purely strategic decision.
Drivers for change
Investec currently employs 170 people in Australia, located in Sydney, Melbourne and Brisbane. Anthony Rubin, Investec’s company secretary says that when the company reached 100 people, it was the right time to bring the HR system (including payroll) in-house for control purposes. Plus “we had no proper HR records or systems and a very limited HR function at the time. We knew we wanted a paperless, automated system,”says Nicole Fegent, Investec’s HR manager. The company’s UK parent was looking at changing to the same supplier, which also influenced Rubin’s decision.
Pearson’s change was born out of its 2004 three-year people strategy, which required HR to be more strategically and less operationally focussed. “We needed to deliver better on the operational front with faster response times and improved quality and accuracy of data. Once that was achieved, we were able to become more strategic,” says Lisa Sheehan, human resource director for Pearson.
There were several other benefits in moving to a paperless system. “We empowered managers to be more responsible for their teams. Plus it is environmentally friendly and [there are] nominal cost savings if you don’t print out 550 payslips every month,” she adds.
Choosing a supplier
In 2003 when Investec was looking for a vendor, it went in search of a fully integrated HR and payroll system, but found that ESS became a distinguishing factor between suppliers. Price was also a factor and their choice was comparable to others in the market.
Once Sheehan decided that the current payroll system was meeting Pearson’s needs, this became the key limiting factor in terms of potential suppliers. Only two vendors were able to provide a full suite of products that was compatible with Pearson’s existing payroll system. “We also looked at where the vendors were in terms of their development of the product, how easily it could be tailored to suit our corporate culture requirements and looked at the types of clients both suppliers had, then reference checked them,”says Sheehan. She chose a supplier that had clients similar to Pearson in size and reputation.
Branding and customising
Both Pearson and Investec wanted an HRIS package that could be tailored so that it looked and felt like something that belonged to their business, reflecting their organisational culture. Investec ran a company wide competition to give the ESS package its own brand name, which is now referred to as iPay. It uses colours that are a part of its corporate image, with a different screen colour for every day of the week. The employee directory has photos of all staff alongside their name and position in the organisational structure.
At Pearson, staff are referred to as “people”, not “employees”. Sheehan says that this is just one example of how language in the package was changed to reflect the organisation’s culture. “We changed the way instructions were written, used our own home page and included an introduction from our CEO as part of the customisation,” she says. Pearson also replaced an existing performance appraisal (Microsoft Word) document with one that looked the same but was actually part of the HRIS. Performance appraisals now go through an automatic authorisation process and are stored electronically, after an individual and his/her manager have keyed them into the system.
Implementation
Investec relied fairly heavily on the vendor during the implementation phase of iPay. Angelica Stein, Investec’s business systems manager says that they first tested the ESS module then requested some changes. “Once those changes were effected, we ran a workshop with users and then went live,” she says. As all of the users are computer literate and they all have to use it, it was well received and experienced high usage.
Sheehan says that the key to Pearson’s successful implementation was to put in place a user test group of eight influential people. “Their honest feedback gave us an insight into what people would be impressed by and what would frustrate and concern them. This then told us how to pitch the training program and rollout,” she says. The company’s five HR and payroll staff took two weeks to roll the training out across Australia in November 2005.
Return on investment
Sheehan says it is hard to measure the benefits of the HRIS, but it is easy to see the positive impact. “It is not an overly large financial outlay, when you consider the benefits that accrue when HR starts to be proactive.” Pearson’s HR and payroll team has gone from 50 enquiries a day down to an average of just two. Sheehan is now working on extracting meaningful reports from the HRIS (turnover, OH&S, leave without pay, sick leave, training costs) to help with people management.
Rubin says he wouldn’t know what metrics to use to measure ROI on the ESS system, because it replaced nothing. Investec employs just two people in HR and payroll. “If we had not gone to a fully automated ESS system during rapid growth, we would have had to employ more staff in HR and payroll,” says Rubin.
The voice of experience
Rubin believes that all companies should seriously consider using ESS if their staff are computer literate. “It makes life so much easier for HR and payroll. You should have all or nothing on ESS,” he says.
Sheehan is a member of Pearson’s board and stresses the importance of gaining board support before investing in an HRIS (see box). “The key to the success of our launch was having a test group of managers and staff who gave honest feedback about what delighted and concerned them. Not only did it help us write a training program, but that group turned into champions of the package after rollout,” she says.
Given the benefit of hindsight, Sheehan would have put an ESS system in place first and later rolled out the customised aspects of the HRIS, once she had seen how the software worked live and assessed the responsiveness of the supplier.
“We also should have involved IS when we were scoping the requirements, rather than further along through the process. This would have helped us with technical communication with the supplier,”concludes Sheehan.
