Top most factor: The Budget

The first decision factor that usually pops up is the budget and rightly so. Most organizations shop for solutions within their budget. These solutions can range from in-house solutions to complete outsourcing.

What usually gets missed out while reviewing the costs of these products is the TCO or the Total Cost of Ownership. The total cost of ownership should include,
* Cost of acquiring the solution
* Cost of maintaining the solution
* Cost of operations
* Cost of additional process steps / solutions required to complete the process scope
* Cost of infrastructure required to support the solution
* Cost of training the users on the new solution
* Any third party costs

From this perspective it makes sense to view the total cost of the end to end HR process, rather than focusing on the solution that you are considering. Looking at the end to end process will give a better estimate of all the costs involved.

Vendor prices might promise "value added services" which sound good. But remember that you will get the value only when you use that particular feature or facility. So again have a clear picture of the end to end process to determine which product / solution covers most of your needs and how much more you will have to do to complete the process. Ask questions and ask for data sheets, system architecture, support options and all that you need to get a clear picture.

This information can be derived very easily and most of the vendors who are showcasing their solutions to you will be willing to do this analysis for you at a low cost or even for free. However if you want an unbiased view, you can engage a consultant (like Optimus Prime HR) to pull this together for you.

The two major types of products

A closer look at the various HRMS products available today reveals two major types of products. The first category of products use the Least Common Multiple approach and provide the basic standard features. They also is most cases make available user defined fields and highly flexible architecture that makes it possible for clients to build the features they desire on top of the basic product.
The other category of products provide a comprehensive product which can be configured to provide only the desired functionality. Peoplesoft HRMS is a good example of this.

Both the above approaches have their advantages and disadvantages for users. The first category is usually available at a lower price. The basic functionality can be rolled out at very less time. But the basic functionality will have less features and the customer will have to invest effort into building the features the organization needs. This gives rise to more effort in maintaining the installation and upgrading it at a later point.

The second category requires much lesser customizations and since the entire package is being maintained by the vendor, customer can afford to have a smaller team for maintenance (as long as the customer has stayed away from customizations). But then customer usually pays for the entire pacakge, the features that they use plus the features that are available anyway. Also, any tweaking of the package becomes complex as the package is already fully loaded.

It helps to review a product from this perspective.

Septemaber 2009 edition of HRO Today magazine has a comprehensive review of all the major HRMS products available.

Navigating through Technology options for your Business Architecture - Intro

It is mind boggling to see the number of options out there today for HR Systems (and for that matter technologies for any business process). First of all, there are choices between SaaS (Software as a Service), Utility based outsourcing and the on-premise models; and then there are niche products, end to end HR systems, web based ones, self service portals - the list goes on.

Through these blogs I will try to simplify the process of selecting the right system for your business.

Choosing the right technology for your business depends on a number of factors:

1. Who will be the users of the technology?

2. How will they be using it?

3. Where do they need to access the technology from?

4. Who has approvals and decision making controls in the process?

5. The culture of your organization

6. How often do org structure and process steps change?

7. What are the data sources for the business process?

This blog will take a closer look at some of these factors and explain how they impact your technology decision.

CompareHRIS.com (http://www.comparehris.com), one of the latest and smart websites offering services in HR IS systems, has taken one of the most practical approaches towards helping customers choose the right HR system. Not only do they have descriptions and demos of 20+ products, they also guide the customer through a 10-min interview that determines the natire of the company and the requirements of the HR system. There is no one size fits all. Different technologies will be appropriate for organizations at different points in time.

Through this blog, let us look at some such factors and what they truly mean to your business and technology.