To Err is Human

Software solutions for the Human Resources(HR) and payroll divisions of a company are tough to implement. They sputter and stall for irritating reasons: more customisation is required than thought; historic data won't convert properly. This list drags on . . . Recently, Harvard Business School professor Andrew McAfee wrote an article in the Winter 2003 (US) issue of Sloan Management Review on the nagging dissatisfaction companies have with the failure of big software systems' implementations. "The fundamental issue," he says, "is that managers usually follow what amounts to a universal checklist, one that is supposed to be appropriate for all situations, when they implement a new process-enabling technology." But, he argues, these checklists aren't appropriate for every system. Each one is different and therefore requires a differentiated approach to its implementation.

Software solutions for HR and payroll hold out the same strategic promise as any business process software solution - wrenching efficiencies out of the workflows, standardising best practices across an enterprise, freeing time for staff to do more strategic work. And like enterprise resource planning (ERP), supply chain management (SCM) or customer relationship management (CRM) systems, the barrier to achieving these goals lies in the implementation. HR management systems (HRMS), which almost always tie into payroll and accounting, have their own peculiar challenges and pitfalls.

Vendors won't be forthcoming about these inevitable problems. Your staff might not have the experience to look out for them. But by knowing why these innocuous problems crop up during the implementations, executives can guide the organisation to the right solution - and a realistic implementation plan.

The Pressure on Vendors

The price sensitivity in the software market has made HRMS and payroll vendors leery of giving thorough estimates on implementation costs. Every organisation has certain highly specific HR requirements. And every vendor has certain embedded, template-driven HR processes that will differ from a company's established practice. Therefore customisation during the implementation phase is almost always necessary. But it's up to the client to negotiate these differences. The ability to anticipate problems and bend where needed will smooth the implementation process for HRMS significantly.

With HR and payroll systems implementations, the most serious problem is what McAfee defines as the creation of a "system [that] works in a technical sense but does not improve the execution of business processes", or what he calls misspecification. Not knowing the full dimension of business requirements is most often the cause for delays and disappointment with HR and payroll systems.

The set of HR/payroll policies and procedures to be automated are actually in a constant state of flux. Changes in social norms as well as government policy affect everything from training, development, performance reviews, taxation and security, recruiting and retention. And these impact a company's strategy.

Also, the workflows behind these policies overlap many functions and roles. How and when do managers conduct performance reviews? What employee self-service features should we include? How do HR and payroll departments collaborate? These are all questions that HR can answer, but as Mary Livingston, vice president of human resources for Massachusetts-based RETEC Group, explains, the answers may not be the best ones.

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