ERP Systems and HRIS Done Right

April 1st, 2008 by hragitator | Posted in HRIS |

I have seen a troubling development, not recent but definitely increasing in nature, in the way companies use the HRIS module, or any other module for that matter, of their ERP system. The problem, as I see it, is that businesses purchase an ERP system for the most obvious reason (to have one system that brings multiple solutions together seamlessly), but then immediately devalues that system by farming out certain processes to other software companies when the ERP system doesn’t perfectly meet their needs.

For those of you who are unfamiliar, go to Wikipedia for a detailed discussion on the advantages and disadvantages of Enterprise Resource Planning (ERP) and Human Resources Information Systems (HRIS).

To be clear, I am neither a technical person by background or an expert in any information system. However, I do understand the fundamental fallacy in the logic here. Why would you purchase an all-in-one software package and then immediately begin to allow other software packages in the door when the all-in-one doesn’t meet your needs?

The answer is simple, because individually all those decisions make sense. The story goes like this: you decide you need an integrated solution, you research vendors, you have steering meetings, you collect feedback, and then you finally make the big decision knowing that it is one you’ll be stuck with for a long time. Now, you made this well thought out, extremely expensive decision with a lot of effort, so you want to protect your investment. So, of course, you mandate that if the ERP you purchased has a needed solution available, your company should be forced to use it.

Unfortunately, this policy doesn’t hold up long. Most ERP systems are destined to fail because there is a chain of reactions that almost inevitably takes place. It goes as follows:

1. Company pays too much for software.
2. Company realizes it paid too much and now regrets paying too much.
3. To compensate, company tightens the implementation budget.
4. Implementation is poor due to lack of resources.
5. ERP system doesn’t function proper and quickly becomes despised by employees.
6. Employees are assigned to work on projects which require software solutions.
7. Employees remember terrible ERP system experiences.
8. Employees push to be allowed to purchase software other than ERP to meet their needs.
9. Company relents but says new software should “interface” with ERP.
10. New software “interfaces” but very poorly.
11. Both ERP and new software suffer from poor integration.
12. ERP loses further employee support because new software users blame ERP for all their troubles.
13. Rinse and repeat.

As you can see, this continues ad nauseum until your ERP system completely fails at reaching its original intention. Here’s the key: when you purchase an ERP system, you should treat it like a marriage. Not like the crappy marriage your parents had, but a really good one like on The Cosby Show.

If you don’t like one aspect of life with your spouse, you shouldn’t go have an affair. Instead, you should work really hard to find a way to adapt the marriage to meet both your needs. Its the same with ERP systems. If you don’t like one thing it does, don’t give up. Instead, invest the appropriate resources to make it work correctly. Otherwise, don’t by an ERP system at all!

Because this is a site with an HR focus, I want to make this relevant for the HR readers. If you have an HR module in your ERP, and it has performance management, talent management, recruiting, compensation, and so forth available, you should be willing to use what the system provides or be willing to commit the resources to altering it to your specifications.

If your HRIS system looks like the octopus above (hey, I know most HR folks are visual learners), with the ERP in the middle and eight different software packages that are supposed to link with your HR module, you’ve done something terribly, terribly wrong.

In short, don’t let small individual choices that make sense develop into a very large negative effect on your business.