Teams before technology

It may not be on the scale of the £16m, seven-year HR and payroll outsourcing contract that Boots signed last month, but London Borough of Hillingdon has put its money where its mouth is with HR technology. It has invested £1.6m in a web-based HR software system called ResourceLink, from software provider Northgate Information Systems - the same system being implemented on behalf of Boots.

When the implementation is  completed in October 2006, ResourceLink will automate personnel, payroll, training, recruitment and expenses management for Hillingdon's 15,000 employees. It will also provide for the printing and distribution of up to 220,000 payslips each year. Self-service functions, meanwhile, will enable staff to record sickness or request holiday time online.

For the HR team behind the technology, getting to that point will create plenty of challenges - not just around the nuts and bolts of the system, but in preparing council staff for the changes that will accompany the project.

"This is not just a major IT project; it's a major change management programme," says Roger Hackett, head of personnel at the London Borough of Hillingdon.

For this reason, Hackett investigated Northgate's track record in change management with other clients just as thoroughly as he looked into its technology expertise.

Process overhaul

The reason this is so critical is that implementing HR technology frequently means a total rethink of current business processes. This was certainly the case for Peter Brand, regional manager for HR shared services at oil giant Chevron, which has just come through a major HR technology implementation.

In April 2006, Chevron 'went live' on a new, outsourced HR and payroll service EurHReka, provided by HR services company Arinso. The implementation project took 10 months and, according to Brand, "there wasn't a single business process relating to payroll that didn't change as a result".

But, he says, those changes were welcome.

"There's no point in putting in place a new system, with all the time and expense that would involve, without a good guarantee that you'll get a demonstrable pay-off. Why would you bother if it's not going to help you save money or perform tasks more efficiently?" he adds.

Re-engineering business processes, as Brand points out, is often one of the greatest drivers - but also the greatest challenges - involved in new HR software implementations. Every process, from how payroll staff enter data to how employees file their expenses, has to be redesigned.

These developments may not be enthusiastically received by all. "No matter how hard you try, people will always react differently to change. It's really important to spend extra time with the people that prove most resistant to it," says Hackett.

As a result, another stumbling block in HR implementations is communicating the reasons for the change to the organisation as a whole and training the end-users who will use the new technology on a day-to-day basis.

For example, if an organisation is introducing self-service, training must be high on the agenda, according to Steve Foster, HR business strategy manager at Northgate.

"Users expect self-service to be as straightforward and intuitive as using a cash machine. But even cash machines posed a challenge to some users when they were first introduced, and the same is true of HR self-service functions," he says.

At Chevron, training in self-service is backed up with supplementary material, including online guides and laminated cards to guide employees through the process of booking a holiday or changing their home address, explains Brand. Employees can refer to these if they run into problems and, in most cases,  they find them useful as memory aids in the weeks following formal training.

While the rest of the organisation prepares and trains for the transition, the IT and HR teams need to work closely together on these and other aspects of the project, says Charles Candy, new business sales consultant at Snowdrop Systems.

"IT has a huge role to play because its input on architectural issues and how the system will scale is invaluable. But HR must take the lead on business process re-engineering because it knows how various tasks should be performed to keep costs down, to remain compliant and to get results," says Candy.

"The two teams may not be used to working together in this way, but it is important to at least have a project manager that can liaise between the two, bringing them together."

But even if users support the project, and HR and IT are working together harmoniously, there will still be issues to deal with.

Getting existing data out of old systems and into the new one, for example, requires a major clean-up operation. And while IT can do much to speed up that process, the HR team will have to verify data and amend or delete it where appropriate, because only they understand its context.

That can be extremely time-consuming,  but it can have a significant impact on whether the new system will be a success.

Rule of thumb

Nick Record, business consulting director at Arinso, says: "Many older HR systems contain data that is inaccurate, out of date, or duplicated. A general rule of thumb is that if you put rubbish into a new system, you get rubbish out and people quickly lose confidence in it."

Fortunately, some systems offer tools that automate the migration process and flag up any data discrepancies to the project team.

With all this upheaval, it is not surprising that so many organisations consider outsourcing their HR software needs, as Boots has done. But do not be fooled into believing this is the easy way out.

"If you have a problem and decide to outsource it without investigating its cause or possible remedies, then the outsourcer will simply be selling you back the problem on a monthly basis at a premium price," explains Foster.

Whether in-house or outsourced, implementing HR systems will never be an easy ride. Making people - not technology - the priority during the change, however, could stop it becoming a troublesome and time-consuming transition.  <FFFC>

Tips for implementing HR systems

• Ensure you involve the right people at the start of the project and, where possible, allocate dedicated resources. If a project is being 'fitted in' around normal day-to-day activities, it is difficult to maintain focus on it.
• At the start of the project, identify what the key deliverables are for the first phase of the implementation and focus on getting those right. Any subsequent phases of the implementation will be much easier to manage if the basics have been well thought out and are working correctly.
• Have a clear understanding of your current business practices and areas where you feel improvement could be made. Discuss these with your chosen supplier - they will know how other organisations work and will be able to offer suggestions based on other users' experiences.
• If you have discussed any bespoke enhancements to the product, take time to ensure all your requirements are covered in the initial specification. Also ensure you are aware of how these changes are affected by future upgrades.
• Review reporting requirements and ensure they are all covered before the final sign-off, as this is often the area where you get the biggest return on the investment.
• Be realistic about timescales.
• Make sure you communicate with all interested parties and ensure they are aware of the scope of the project and how it may affect them.
• Ensure the supplier has an ongoing development plan for the solution you have selected and an opportunity for you to feed into the plan.
• Consider using a conference room run-through early on in the project (with representation from all departments and levels), to ensure you are going in the right direction.

Source: Janet Paxton, human capital management product manager at software supplier CedarOpenAccounts

The challenges of installing HR software