Can you calculate the useful life of your HRMS?

There is a vast number of HR technology systems on the market with different combinations of functionalities and deployments. Furthermore, the usefulness of each system is impacted by a variety of external, non-technological factors.

Given all this, there is no simple formula to establish a reliable predicted life span for your HRMS. However, bearing in mind your own particular circumstances, it is worth considering how long your HR software might last; for your own planning purposes if nothing else.

Put simply: like any other business asset, your HRMS won’t last forever but an awareness of the various factors that affect that life span will help you maximize its useful life. These include:

1. Data

On a basic level, as long as the system keeps the data you want it keep (and keeps it securely) then it’s a viable system. However, as your business changes, or your compliance requirements, sooner or later you’ll want to record additional data - and any system is only customizable to a point. Once your recordkeeping needs outstrip your system’s capabilities, it’s out of date.

Our step-by-step guide to calculating HRMS ROI will help you establish what new HR software can offer in the long term

2. Processes

This might be a case of either having developed new HR and people processes that your existing system cannot automate or carry out for you, or the system is wedded to using processes that no long fit your business needs. In a sense, these are just two sides of the same obsolete coin! This factor can be eased by doing some detailed forecasting as part of your original selection process: don’t just buy a system that does what you need, buy a system that also does whatever you might need in future.

3. Other business systems

In this era of Big Data, your HR system’s value is often increased or diminished according to how easily it will integrate and share data with your other business systems. As those systems evolve or are upgraded, your HRMS’ useful life span lessens.

4. People

Even if your business doesn’t change, your people and the world they live in will. Not so many years ago, employee and manager self-service functions were new and ‘nice-to-have’, now however, they are ubiquitous and practically mandatory. Similarly, mobile functionality used to be a luxury, but in these days of BYOD, people expect to access their data anytime and anywhere, and to be able to use their own smartphone to do so.

5. Vendor

Finally, even if the system itself is still going strong and steady, if the vendor been acquired by another company or, worse, gone out of business, then your system’s days are numbered without necessary support, maintenance and upgrades.

It used to be that ‘industry experts’ were agreed that the average lifespan of HR or payroll software was around the 5-year mark. Thanks to the twin impacts of a flood of cheaper cloud systems, and the precarious global economy driving businesses to squeeze extra life from all their assets, it’s hard to find an HRMS pundit willing to cite a figure – the variables are just too many.

Still, consider the above five ‘age factors’ in relation to your business, your people and your HRMS and you’ll have a sense of how soon you’ll need to upgrade or replace your current technology.