The Ultimate HRMS Selection Checklist
Looking for a new HRMS? Whether you’re a first-time buyer or an experienced HRMS user looking for a revamp that can cope with new requirements, this single HRMS selection checklist should keep you on track to finding the right system for your business.
Establish Specific Requirements
- What are your business goals for the next 5 years?
- What do you need your HR function to do to support those goals?
- What software features and capabilities do you a) need? b) want? c) think you have absolutely no use for?
- How will you demonstrate the return on your investment – what indicators, measures and metrics will you use? (Ensure their relevance to your overall business goals)
Identify Your Stakeholders for HRMS Selection
- Map your stakeholders according to how great an influence and how great an interest they have in your new HRMS
- Select key stakeholders to be part of the HRMS selection team who will decide on the new system
Draw up a Vendor Shortlist
- Create a request for proposal (RFP) with a detailed summary of your HRMS functionality requirements and send it to vendors and resellers inviting them to pitch their product(s).
- Ask trusted contacts for any vendor or system recommendations
- Read analyst reports, reviews and articles with objective advice and comparisons of the latest systems and features to identify vendors to invite to pitch.
- Another option is to outsource the process to an HRMS consultant.
Software Demos and Making a Choice
- Ask about data security provisions and disaster recovery arrangements – especially if the system is in the cloud with your data being stored in some distant data center
- Can the provider show you SSAE 16 audit certification or similar that will reassure you about their internal systems and controls?
- How quickly can the system be implemented once HRMS selection is complete– expect cloud systems to be faster due the lack of on-site hardware issues
- Cost – is the system licensed or pay as you go? What about maintenance and updating costs? Are there additional costs for support or upgrades? Consider the total cost of ownership (TCO) including the following, often hidden, costs:
- System installation - one-off acquisition and implementation
- System upgrade - periodic costs related to upgrading to a more current version
- Direct labor costs - labor costs for the staff necessary to support the system
- Outsourcing costs – costs deriving from any outsourced services
- Direct non-labor costs – including consultants, vendor fees and facilities, and any related corporate overheads
- System maintenance costs - IT costs specifically related to maintaining the system
- Indirect labor costs - labor costs for employees involved in ‘HR activity’ (e.g., collection of staff data, timesheet approvals, answering staff questions, etc.)
- For software demos, incorporate the features you’re looking for into a common demo script and ask each vendor to follow it
- Ask about the vendor’s business to ensure their stability, including: How long have they been in business? How many clients do they have? Are they HR(MS) specialists? What references or testimonials can be provided?
Making the Decision
- Consider the price but remember that although it is important it shouldn’t be the overriding factor – being fit for purpose is more important
- Follow up references and testimonials – ask: How smooth was the implementation process? How did the vendor respond when problems arose? What compromises, if any, were made? How did they measure the return on their investment and did they get that return?
- Check the contract – that it includes everything you have negotiated
- Check for ‘hidden extras’ – including service agreements and other items that are part of the TCO
- While in the process of nailing down the contract, it is worth contemplating what you might require from your new HRMS in a few years’ time. E.G. self-service functionality, legislative compliance…; will the vendor be able to provide these future requirements?
- Test the water with the key stakeholders that you’ve involved in the selection process so far
- Have the contract checked by a lawyer – better safe than sorry
An HRMS selection process is not complete without each of these steps, so make sure to have our HRMS selection checklist close at hand when you are choosing the best HRMS for your business.
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