The success of any HR technology initiative heavily depends on employee adaption, so the simpler the technology is to deploy and to use, the better, says Sumeet Kapur, CEO, EmployWise

What should companies look for when selecting for HR technology products?

When selecting a technology option, it is critical to ensure that the technology is simple to deploy and to use. Companies should first recognize that their technology initiative will require a significant amount of process and data work within the HR team. Second, change management and user adoption issues will follow. You need to be able to get people to use and work with the system because ultimately, the success of any HR technology initiative heavily depends on employee adoption. Rather than functionality, focus on the ease of use of a solution. The easier it is to use, the more adoption you’ll have, the less training you’ll need and the faster you will be live. Assess the capability of the vendor, especially their willingness to assist you in making your initiative work. Generally, “buying” a technology also adds a whole bunch of additional issues on installing, running the solution, and maintaining it, so you would be better off with solutions delivered as a service.

What are the different models that exist in the market today? How do they suit different companies in terms of size, industries and budget?

You could essentially buy and deploy a system in-house i.e. "on-premise" or you could just subscribe to an online system. The latter model popularly referred to as the SaaS or Software-as-a-Service model, is rapidly becoming the most popular option. Practically all new systems are being developed as SaaS. This is because of its significant advantages to the user as it requires no upfront investments, no prior IT infrastructure, or skills an OPEX based recurring fee model and a much faster deployment. For smaller companies with budget constraints, the SaaS model offers a compelling advantage of not requiring large investments and IT skills. Traditionally, large companies that can afford, have the requisite in-house IT skills deployed on-premise solutions. However, globally, even large companies are opting for the SaaS options given the advantages of speed and better usability of these solutions. There is also a growing number of cases where companies with existing HRISs are opting for newer SaaS solutions for talent management. Industry vertical however, does not seem to matter in this selection.

What are the benefits of an HRMS system? Is there any other alternative today to manage employee cycle successfully?

The main benefits of an HRMS system is that it helps an HR department to be more efficient, productive, and informed. When you have everything in one system, instead of manually keeping track of spreadsheets, forms, etc., it becomes a time-consuming task – especially if you’re growing from a couple of employees to a hundred or more. Further, an HRMS system will give you the right insights to your employee data, so you can predict and make better decisions, and form your HR strategy more cohesively. The system will remind those involved in any process so that you don’t have to chase them. You can also retain and develop your talent better. For example, if you have a review process in place, and it’s automated, you’ll have all ratings, review feedback, scores, etc. in the system. On top of this, if an employee falls short, he/she should be automatically nominated for a training or prompted for coaching. At the same time, if you have a system of rewarding your top performers, the system will make sure that it happens. I don’t see any other way of managing the entire employee life-cycle successfully without an HRMS. Managing it manually with a patch work of solutions here and there is simply not efficient enough and leaves a lot of room for bottlenecks and human errors.

What makes an integration of HRMS successful? What are the challenges that companies face when introducing HRMS in their organizations?

One must appreciate that an HRMS is perhaps the only business application that reaches out to every employee of the organization. This poses a unique challenge to making such an initiative successful. I would rate "usability" as the number one determinant of success. Three things are critical to meet this challenge, the first is "usability" i.e. the quality of a system to appeal to its users intuitively and encourage them to adopt it without hesitation. It should be capable of becoming something that your employees actually enjoy and empower them. In other words, your employees adopt and evangelize the HR system not forced on them through a corporate diktat to use. Second, while most systems will have a lot of functionality, it is the ability to handle exceptions (which trust me will always be there) and the ability of a system to integrate and correlate different HR processes that matters the most in easing life of your HR team. Providing significant insights makes the user's experience powerful. Finally, it is "availability" of your system i.e. whether or not the system is available to employees anytime and anywhere they want to use it. A self-service HR portal that is hard to use will inspire as much confidence as an ATM machine that is out-of-cash most of the times you use it.

How does one measure the benefits and ROI of an investment in HR Technology?

Proving ROI has always been a huge challenge for HR trying to get corporate budget sanctions and show value for technology investments. The most common return that is shown is in the form of savings in administrative HR staff costs and maintaining a lower HR staff to employee headcount ratio. However, this leaves most of the true value out of the equation. A second measure of ROI comes from the savings in executive time spent creating and chasing employee requests and approvals and running HR processes like appraisals and trainings in a pen-and-paper model. The biggest value from implementing technology in HR comes from the significantly higher levels of employee engagement and talent retention that can come from a good HR system. Ultimately, one must recognize that scaling to a higher order of talent management is simply not possible without data, insights, and a tool to implement initiatives -- that is where technology can enable HR.
Interestingly, SaaS which requires zero CAPEX is often a great way to circumvent the whole ROI debate, especially if for whatever reason, HR cannot or doesn't want to get into the ROI debate!