Satish M. Badgi

Practical Guide to

INFORMATION SYSTEMSHUMAN RESOURCE

PHI LearningNew Delhi-110001

2012

Practical Guide to Human Resource

Information Systems

Satish M. BadgiA Global HRIS Consultant

New Jersey (USA)

` 275.00

Practical Guide to Human resource information systems Satish M. Badgi

© 2012 by PHI Learning Private Limited, New Delhi. All rights reserved. No part of this book may be reproduced in any form, by mimeograph or any other means, without permission in writing from the publisher.

note: All company and product names used in the book may be trademarks or registered trademarks of their respective owners. This publication has no affiliation with or is endorsed by any of the ERP or software product company names mentioned in the book. Although the author and publisher have made every effort to ensure that the information in this book was correct at press time, the author and publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause. The examples and case studies are fictitious. The class solutions and examples in the case study are purely for learning purposes and should not be taken as affiliation or endorsement for any product or company. The views expressed in this book are those of the author and should not be attributed to his current position or organisation that he is associated with.

isBn-978-81-203-4529-4

The export rights of this book are vested solely with the publisher.

Published by Asoke K. Ghosh, PHI Learning Private Limited, M-97, Connaught Circus, New Delhi-110001 and Printed by Raj Press, New Delhi-110012.

Contents iii

iii

Contents

Preface ................................................................................................................ix

1. Introduction and Concepts .......................................................1–32 Prior to Reading this Book 1 1.1 Evolution of HRMS 2 1.2 Employee Life Cycle 6 1.3 Internal and External World 16 1.4 HRIS System Life Cycle 18 1.5 Team Structure 20 1.6 HR’s Role 22 1.7 IT’s Role 23 1.8 Challenges of HR and IT 24 1.9 Platform Choice 26 1.9.1 Technology Topics 26 1.9.2 Custom Development, ERP, Best of Breed 27 1.10 Why do Some of the HRIS Implementations Fail 29 1.11 Structure of this Book 30 1.12 What have We Learnt So Far 31 Questions and Exercises 32 References 32

2. Strategy and Planning ............................................................33–66 2.1 Overview 33 2.2 Case Study 36 2.3 HR Goals and Objectives 37

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2.4 As Is 40 2.4.1 Discussions with HR and IT 40 2.4.2 Documentation for Existing Systems 42 2.5 To Be 44 2.6 Projects, Priorities, Risks and Opportunities 47 2.7 Benefits-QualitativeandQuantitative 51 2.8 Investments and ROI 53 2.9 Global vs. Local Discussion 54 2.10 HR Technology 57 2.11 Planning for Implementation 58 2.12 Critical Factors for Strategy and Planning 63 2.13 What have We Learnt So Far 64 Questions and Exercises 65 References 65

3. Applications and Modules ....................................................67–122 3.1 Overview 67 3.2 Organization Design and Management 72 3.2.1 Integration 74 3.2.2 Prerequisites for Implementing OM/OD 76 3.2.3 Practical Aspects and Tips 76 3.3 Recruitment 77 3.3.1 Integration 79 3.3.2 Practical Aspects and Tips 79 3.4 Employee Administration and Data 80 3.4.1 Integration 81 3.4.2 Practical Aspects and Tips 84 3.5 Payroll 85 3.5.1 Integration 88 3.5.2 Practical Aspects and Tips 90 3.5.3 Off-CyclePayrolls 92 3.6 Leave, Absence and Time Management 94 3.6.1 Integration 95 3.6.2 Practical Aspects and Tips 97 3.7 Benefits 98 3.7.1 Integration 99 3.7.2 Practical Aspects and Tips 101 3.8 Global Employee Management 102 3.8.1 Integration 103 3.8.2 Practical Aspects and Tips 104 3.9 HR Administration 105 3.9.1 Budgeting 105 3.9.2 Approvals 106 3.9.3 Case Management 107

Contents v

3.10 Travel Expenses 107 3.10.1 Integration 108 3.10.2 Practical Aspects and Tips 109 3.11 Portal 109 3.12 Training and Learning 110 3.12.1 Integration 111 3.12.2 Practical Aspects and Tips 112 3.13 Retirement and Pension 113 3.14 Talent Management 113 3.14.1 Succession Planning 113 3.14.2 Skills and Competency Management 114 3.14.3 Performance Management 115 3.14.4 Compensation 115 3.15 Garnishment 116 3.15.1 Integration 116 3.15.2 Practical Aspects and Tips 117 3.16 Reporting 118 3.17 Integration and Interfacing 120 3.18 What have We Learnt So Far 120 Questions and Exercises 121 References 122

4. Implementation ....................................................................123–166 4.1 HRIS Implementation Life Cycle 123 4.2 Systems Integration 127 4.2.1 Internal Systems Integration 127 4.2.2 External Systems Integration 131 4.3 Analysis 133 4.3.1 Deliverables 140 4.4 Design 140 4.4.1 Deliverables 143 4.5 Build 145 4.5.1 Deliverables 146 4.6 Test 146 4.6.1 Unit Testing 147 4.6.2 Integration Testing 148 4.6.3 Performance Testing 148 4.6.4 Parallel Testing 149 4.6.5 Regression Testing 150 4.6.6 User Acceptance Testing 150 4.6.7 Impact of HR and Payroll Events 151 4.7 Deploy 152 4.7.1 Data Conversion 153 4.7.2 Training and Change Management 154 4.7.3 Interfaces 156

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4.8 Project Management and Governance 157 4.8.1 Project Planning 158 4.8.2 Running and Monitoring the Project 158 4.8.3 Risks and Issue Management 159 4.8.4 Resource Management 160 4.8.5 Sign off on Deliverables 161 4.8.6 Unique Challenges of HRIS Implementation Project Management 161 4.9 Timelines 162 4.10 Contingency Plans 164 4.11 What have We Learnt So Far? 165 Questions and Exercises 165 References 166

5. HR Data and Security ..........................................................167–195 5.1 TheoryaboutDataandDefinitions 167 5.2 Managing HR Data 169 5.2.1 Data Discipline for HRIS Implementations 174 5.2.2 ImpactofDefinitionsonHRBusinessProcesses 176 5.2.3 Trial Data Conversions 177 5.3 Data Discussion by HRIS Modules 177 5.3.1 Organization Management /Organization Structures 177 5.3.2 HR Master Data and Personnel Administration 179 5.3.3 Payroll 180 5.3.4 Time Management 181 5.3.5 Learning and Training 181 5.3.6 Garnishments 182 5.3.7 Benefits 183 5.4 Historical Data Topic for HRIS Systems 183 5.4.1 Options for Historical Data 184 5.5 Typical Standards Followed in HRIS Data Conversion 184 5.5.1 Retroactive Data 185 5.5.2 Date Dependency 185 5.5.3 Go-LiveDate 186 5.5.4 Referential Integrity and Data Dependency 186 5.6 Security and Access to Data 187 5.7 Data Transmission 190 5.8 Common HR Data Challenges 190 5.9 Historical Data and Data Archival 191 5.10 Tools Available in Market 193 5.11 Data Teams 193 5.12 What have We Learnt So Far? 194 Questions and Exercises 195 References 195

Contents vii

6. Outsourcing and HR Shared Services ..............................196–218 6.1 Overview 196 6.2 Evaluation 199 6.3 HR Transactions 207 6.4 Payroll 208 6.5 Benefits 209 6.6 Recruitment 211 6.7 Tax Processing 211 6.8 Garnishments 212 6.9 Integration 213 6.10 HR Shared Services 214 6.11 In-sourcing 216 6.12 What have We Learnt So Far? 216 Questions and Exercises 217 References 218

7. HR Operations .....................................................................219–240 7.1 PostGo-liveandafterCompletingHRISImplementation 219 7.2 Run Time and Maintenance 220 7.3 System Changes 222 7.4 Employee Help Desk 223 7.5 Managing Changes to Business 227 7.6 Managing Changes to Systems 228 7.7 Reporting and Analytics 229 7.8 Measuring Operations and Success 233 7.9 Is Our HRIS Implementation Successful? 236 7.10 Wrap up 238 Questions and Exercises 239 References 240

Appendix: Glossary of Terms ..................................................241–245

Index ...........................................................................................247–249

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Contents ix

ix

Preface

“HR is different”—that is what I consistently heard while implementing HR and Payrollsystemsoverthelasttwodecades.Initially,Isaid,“Yeah,thatiswhatfinanceusers say and that is what supply chain users say too. Is HR really different or just thatHRusersaredifficulttomanage?”AsIwentthroughmoreandmoreHRandPayroll implementations and touched many different HRIS applications, I realized the depth of that statement. To begin with, there are very few IT applications that touch the life of people (employees) as HR applications do. When organizations deployapplicationssuchasEmployeeSelfService,BenefitsEnrollmentorTimeClocking, they know that those applications are likely to impact thousands of employees. In today’s global business environment, HR applications do take a globalflavourwithcomplexitiesaroundmultiplecountries,different languages,cultural differences as well as government regulations. HRIS deployment, therefore, becomes quite challenging for both HR and IT team members. In addition, when such applications touch the life of people, it poses a unique challenge of change and transition. It may not be always easy to change a system or a business process because it invariably involves people, their languages, their culture, their unions, their regulations and above all privacy of their data. HRIS is about people and about paying them accurately and on time. HRIS (Human Resource Information Systems) is about data of people who have real concerns about that data. And that is what makes HRIS more special and unique compared to many other IT systems. I slowly started to understand the differentiation of HRIS applications and the unique nature of these implementations. Overthelastfewyears,IpublishedmywritingonspecificERPorientedHRand Payroll topics. I then realized that perhaps readers can use a comprehensive HRIS life cycle oriented discussion which can span from planning to execution of HRIS applications. As a result, I started thinking about this book which can give a big picture for HRIS implementations. HRIS implementations have two sides to it—HR and IT. They both need to play an equal role in implementation or development of HRIS applications. While HR users play a key role in analysis,

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design, business process change, training, standardization, and so forth, IT continues to play its role in developing systems, building technology, improving performance, converting data as well as undertaking overall systems integration. This book will attempt to explain the world of HR and IT to each other as it discusses the topics on both sides. It is not about one being stronger than the other, but how they both can collaborate for successful HRIS projects. The underlying theme, of course, is to answer the question, “Why are HR implementations different?” The overall discussion uses different HRIS applications and modules as backdrop. This book starts with an employee life cycle, discusses the importance of HRIT planning and strategy and then dives into implementation and execution. In addition, I could not have left behind the peripheral topics of outsourcing, global HR, integration with external systems and data security. These topics play a key role in today’s HR technology world and can create new challenges that we had not seen in the past decades. As I have seen that the world of HRIS is somewhat divided between those implementing “all in one” ERP applications and those who are going with “best of breed” approach. The discussion in this book will be useful and applicable to both these streams. This book is not about HRISmethodology,neitheritisaboutHRconcepts.Itrathertriestofillthegapsthat HRIS users seem to face with HRIS applications or documentation or plain HR conceptual literature. I must admit that I come from years of deep SAP HR background, but I have tried to take a product-independent approach in this book. HRIS world has very similar challenges irrespective of SAP, Oracle or PeopleSoft product separation. For example, topics such as data, systems integration, outsourcing and HR transformations, they all cross the product boundaries and are common in HRIS world. The examples, the case study and discussions in the book follow an international approach. In today’s global world and increasingly global HRIS implementations, we are better off using internationalexamplesandfindingoutaboutchallengesinsuchglobalprojectsrather than discussing single country HRIS implementations. I think, the book should help you whether you are a student aspiring to be an HRIS professional or an IT or HR professional wanting to learn more about this topic. In some discussions, I am assuming prerequisite knowledge in HR and IT areas. However, if you are new to the topic, the references listed at the end of each chapter should help you refer to appropriate topics beyond this book. My sincere appreciation and thanks to PHI Learning for the opportunity and encouragement to write this book. Special thanks to Mr. Darshan Kumar and the team at PHI Learning for their help. Thanks to Nanda and Shivani for their support. As always—thanks to my customers and my colleagues across the world who continue to enrich my knowledge and skills. I have my readers’ good advice and I have also tried to follow it—Keep it simple, give us plenty of real life examples, and pictures are always good. I am hopeful that readers will like this book. Your feedback is valuable and you can write to me at saphrwriter@yahoo.com. Thank You!

Satish M. Badgi

x Preface

Introduction and Concepts 1

1

Introduction and Concepts

Prior to reading this BookThere could be many new concepts and terminologies for you to learn in this book. These concepts are from both HR and IT disciplines. Here is a list of sample questions which may give you some idea about the new concepts. If you are unable to answer these questions, try finding their answers by doing some

Learning Objectives

This chapter will help the readers in developing a conceptual understanding and in getting an overview of the HRIS function. The overview will be detailed in subsequent chapters of the book. We will be going through examples of some of the HR business processes in this chapter to start our discussions on HRIS functionality. As the title suggests, this book is about HR and IT. Therefore, this introductory chapter discusses the concepts in both the areas of HR and IT. In addition, Software Project Management concepts and some additional new concepts from modern day ERP/HRIT products are also part of our discussion. For many of you, these concepts could be completely new and therefore the references listed at the end of this chapter, as well as those at the end of subsequent chapters, will help you learn more about the topics.The main learning objectives for this chapter are:

y Establish a background to the overall function of HRIS y Learn how an employee goes through a life cycle in an organization y Learn the HRIS project life cycle with different teams and team structures involved

y Learn the dynamics of HRIS world—how the internal environment and the world external to an organization affect its HRIS systems

y Discuss the broad challenges of HR and IT to work together in today’s business world

y List the overall reasons for failures of HRIS systems

1

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