Tips to Evaluating and Selecting a Payroll/HR System
Selecting a new payroll/HR system might be something you do every three to five years, if not longer. Institutional memory fades. Maybe the person who led the selection process last time is no longer with your company. In any event, it’s something you don’t do often. So it requires you to prepare, take your time and consider what your business will need in the next several years.
The technology world is changing rapidly and new solutions are probably now available that you never considered last time. And future practices in the not too distant future might be something you aren’t even considering (like using a smartphone for timekeeping, pay advices, vacation scheduling, etc.).
There are a lot of factors to consider but here are some of the key ones. COST and CAPABILITIES are obvious ones. What does the system do? How much will it cost? Often we are tempted to end here. But this is shortsighted. USER EXPERIENCE is a key factor. How does the system look, feel and function for real users – employees, managers and system administrators. The ABILITY TO CUSTOMIZE is a new consideration that should be everyone’s list. In the old days, you had little hope of customizing anything. Now systems are flexible and more easily modified to your specifications. So if you take your time thinking about what you want and how to get it the way you want it, chances are you may be able to.
Now onto other IT things. DATA INTEGRATION. Can the new system talk to other systems? How easy is the data transferred between systems? In today’s world with files transfers, exports/imports and Electronic Data Interchange, there are more ways than ever to pass data between systems and this should be an expectation. What about the internal IT people in your company? What impact will this have on them and will they need to agree? If you choose from many of the Software-as-a-Service vendors, your internal IT will have very little need to be involved or stay involved. Which now means you will be getting IT SERVICE from the new vendor’s staff. So be sure to evaluate their service capabilities. They should offer a Service Level Agreement that clearly spells this out. And references from current users should also enlighten you regarding service.
So evaluating, comparing and selecting a new system is not an easy proposition. Especially if you don’t do it often and the options change year to year. Planning and patience are critical. Be thorough. Create a project plan and involve key people as a review committee. You control the process and vendors answer to your requests. By all means, don’t be sold a system without first considering what you want and need then “interviewing many candidates.” Just like hiring personnel, clearly defining what you want upfront and being patient with the selection process will afford you the payoff of making a good long term decision.