Why are so many firms dissatisfied with their HR systems even though, superficially, the software meets their needs? Kirstie Ball explains the importance of a good fit between users and suppliers of technology
People Management, 06 Jan 2000
If you're thinking about buying a new human resource information system, you are at the beginning of a process that is likely to plumb the depths of your resources, creativity, processes and patience.
This year the IPD and the Institute for Employment Studies carried out a survey on computers in personnel, which found that systems suppliers were often not delivering on their promises.
Respondents cited a lack of strategic or operational functionality, insufficient integration with business systems, poor quality of reporting and difficulties accessing data. They found that the systems were complicated, inflexible, outdated and user-unfriendly. As a result, 36 per cent of them were looking for new systems and another 17 per cent said they were planning to do so in the next two years.
It seems that supplier-user relationships are failing, not only in terms of the technology but also in terms of users' expectations. So what makes a good supplier-user relationship? An obvious answer would be good, simple communication and training, but there is more to software suppliers than meets the eye.
Careful vendor selection is the key. Naturally, suppliers will offer to customise the product, help with your data load, provide comprehensive training and give maintenance throughout the implementation process - which is commonly fraught with nasty surprises. But you need to go beyond asking whether this is the right product to find out if it is the right type of organisation for you.
Culture clubs
According to studies by the Centre for Creativity, Strategy and Change at Warwick Business School, vendors' own HR practices and cultures, as well as their expectations of customers, are linked with the types of products they sell. HR systems suppliers are selling more than software; they are selling knowledge, intellectual capital and a philosophy that you, like it or not, are. So the key to success in choosing and implementing software systems is to understand the suppliers buying (see "Do you like your culture hard or soft?").
Find out about the history of your prospective supplier, its own HR practices and how it came to offer that particular range of products, because this will reflect on its specialist skills. Consider whether these skills match your needs. You may have to go beyond the salesperson to achieve this.
The difference between companies is not quite so obvious when it comes to the systems they supply, which tend to be closely aligned to the type of market in which the vendors perceive themselves to be. When asked about their customers, most suppliers claimed that they had nothing in common, or grouped them into industry or economic sectors, such as pharmaceutical companies or small firms.
Crucially, all but one supplier said that their product philosophy was directly aligned with their market position. For example, those aiming at low-end, first-time users emphasised the "cheap, easy, quick and flexible" aspects of their system, which would act as a basic central point for collecting data.
Flexibility was a key point for many other companies: 5, 7 (payroll providers) and 10 (non-payroll provider) stated that their software could "do whatever you wanted it to", and they claimed to sell to a generic HR market. But every respondent stated that they had on several occasions refused to supply a system because it simply wasn't right for the customer.
Implementation
Supply companies differed in their approach to implementation. The youngest companies had a fluid, customer-driven, informal and non-procedural approach, whereas all of the older companies had procedural and formal approaches - although those were flexible. For example, company 4, which had been supplying HR software for six years, noted: "We've never seen 50 per cent of our customers. We [just] supply a user guide that basically walks people through it."
At the opposite end of the spectrum company 11, which, at 30 years old, was one of the longest-established, said: "We achieved BS5750 (now ISO 9001) for all the procedures that the company followed. Included in that was the process of implementation."
Those suppliers that professed to have a generic product and a generic customer base were somewhere between these two, with customisable implementation encased in formal frameworks.
And training mirrored implementation style: the older payroll providers had extremely detailed, structured training programmes. The younger firms, aiming for specific market niches, tended to have a more superficial approach, opting for centralised, classroom-based training with users from different companies.
Healthy competition
It is also useful to know how your supplier fits into the market. Does it compete on price, maintenance deals and product features alone (market power), or does it build in special expertise and the intangible benefit of a strong brand and product image (a degree of individuality) into its service provision? While there is always some trade-off between these two approaches - and every organisation must have an element of both in its strategy - we can see how this can account for the split in suppliers.
The younger organisations that didn't supply payroll modules relied more heavily on their particular areas of expertise to provide core HR products, while the older ones competed on a large scale, using systems that were similar to those of their main, large competitors.
Alignment is becoming an important factor in buying a system. It must be right for you, but you must also be right for the system and be able to work with your supplier's values. Do you want the payroll muscle of the bigger, older suppliers, or the flexibility of the younger ones? The relationship with your supplier should be a long and happy one, but it must be a relationship that works both ways. It is vital that your supplier has the implementation and support expertise to match the HR strategies you choose (see "Getting IT sorted").
Kirstie Ball is a research fellow at the Centre for Creativity, Strategy and Change at Warwick Business School. The study was funded by the Economic and Social Research Council.
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