There are many medium sized businesses who have been running the same HR/Payroll system for years, and inevitably the question comes up about replacing these systems.

This may be driven by frustrations due to changes within the business, dissatisfaction with the system/vendor, or the perceived cost and effort of maintaining the system. Enterprise technology is also changing, with sleek, cloud based, social aware applications ever pervasive in our personal lives.

The reality is that ripping and replacing your HR/Payroll system is hard, time consuming and expensive. Additionally, it is a highly visible project with every employee logging into self service, as well as the important issue of needing to pay staff on time every week.

So before you get too far down the road of dreaming about replacing your HRIS, you need to ensure you really ‘need’ a new system.

Valid reasons for replacing your HR/Payroll System

The only real reasons why you should consider replacing your HRIS would be:

1. A merger or acquisition, resulting in three different HR/Payroll platforms and you need to consolidate and rationalise them.

2. You’re stuck on custom or old versions of the software which is a dangerous trap, but it happens.  Therefore there’s no upgrade path left for you so you may as well go out to market.

3. Your current system clearly does not meet your business requirements. Your business has changed and the system just won’t do what you want it to do.

These are NOT valid reasons for changing:

1. You want better reporting out of your system. Every HRIS I’ve come across has limited out of the box reporting.  You need to find a good reporting tool and someone who’s great at building reports.

2. You’re not using enough functionality. This not a system problem, but a lack of training in how to get the best out of it.

3. There’s something better out there…if only we had XX. Consider how well you have documented or designed your business processes first.

Throwing the baby out with the bath water

Before you make any rash decisions, take time to get some real answers to the following questions:

Can we get more value from our system?

In a number of situations, there is functionality you could be using within the system or it could be configured differently to greatly increase your productivity and efficiency.

You need to find out more by talking to your vendor or to consultants who know your system.

Can we fix or systemise our upgrades?

For traditional on-premise systems, doing an upgrade every 18 months or so is time consuming and expensive.

Look at how you can simplify and streamline the upgrade process by things like reducing customisations, having a well-defined upgrade methodology, using automated test tools or having an interface register.

Is the system letting us down or our business processes letting us down?

A new tool can only improve processes so much. In many HR/Payroll operations there are still considerable improvements that can be made by streamlining processes using core features like self service, workflow and notifications.

Do we understand the HR and business goals?

It may seem like a long bow between your payroll and business goals, but it’s not.

The type of business you are operating in, your workforce composition, business goals and maturity will all influence your HR tech strategy. HR/Payroll is not in isolation and increasingly needs to think about other functions through self service, talent management and enterprise platforms.

You are not alone

Finally, consider getting assistance from independent experts. An independent external view of your situation gives you a different perspective, draws on market knowledge and sometimes just reaffirms what you already know.

Deciding to replace your HRIS is a major investment in time and money and by spending time upfront asking the hard questions and getting advice, you can critically look before you leap.