Why do I need to think global

May 28, 2014

HRcht-Globe

When selecting and implementing a HCM technology, we plan for everything. We have meetings to discuss current process and what is not working correctly. The one thing that we spend little time on during all these discussions is the overall shelf life of the system.

I see this a lot when it comes to the discussion of global systems. In the distant past, only very large corporations ever considered adding global components to their systems and even then the functionality was basic. As the 2000’s progressed, the mid-markets began to be more involved with global issues. Now it has extended to even small organizations of under 500 who can now have employees outside of their home location.

The economy is changing. Those industries which have historically been in one country alone are considering having offices off shore. The emergence of SaaS and cloud computing has also made global operations more cost effective for organizations. So, how does this impact you as a project leader?

When evaluating and implementing any new HCM software, you should always plan for the possibility of some operation being conducted outside of the home country. There are few industries which do not appear to be impacted by the possibility of working globally, but changes in governmental regulations could change your industry overnight. All industries should always plan that their technology will need to be used outside of their home base.

What exactly does this mean? For basics you need to make sure that the technology you are researching can handle the basics of global data. Can the system handle addresses with differing formats or postal codes? Can fields be renamed so they are not using the specific vernacular of one company and can they be customized to accommodate other country formats?

Here are some key items you need to consider:

  • Languages. Make sure that the technology will handle double-byte characters so the alphabet from China (Mandarin), Japan (Kanji) and Russia (Cyrillic) can be accommodated. Additionally, how easy is it to add a language conversion to the screen tags within the system. This may not be done as easily on some systems.
  • Decide on what will be the language of record (remember, not all English versions are alike). While you may have fields where double-byte characters are legally required, you will want to be able to pull data in one singular language. There is no wrong answer here, but you must decide on one.
  • Localized Data. Can data items be turned on and off based on the country of local? There are many countries where you may be required by law to track religion, while others outlaw the access of such data. The system should be smart enough to be legally compliant in each country.
  • Dual Currency. You will want to store salary information in local currency, but also in the corporate office format. This will require some sort of currency conversion. While most systems offer a conversion table, you will need to think through how the data will actually be converted and how often the rate will be changed.
  • Use of Color. When creating the look and feel of the system, there are some colors which can have negative connotations in specific areas of the world. You should know if any of the countries you are working with have any of these issues.
  • Keep Legal. Many HR professionals assume that the vendor will be keeping the product legal when they purchase a global system. While the vendor will give you the structure to keep everything legal, it is still your responsibility to make sure the system is running according to current law. Have a good resource in each country you work in so you can be current on changes in the laws and interpretations. You should also be aware of the punishment for violating the law in each country – some penalties can be severe.

There are many other issues you need to address when going global, and should you be confronted with this challenge, you may need to reach out for assistance or direction. Always plan for your technology to accommodate multiple cultures and languages. If you create the right foundation you will be less stressed and better prepared when you get the call that your company is going global.

Working within a global environment can be very rewarding. It will heighten your sensitivity to the differences in doing business in other areas of the world and how language and slang can create confusion. When properly prepared for, it will definitely be rewarding in the long term.

John HinojosJohn Hinojos

Vice President, Consulting Services

HRchitect

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Escaping the Landmines: Maneuvering Around the Vendor Landscape

December 13, 2013

Landmine Search

Every time I go to a Human Capital Management (HCM) technology vendor exposition, whether it is at IHRIM, HRTech, or one of the many HR Associations, I am always amazed at the number of vendors, especially new vendors.  It has become an overwhelming job just knowing the changes and upgrade offerings of the major players in HCM, but dozens of new niche vendors offer new systems solutions each year.  How do you know what the right fit is?  Which will be reliable?  Who will treat your organization as special?  These are tough questions to answer in the fast changing world of HCM technology.

Before you begin to evaluate vendors, you must first have a battle plan.  Without this plan you will have a harder time in stepping around the landmines of the technology world.  To create a plan, first you need to understand your needs and create a strategy.  If you have already done an HCM Strategic Plan, take it off the shelf and review it.  Does it need changing?  If so, you will need to update the plan by conducting some type of requirements discovery.  These can be high level with key system stakeholders.  Once you have your updated requirements you can see where the old strategic plan needs to be updated.

Once you have a strategy, you need to know more specifics on where you want to go.  This is best discovered by talking with team members who are directly involved with the HR administration.  Oftentimes, we talk only to our management team members, but understanding how things are actually done by those on the front lines is also critical.  You should also conduct focus groups or individual discussions with key stakeholders.  Remember, many of your stakeholders are outside of HR.  Don’t forget to include them.

Now that you have all the discovery done, you can create a listing of your specific requirements.  Don’t forget to rank or prioritize each requirement.  I usually recommend a 1 to 3 scale: 1 – Nice to Have or Low; 2 – Need to Have or Medium; and 3 – Must Have or High.  Giving each requirement a priority will allow you to understand which elements of your current or new technology is critical to your success, regardless of what others may tell you to include.

Once you have all these steps completed, you are ready for battle with the vendors.  Look for a vendor who you feel will be a good partner and ally.  There are many vendors out there, many you may not even know.  How do you find the right one?  You may need outside help for this.  Consulting firms keep up on most all of the vendors.  There may be a few not on their radar, but a good consultant can help you through the myriad of vendors.  If you want to use the internet, I would suggest you go to an HR site such as IHRIM, SHRM or any professional HR association.  They are usually a good starting point.  Another way to isolate potential vendors is to network with like organizations to see what they are using and if it performs the way they had anticipated.

When looking at vendors, you must also consider their viability.  There are many new vendors coming into the HR space every year, but some are not able to get the necessary funding to remain active.  Others are purchased by other vendors and their product can either be integrated into the new vendor’s product or be eliminated altogether.  You need to do your due diligence.  Again, this is an area where a good consultant can help you.  They have the tools to help you understand your vendor of choice’s viability and financial strength.

With good discovery, prioritized requirements, and strong outside assistance, you can successfully get through the minefield and link up with the correct vendor to provide you with years of HCM technology.

John Hinojos

 John Hinojos
Vice President, Consulting Services

Top Five Strategies in Creating an Impactful ROI & Getting the Buy-in From the Right People

February 12, 2013

When I am conducting a product evaluation, there always seems to be a stumble at the end of the process; hence, a Return on Investment (ROI) analysis needs to be created.

Here are the top five helpful hints I use with clients:

1. Having friends in helpful places

Yours will not be the first ROI developed. Others in your organization have done this and very successfully. Do not attempt to re-invent the wheel here. Start within your department to see if there are successful examples of ROI. If so, study these and use them as the basis for your analysis. If the person who developed the successful ROI is still with your company, search them out and ask for some pointers (what they would have done different, issues they had with approval, etc.)

If you cannot find anyone in your department, connect up with someone in the Finance group. There will certainly be someone there who has done this before and can help you. I have seen instances when the Finance group was also doing an ROI for a technology purchase, and HR and Finance combined their projects to help with an even better ROI. But remember that someone in Finance will be a great help during this entire process.

2. Never enter a battle you cannot win

Getting a project approved, particularly in our current economy, is a much larger challenge than if the economy was booming. Dollars for projects are limited and getting the funding dollars released for your project could have many difficulties. Begin to assure your success by knowing who you will need to present the ROI to get the funding approved.

Once you know the people that will have the final approval, you need to begin to educate them about your project and its benefits. If you know these people before the discovery stage, you may want to include an interview with them to get their input on the types of data and information they need to run the organization. If they feel they have had some input into your solution, you may have a better supporter.

Have a champion. This is a person who will lobby and work with the Executive Team members to push your projects. Often, this will be your Vice President. Keep this person informed about the project and have them review the ROI numbers before they are finalized. This is a busy person, so do not plan to use them to create the ROI, but review and approve.

3. Understand what can be included

This may seem a bit basic, but each company has their own rules and regulations on the types of data which can be included on an ROI. If you are unsure if you company has any directives, start with the VP of HR to see if you can get any guidance. If not, see if someone in your financial reporting group can provide you with insight to what is included. They usually handle this type of data frequently.

Usually, we always see Direct Costs (hard dollar) savings being included.  These are savings which can be directly tied back to the new solution.  Such examples are a reduction in overtime, or the better ability to track on control shift differentials.

Sometimes you can include Indirect Cost (soft dollar) savings. *Be careful with these as many companies will limit amount and types of soft dollar savings, which can be included in an ROI. Examples of these would include the elimination of a future position if the system is purchased. This is soft dollar, as the position is not currently occupied and your assumption is that you would get approval to hire. While the actual approval could be denied or delayed, this would be considered soft dollar.

4. Quantifying ROI Savings

Hard Dollar savings are easy to quantify as they are usually a known current expense. One warning on hard dollar is to be very careful in using staff reduction in your justification. Often you will see a change in the type of staff members you may have, but in many cases you are replacing front-line data entry type employees with more analytical people which are a more expensive resource. Staff savings are usually minimal.

If you can use Soft Dollar, your ROI analysis will be much easier. Here, you can use and quantify current staffing increases as the company grows to a minimum. Before you start any Soft Dollar analysis, remember to put together your assumption for the calculation in case you get asked later. Work with your full team to uncover all the potential Soft Dollar savings. You will be surprised on how many there can be.

Be sure to also include Cost Avoidance estimates. These are Soft Dollar savings but very specific. For example, if you were looking for a new time and attendance system, cost avoidance would be a better calculation of overtime hours. Ascertain what the fines would be for every incident.  Multiply the number of incidents you assume per year that you could be experiencing with your current system and you have the annual cost avoidance.

These can become very large numbers depending on the area and how much governmental impact exists. Remember this may not just be a federal governmental issue, but include any state, city or local impact.

5. Using and presenting the ROI data

You will ultimately be presenting your analysis. This is usually done in a Business Case. It could be a written document or presentation depending on your company standards. Regardless of the type of final format, remember you are usually presenting to senior executives who want a 50,000 foot overview of the project, process and costs. They may ask more specific questions so have all your data organized to find any answers you may not have immediately.

Keep the ROI numbers also at high level. They will be interested when the investment will begin to show a positive return and how your solution will assist in them making decision to run the company.

John Hinojos

John Hinojos
VP Consulting Services
HRchitect


When My Vendor Gets Acquired

March 27, 2012


I recently facilitated a panel discussion on what to do when your vendor is acquired by another vendor.   The panel consisted of a practitioner, a consultant, and a vendor.  It was a very interesting discussion, but one of the most interesting discussions were on the various reasons why a vendor may purchase another vendor.

The first reason is to control competition.  This occurs when vendors feel that competing vendor systems are similar in functionality and there could be limited need for similar offerings.  Usually the vendor does not purchase this product to eliminate the other system, but the usual process of assimilating an acquisition may be a bit faster than in other types of acquisitions.  Oftentimes, various features from the acquired project are incorporated into the next release.  Most vendors will not “kill” a product, but will have one offering which begins to become the stronger of the two.  While the vendor will usually support both systems, at some time the vendor may announce that they will be discontinuing support; however, this is usually done with ample time to move your system and data over to the newer version.

The second is to add functionality.  A vendor may see a competitor of having some features and functionality that is not currently offered in their product, so they acquire the software with the intention of incorporating features and functionality that is missing from their  current offering.  Many vendors will begin to incorporate the features immediately, but usually the addition of the features may take up to 6 months.  The vendor may continue to support both versions of the software, but usually there is a push to move all users to one platform which simplifies the support of the software.

Finally, the third reason to acquire a vendor product is to move into new delivery areas.  We saw this recently with SAP purchasing SuccessFactors.  Both projects will continue to be offered, but the acquisition of SuccessFactors also brings to SAP the access into cloud computing and SaaS delivery, which SAP was just beginning to began to expand into.  At this time both products should continue to be developed, oftentimes, with this type of acquisition the long-term outlook of the product could change as the relationship matures.  This type of acquisition must be continually monitored to see if there will be product changes in the future.

The one thing everyone on which the panel agreed was that the best thing is not to panic when your vendor is purchased.  There is normally no material change to your system or the delivery for at least 6 to 9 months.  The best thing you can do if you vendor is acquired, is to begin to plan.  You may want to reassess how you are using the software to see if it is still meeting you needs.  Should you be coming to the end of your contract, you may want to evaluate other products to assure yourself that the one you are using is still the best fit.  To accomplish this after your vendor has been acquired may be a bit more work than the typical HCM technology staff had bandwidth, and you may want to look to outside resources to assist in your efforts.  Planning for the merger of your vendor into another should always be a risk on your risk mitigation plan.


John Hinojos
HRchitect


Understanding the Vendor Demo Process

March 16, 2012

After assisting multiple clients with the system selection process I always get a bit surprised when the process seems to bog down the closer we get to the demo.  Historically, we spend a lot of time in Discovery, interviewing staff and collecting requirements.  Then we create a RFI or RFP so we can evaluate the vendors in order to invite the strongest three (3) vendors to demo.

Once the RFP is completed, we usually begin working on the demo script.  Often I do get queries from a client as to why we need the script and just don’t schedule the vendor in to “show us the system.”  After some discussion, everyone usually begins to understand that you would not take a trip without a good map or plan, and that is exactly what the demo script will provide.  It assures that those attending the demo will see the same functionality from each vendor and be able to better compare each vendors system performance.

The demo script for any system should be created in a life cycle flow.  For an PR/HR system, as an example, you would start with recruiting, then to employment, to benefits, compensation, Payroll and on through the termination process.  Then you can look at reporting and system set-up.  I usually suggest that there be an agenda for each section of the demo so various members of staff can come into the demo on features which will impact their area of responsibility.  The one thing I normally stress with a client is that everyone be in the same sections for all demos.

Usually I recommend that items on the demo script also be weighted with a priority.  This allows you to weight the scoring after the demo is done and put more focus on the items which are critical to the running of the company.  It does help in creating a Vendor Comparison Report which will show in one page the major areas of the demo and how well each vendor did to the requirements.  The Vendor Comparison Report and the Decisions Drivers are usually the key elements used to select the vendor of choice.

There is a lot of activity going on during the development of the demo script and coordinating the actual demo. I recommend that companies look at using an outside resource from HRchitect to assist with these tasks.  This resource will allow the full client team to be focused on the demo and not on the administration.  If you have any questions about the demo, be sure to ask your HRchitect representative on how they can help make the demo a smooth process.


An Ever-Changing Landscape

February 14, 2012

It has been a very active couple of weeks in the acquisition market for HR systems.  This has sparked many discussions and conjecture within the HR systems industry on how these acquisitions will effect the future of the HR systems market.  While much has been discussed, it is still too early to fully know the impact to the final look and feel of the product.  What appears is that the major ERP players are moving into Software as a Service (SaaS) and, as predicted, there will continue to be consolidation in the HR systems market.

Every time there is a major merger or acquisition announcement, I continue to get calls and emails from HR professionals asking about how these changes will impact their system.  Even if you are not a client of the acquired vendor, the acquisition can impact your currently used technology.  The acquisition could have a profound change in the direction of the specific genre of software or it could result in an entirely new product being developed which will scientifically change the way HR technology is used.  The one thing that is certain, the changes we have seen will continue to occur.

To better prepare yourself for changes in the market, it is very important you have a full understanding of the technology you are using and what are the plans to interconnect the technology.  If you have not created a HCM technology strategy, now is the time to consider the undertaking.  If you do have a strategy, you may want to revisit your original assumptions during the creation to assure that your plan is still viable.  I realize that undertaking such an exercise in a time of smaller staffs can be difficult, but the payback with a solid strategy can help avoid any costly mistakes.

When updating any strategy it is best to get input from system experts.  This can come from organizations such as IHRIM or from reliable consulting firms such as HRchitect.  The knowledge you can obtain from outside resources can eliminate hours of research for you.  When updating your plans to address changes in the HCM technology future, consider using outside resources.  You will save time and update your plan to include the impacts of the recent software mergers and acquisitions.


2012 HCM Budget Observations

January 27, 2012

I recently served as a panelist on a webinar which discussed the 2012 HCM budgets.  The survey was done by IHRIM (International Association for Human Resource Information Management), and some interesting results appeared on the survey which caused me to do additional research on how the past few years of a difficult economy has impacted HR and HR systems budgets.

The good news is that 82% of those surveyed had their 2011 budget kept at the 2010 level or increased.  For 2012 that number is going up to 85%.  While we are still struggling with the economy, it shows that corporate leaders are realizing that they need to begin to invest in their technology infrastructure.  As companies have tried to hold down their expenses, their systems have continued to age and may not be taking full advantage of the technologies being used by  newer groups of employees.

Use of the 2012 budgets appear to be in the Talent Management areas (Recruiting, Performance Management and On-Boarding).  One interesting area of increase is with Business Intelligence, which corporations have realized can help them make better decisions about running the business.  32% of all respondents said they would be looking at some sort of Business Intelligence this year.

Spending on HR technology continues to grow in 2012 as organizations begin to see the economy moving.  There are still many areas which could impact the economy and corporate spending, but if you have allowed your technology and HR systems to become out dated, this needs to be rectified sooner instead of waiting for a full economic recovery.  If you haven’t already done so, you should begin to create an HCM technology strategy roadmap to best use your budgeted funding.


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