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Right HR System

Publish Date: Monday, February 14, 2005

Getting the right HR system starts with getting the right consultant
Buying a new HRMS is both a daunting and a tricky proposition

Author: David Brown

By 2003, TDL Group Corp, the parent company of Tim Hortons, had outgrown its HR management system. 

It couldn’t provide self service or automated processes, and it couldn’t communicate with the payroll system, explained Scott Busch, compensation and HR technology analyst with TDL. 

It was getting to the point where the company would have had to hire more people just to manage all of the processes, he said. Instead the firm decided late that year to take the leap and buy a new HR management system. 

Once it was agreed that the company needed a new system, and after taking an inventory of technical expertise in-house, it was clear they needed an outside consultant to help with the selection process, he said. 

After doing some research and asking around, Busch and his team came up with a list of five potential consultants who were called in for an interview. A top concern was finding consultants who did not come into the process with any biases toward one system or another, said Busch.

They knew they would be heavily dependent on the consultant’s experience and expertise, and his opinion would hold a great deal of sway in their decision on which system to purchase. 

And so, it was imperative that the consultant provide unbiased opinions about the HR systems to figure out which one was best for TDL, said Busch. 

Some of the consultants came in and told a good story about what they could do for the organization, but then, when asked, revealed their last five projects were for one system, explained Busch. 

“They said they would give us a bias-free approach, but that is hard to believe if they are so closely associated with one type of system,” he said. 

Another cause for concern was if the consultants showed a lot of interest in the implementation process, he said. 

Some companies would give low quotes at the front end, or refundable quotes conditional upon receiving the implementation work, said Busch. 

Again, it was hard to believe the consultant was being completely objective if he recommended a system he was most comfortable implementing, said Busch. 

With initial bids from the consultants varying wildly — the highest bid was four times the lowest bid — it also seemed the consultants had very different ideas about what the project entailed. 

Some had simply put additional details into the primary project, and others interpreted the work one way while TDL envisioned something very different.

“So we produced a scope clarity document saying we want this and this and if there is anything else please put it in as extra.”

One of the early bidders was almost $100,000 over what TDL was prepared to pay. And even after looking at the scope clarification document, the consulting firm stood by its initial projection, which eliminated it from further consideration. 

Another part of the interview process was figuring out if the consultant’s approach and work style would complement TDL’s style. 

“We wanted someone who was progressive, but we wanted a slow evolution versus a revolution,” said Busch. 

The company has processes and a way of doing things that did not need changing. If the consultant came in and turned everything upside down, it just wouldn’t have worked, said Busch. 

From a short list of five, they interviewed three and checked references on two. It was important to figure out how the consultants handled other projects and to ensure the consultants had a track record of meeting the expectations and needs of earlier clients. “To us, this was a key project. Maybe not to them, but to us it was and we wanted their best resources,” said Busch. 

There was quite a bit of interest in getting the project, said Busch. “We have a great brand and everyone wanted to put our brand on their customer list.” But TDL also knew that interest in landing the project would not necessarily translate into the same level of interest afterward. 

“(The consultants) could present people up front as people you could use (for the project), but those people could get moved. So we wanted to get some commitment about the resources and that they were going to be there for the life of the project.”

After about five or six weeks of meetings and deliberations, TDL eventually went with Toronto-based Al Doran’s Phenix Management. Doran works on his own, but it was clear he had a strong network of experts he could call on if needed, said Busch. 

And perhaps most importantly, Doran had no interest in implementation, said Busch. “So we knew we were going to get a bias-free approach.” 

Doran’s first step after getting the job was to produce a project plan outlining what needed to be done. On top of the to-do list was process mapping and needs assessment. 

Doran met with stakeholders from across the organization, not just HR. 

Choosing and implementing the right HR management system is never easy, said Doran. 

“It is expensive, it is time consuming and it is painful as hell.” It takes a great deal of commitment from the entire organization and often they aren’t willing to give it. Too often the clients simply want to hand the project over to the consultant. “Most of the time I am begging (clients) to pay attention,” he said. 

Not so at TDL. “They were probably the best client I have ever had,” said Doran. 

In any organization, the secret to choosing the right system is getting a very clear picture of what the system needs to do and what the leaders in the organization hope to get from it in the future, said Doran. That requires all stakeholders, not just HR, to really think about how they interact with HR, how they use HR-related information and how that has an impact on what they do. 

“You really need to be thinking about ‘What am I doing now, what should I be doing now, and where are we going with the company?’” he said. 

“An HR system isn’t just for HR. It is for employees,” said Doran. So the whole organization needs to take part in defining how it operates currently and how it could change with a new system. Doran was given access to everyone he wanted to consult, and in each instance the person gave Doran everything he needed. 

“(Meeting with so many people) made sure it was a business project and not just an HR project,” said Busch. “(Doran) interviewed business leaders to understand not just the payroll needs, but he got input from them about what was frustrating them about HR.” 

He then met with vice-president of HR Brigid Pelino to figure out what HR hoped to do with a new system.

Once Doran was clear on what the company both needed and wanted he drafted a request for information (RFI) which was reviewed by Busch, who changed only a few things. 

The RFI was then sent to 10 possible vendors. Of those 10, eight replied. A few vendors not on that list called Busch to say they were surprised they weren’t considered for the contract. “If Al believed they weren’t right for the project, then they probably weren’t right,” said Busch.

The completed RFIs were distributed to the HR project team, a cross-functional team of eight, put together after the needs assessment. 

“The team represented all of the major business functions,” said Busch. “We had a pretty big mix of people, the purpose being that if all the parties see what is out there, then we will meet the needs of the business.” 

Cursory reviews quickly eliminated some of the contenders, said Busch. It was absolutely essential that the system be bilingual, for example. It should have been more clear in the RFI that this was not optional or something the company was willing to let the vendor develop, he said. “We got to the third line and threw out some applications because (the system) wasn’t bilingual.” 

The team came up with a short list of four vendors which were called in for two-day presentations. Here again, Doran played an important role in setting the agenda for the demonstrations. Working with the HR project team, he came up with some specific tasks for the vendors to complete. One request was to run the payroll with a new garnishee added. In another test, the vendors were given some scrambled data. “Some were able to integrate that into their presentation; others said it couldn’t be done. It showed how easy it was to use,” said Busch. 

The test also said something about the commitment of the vendors. “If you want our money, bend a little. And if you can’t bend a little, find a way to bend a little.” 

One of the final four was eliminated early because everyone agreed it was too complicated, said Busch. “It was very difficult to look at and work with.” 

After that, the group got into some close analysis of the pros and cons of the functionality of systems. Busch kept the costs away from the project team because he did not want that to influence their decision about which was the best system for them. 

The favourite was called back in for one final demonstration and to give the members of the team a chance to try it for themselves, he said. This final meeting was enough for the team to make its recommendation to the TDL project steering committee. The committee agreed and the deal was close to being signed at press time.

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