It makes sense in theory: To simplify operations, combine all the software systems needed to manage a global company into one application.
But in practice, paring down software applications to just three or four in just the human resources department can be a nightmare.
Before the new system is actually fully operational, there’s a long wait, often years, while existing software is not properly upgraded. And once installed, a single system often fails to meet the specific needs of diverse departments and countries, requiring a patchwork of previous systems or new overlays to make sure that tasks get done.
Human resources managers discussed the problems on Nov. 2 at a meeting of WorldCity’s HR Connections, led by Ken Finneran, Chief People Officer for the Americas for Germany-based Hellman Worldwide Logistics.
Managers said problems multiply when departments are not consulted early about their specific needs before an integrated system is designed. That’s especially important for multinationals, whose human resources needs vary widely across countries because of differences in labor laws, tax systems and benefits programs.
The longer the implementation time, the greater the problems, too – resulting in “implementation fatigue,” said Finneran. “If implementation takes more than two years, your employees start to lose confidence in the system and lose momentum.”
To reduce headaches, spirits company Diageo has named “change management” teams to help with its new global Workday Software roll-out. The teams will coordinate such things as training and the logistics of installation in different offices and countries.
“We’ve realized that change management is the difference between success and failure of these projects,” said Jennifer Foreman, who leads Diageo’s change team in Latin America and the Caribbean for the Workday systems project.
Four basic issues tend to snag implementation: cost, resources, language and data, said human resources specialist Sara Baker, formerly HR director for Western Union’s Latin American and Caribbean region.
During implementation, companies too often fail to budget for the full costs of training and installation. They tend to underestimate how training and implementation take people away from their jobs, leaving fewer resources to operate. Plus, system designers also don’t consider that many employees worldwide do not understand English, said Baker.
Once the system is running, many firms fail to take advantage of new data and reports so “people get de-motivated,” Baker said.
“I’ve seen clients with access to all this new information, but they almost need an analyst to use it,” added Lorena Keough, a managing director in Miami with executive search firm Diversified Search, an event sponsor. “Some companies hire a consultant to interpret the data and make it actionable.”
With so many complications, asked Marjorie Kean, another managing director with Diversified Search, has any recognized it bought a bad system and backed out?
“There’s ego involved,” Finneran said, not knowing of any that halted.
That’s because few top executives will publicly admit to costly mistakes, though privately they will make efforts to buy patches or overlays to correct the flaws in a single system, participants said.
Finneran offered some basic tips for implementation drawn from his experience and from the discussion:
Begin with the end in mind. Ask what you want to get out of the system before you start to design it. Ask users what they want.
Think from the customer’s perspective. Make the system intuitive and user-friendly. For example, make the data understandable for employees, not just human resource managers.
Don’t under-estimate the time and costs for consultants, implementation and tweaking systems for different regions.
Implement fast, but not too fast. Leave time for training, but global implementation should not drag out for three years.
For the future, Finneran sees the problems with single management systems diminishing, as “cloud-based” technology gains popularity. Cloud-based systems likely will be cheaper and faster to implement, adapting better to shorter business cycles, he forecast.
“Five years from now,” said Finneran, “we’ll be having a different discussion” about human resources software systems.
HR Connections is one of six event series organized by WorldCity on international business topics. The HR series is sponsored by the University of Miami School of Business, Diversified Search and the European Institute of Social Capital. The next HR meeting is set for January.