Technology Choices and Architectures

It is important to understand that any HR technology implementation requires a 'core' HR system. This is often referred to as the Human Resource Information System (HRIS) and is the primary transaction processor, editor, record keeper and functional application system that lies at the heart of all computerised HR work.

Figure 1 highlights the factors that influence the overall technical solution, which will comprise the core HR system and other functional elements. How each factor impacts on the various elements of the solution depends on the importance that an organisation applies to each. However, all these factors will have a significant impact on the overall cost. For example, legacy systems could be used 'as is', 'upgraded' or even 'replaced' by newer, more advanced systems. These decisions depend on factors such as the capabilities of the legacy systems, the nature and scope of existing contracts with third parties, and the expected functionality required in the long term. Each choice will have a cost and benefit which has to be weighed against the desired outcomes. Further elaboration of these considerations can be found in Table 1.

Table 1: Benefits and disadvantages of each of the main technical options 

	Benefits	Disadvantages
Option 1: company system	Predefined process Low complexity of data connectivity between modules Relatively low level of internal IT support for implementation and operation required Ease of upgrades and regression testing over system Similar user functionality across all modules Ease of reporting across modules Organisation management and workflow engines span all modules	High cost of implementation and licensing Rigid process structure leads to system driving process re-engineering rather than system adopting best fit for organisation Difficult to configure beyond basic look and feel Some modules are not necessarily 'best in breed' Can require constant external operational support if there are low levels of IT skills within the organisation
Option 2: separate internal modules and core HRIS	Allows 'best in breed' purchase of each HR module Potentially allows for a 'cheaper' option than the core HR system Ability to negotiate better prices for each module Allows system configuration for each module to match company processes better	Complex connectivity issues between individual modules and core system Higher levels of support required for each separate system User interfaces have to be configured more heavily to ensureconsistency in the user portal Workflow and organisation management and reporting become more complex to manage across different systems
Option 3: internal core HRIS with ASP modules	Managed services require less internal HR and IT skills Particularly good for complex HR modules that require a high degree of skill, for example, benefits management and pensions management Less operational risk to HR.No requirements to keep on top of change, legislation and good practice Reduced complexity in HR cost planning	More expensive for a managed service HR has reduced control over delivery of services to the business Complex connectivity issues with core internal HR systems Increased configuration to ensure standard user interface Increased complexity in managing workflow organisation management and reporting Increased complexity in security across the net, encryption and single sign on for users
Option 4: outsource all systems	Reduces risk to the business Reduces requirements for HR admin and IT skills in the business Reduces complexity of cost planning and resourcing in HR Fully managed and supported service Contracts and SLAs to support required service levels Economies of scale and ability to share good practice across all outsource clients	High cost Could involve significant, detailed process mapping and long implementation time table if existing operational arrangements within client organisation differ markedly from those of the outsource provider Complex contracts and services levels have to be agreed in advance Rigid service delivery to the organisation Ad hoc and unforeseen services create high cost for the business Lack of control over service provision Loss of administration skills internally

 

Figure 1: Factors that drive the technical approach to technology adoption.

Essentially, there are four options:

• Option 1 — HR core system with integral modules that can be 'switched on and configured' to create a 'single' HRIS.
• Option 2 — HR core system with modules bought, configured and hosted separately (still on internal networks) and connected back to the core system.
• Option 3 — HR core system with modules hosted and managed externally and connected back over the Web to a core system — also known as application service provision (ASP).
• Option 4 — Outsource of all systems including the core HRIS.

The benefits and disadvantages of these options are outlined in Table 1. The decision about which option to take is most important because it affects the complexity of the build, architecture and cost.

Note: it is possible to have a combination of options 2 and 3 where some modules are outsourced and others are hosted internally.