HCM Adoption Christopher SmithNovember 18, 2021

Are Human Resources Information Systems Worth the Investment?

Are Human Resources Information Systems Worth the Investment?

A human resources information system, or HRIS, is a software platform that manages employee information and performs HR tasks under a centralized dashboard.

Although each HRIS platform includes different features, common tasks these tools administer include:

  • Benefits administration
  • Payroll
  • Talent management
  • Performance development
  • Time tracking
  • Employee training
  • Succession planning
  • Employee self-service
  • Employee experience management
  • Reporting and analytics

In short, an HRIS is designed to streamline core HR tasks and workflows.

Some of these platforms are quite robust and designed for large-scale enterprises. Others are more compact and used for SMBs and midsized companies.

The capabilities and pricing will naturally vary depending on the solution you choose.

Why Use a Human Resources Information System?

An HRIS can be beneficial for several reasons.

They can:

  • Improve efficiency and productivity
  • Free up staff time for more valuable activities
  • Enhance the employee experience
  • Lighten HR workloads

Ultimately, these platforms can create more value for the organization.

An information system is typically thought of as a database, and a human resource information system is no different. 

However, it is useful to point out that some people use the term “HRIS” interchangeably with other HR software platforms, such as an HCM platform.

Should You Invest in an HRIS?

As a rule, in the digital era, it is wise to stay up-to-date with technology changes and trends.

As IT transformation and democratization changes workplaces, tools such as HRISs and HCM platforms are becoming the norm, and companies that don’t adopt HR software risk losing ground to those that do.

That being said, an HRIS is not a cure-all for every organization – there are other platforms worth considering. Also, every organization should choose a tool that is designed for its own needs and scale.

It is true that as an organization begins to grow, they will need more robust functions, and it becomes necessary to invest in specialized software. Micro-businesses and small businesses, however, may not need the robust functionality of an HRIS. 

Here are examples of HR tools that serve organizations at different scales:

  • HR software, or HR platforms, are designed to help small- and medium-sized businesses
  • HRIS platforms serve medium- to large-sized organizations
  • HCM platforms typically serve large enterprises and corporations

While large-scale organizations often invest in an HCM platform, companies that truly want to improve their HR function may also consider specialized HR platforms.

For instance, an applicant tracking system offers specialized features such as applicant tracking and recruitment.

Other platforms focus on other HR functions, such as learning management or employee experience management.

Factors to Consider When Choosing HRIS and HR Software

The larger the enterprise – and the more interested the company is in improving its internal operations – the more useful tools such as these become.

That being said, there are other factors to consider beyond the size of the organization and a platform’s features.

Other factors to consider include:

  • The integrations of a software program
  • The cost
  • Whether the platform is cloud-based or not
  • The number of people in your organization
  • The number of people in your HR department
  • The complexity of deployment
  • The reputation of the company offering the HR solution
  • Your organization’s future digital roadmap

Investing in an HRIS solution should be a careful, multi-party decision that takes multiple factors into account, such as those listed here. A new HRIS platform, after all, will impact the entire organization, requiring significant investment of both time and capital. 

Additionally, it is worth understanding that software is designed to be used as part of a digital ecosystem – that is, your HR platform will not operate alone.

It will be used in conjunction with other digital tools, including:

When investing in any HR platform, it is also important to take into consideration not only the existing software that your HR department uses, but also the platforms they will be adopting in the months and years to come. After all, if your digital ecosystem changes in two years, this could pose a problem for your HR solution, which may require yet another migration to a new platform.

Examples of HRIS Solutions and HR Software

Here are a few examples of HRIS and HCM platforms:

  • Workday
  • Oracle
  • SAP
  • Talentsoft
  • Ultimate Software
  • SuccessFactors

A few examples of smaller-scale platforms include:

These solutions are just a few of the many options on the market, and there are many excellent choices. Be sure to do your due diligence, consult with the other business leaders in your organization, and invest in an option that will benefit your organization for years to come.

Final Thoughts

HRIS, HCM, and other HR platforms offer a wide range of benefits to HR departments and the entire organization as a whole.

The right choice can deliver major efficiency and productivity improvements, cutting costs, reducing waste, improving business outcomes, and more.

Yet, as we have seen, it is important to take other factors into account, such as your organization’s strategy, growth, and digital roadmap.For that reason, it is useful to collaborate closely with IT leaders, such as CIOs, as well as other relevant department leaders.

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