Media Buzz

Whatever You Want

by Philip Whiteley

HR and payroll systems don't live up to their promise, and employers don't use them strategically. At least, that is the common view. Payroll World convened a round-table discussion to ask if the industry is maturing. Philip Whiteley took part.

There is a scene in the classic movie "Miracle on 34th Street" where the department store Santa Claus directs customers to a rival outlet to help them get what they want. The store owners are initially horrified, but the moral is that the parents and children are so enchanted with the altruistic gesture that the store's reputation – and its business – are enhanced.

There are tentative signs that the IT industry is learning this timeless lesson. Providers are starting to have the confidence and maturity to direct clients elsewhere if they cannot meet their needs.

As HR and payroll software becomes more sophisticated, the idea that a single provider can be all things to all people is less and less plausible.

Elisabeth Ibeson, director of resourcing development at drinks giant Diageo, relates how her decision to use specialist provider BrassRing for recruitment systems did not reflect the slightest dissatisfaction with the PeopleSoft system that the multinational uses for most payroll and personnel needs.

Lara Bruhn, director of BrassRing, comments: "Can one provider really provide everything – benefits; payroll; talent management?

"It is an over-used phrase, but one size does not fit all. There are very big differences, not just technology, though there is value to a common platform, but in the whole approach. The fundamental underlying processes and people factors are different [for payroll and HR] – it would be like having creative people in an advertising agency also doing the data mining for the mailing list."

Overselling is not a new concern in IT. Too often, purchasers lack sufficient technical knowledge; salespeople look to the commission rather than the long term. So if a provider is asked "Can this HR software do payroll?", the temptation is to answer "Yes" when the honest answer may be: "It can carry out basic payroll calculations, but not others that you might need, and it may not be the best product for the purpose."

A complaint from the providers" side is sometimes that users do not understand the capability of the system, and buy an expensive product just to automate a few basic processes, leaving much of the capacity unused.

The common theme to both problems is a lack of strategic thinking to determine the core needs of the business as a whole and construct the optimum systems around those.

Participants to the round-table discussion were agreed that the mature approach to managing HR and payroll – and the attendant IT systems – is to start with the business need and work back.

Too often, departments and vendors have said "Here's a solution, let's look for a problem to match it."

Being strategic doesn't mean everyone being a strategist. It means specialist roles supporting the commercial objectives.

A company may want better trained call centre people to improve customer service. The HR people invest in recruitment and training, and rejig the pay scheme to reward customer retention.

Payroll and IT specialists set up the systems to determine accurate overtime or shift costs and absence rates. Personnel people can use these and other data to gauge if the new strategy is working.

"You have to understand objectives and measure what you have done," says Elisabeth Ibeson. "You have to sit with heads of sales, marketing, IT. It is not just HR and payroll – that is missing the point. You should work back from what the business needs.

"As an organisation you don't invest unless there is a return-on-investment calculation. I would love providers to say what they stand for and what they don't; to acknowledge that they can't be all things to all people. Senior managers want one button. But this is Utopia, and too often providers respond by saying “we can do it” when they can't."

In spite of the boom and bust of the dotcoms, not everyone in business has lost a certain "e-naivete" – a tendency to assume that online connections can magically solve deep-rooted business problems, or be applied to everything without thought or analysis. Technology isn't magic, and the role model to follow is the pragmatic Santa Claus of the department store, rather than believe in the real one bringing wonderful gifts without cost.

To an extent, technology companies have colluded in the myth. What this discussion showed was that at least some users and providers are moving on to a more realistic discussion that focuses on what the business needs, and deploys technology to fit.

What do you think? Are HR and payroll IT suppliers guilty of overselling?

This is an extract from a feature that will appear in the December issue of Payroll World. See home page for details on subscriptions and obtaining a free copy

Participants in the discussion were: Roger Fullilove of ADP; Richard Bishop-Laggett of ISS UK; Elizabeth Ibeson of Diageo; Lawrence Knowles of Midland HR & Payroll Solutions; Lara Bruhn of BrassRing.