The story of Human Resources Information Systems

The earliest computerbased systems developed for HCM (Human Capital Management) were often used to automate and support payroll and other dataintensive functions but the field has often lagged behind other functional areas including accounting and supply chain management in applying innovative technologies. The HCM field did not recognize the importance and benefits of technology until the nineties, in the last 20 years, technology has had a dramatic influence on HCM processes and practices, and a new field has emerged, human resource information systems, which focuses on using technology to support the HR function. What started out as a simple mainframe system to automate payroll has now touched all areas of HCM including recruitment, selection, training, and compensation. Not surprisingly, these systems have greatly improved many HCM sub-functions and enabled the field to enhance efficiency, decrease administrative burdens, and provide improved service to employees, retirees, and job applicants. Furthermore, the advent of the Internet and new cloud-based technologies have helped HCM achieve the critical goals of attracting talented applicants, streamlining selection processes, facilitating the use of self-service technologies, and allowing organizations to deliver training in remote locations. For its entire history, the HCM field has been shaped by government regulations and reporting requirements. As organizations grew in size and geographic scope, they faced demands to develop more effective means of recording and storing data on employees and processing functions such as payroll.

1950

Large organizations such as GE developed their own mainframe payroll systems; others began outsourcing payroll processes. One of the first vendors to capitalize on this outsourcing opportunity was ADP, the oldest and longest-lived payroll companies, which was founded in 1949. By the late 1950s, mainframe computers were being used to support payroll applications, some of the first business processed to be automated and supported by information systems.

1960 - 70

The 1960s and 1970s were characterized by increasing reporting requirements during this time, a small German company, SAP, was founded and began developing applications to support payroll and basic human resource functioning. By 1979, they had a more integrated version, called R/2, which became the pre-cursor of the integrated enterprise systems that companies use today.

1980 - 90

In the 1980s and 1990s, the development of computer networks allowed organizations to capture, store, and manage data in multiple locations, and databases dedicated to HCM began to move to platforms other than mainframes, such as the personal computer. Organizations began setting up local area networks (LANs) to connect their hardware. In addition, the personal computer’s development meant that organizations had a lower cost option than mainframes and that employees and managers could access information from their worksites. During this timeframe, organizations began to adopt a client-server approach to delivering business applications.

By doing this, organizations were able to store employee data in multiple locations, records could now be stored in regional offices where local HR staff could be responsible for maintaining them locally. Records were more accessible to managers and others who needed to use the information for personnel decision making, and information was more current and accurate. The early leader in the client server space was PeopleSoft, which was developed and released for the client-server platform rather than the mainframe. The development and release of PeopleSoft represented a key milestone in the field’s evolution because it was the first software package that was designed specifically to support human resources rather than being an add-on to an ERP. Software vendors began to expand product offerings in the HCM space. Products were no longer confined to core HR systems. Vendors began offering PC and client-server based systems in areas such as applicant tracking, performance appraisal, training and development, and HR planning. In this period there was also a shift from a manufacturing to a service economy, and, in the new economy, organizations viewed employees as being critical to their success. Global competition caused organizations to become more concerned with productivity, and, along with the increasing sophistication of information systems, organizations engaged in widespread downsizing, restructuring, and redesigning. Furthermore, organizations began to believe that they competed with others on the basis of the talents and skills of employees, and human resources became an essential function.

1990 - 2010

This era was characterized by an explosion of software product offerings and a move to more integrated, Web-enabled enterprise resource planning systems. This was especially true starting in the early 2000s when Web-based software enabled organizations to centralize all HCM and organizational data so that users could access it through Web browsers at any time or place. For instance, these systems enabled organizations to develop recruiting systems that could be used to attract applicants anywhere in the world and allow them to apply for jobs online through a Web browser.

Vendors typically took two different approaches when offering products: best of breed or an integrated ERP suite.

With the best-of-breed approach, organizations purchased and implemented separate systems for each area of HCM such as a core HR system, a recruitment system, a time and attendance system, and a benefits management system. The advantage of a best-of-breed approach to software implementation in HCM was that organizations could identify and implement the software that most effectively met their needs in each specific area to improve performance. However, these systems often did not integrate well or allow for seamless data transfer, which forced organizations to often transfer data manually between systems. For example, best-of-breed organizations often had to manually transfer data from the talent acquisition software into the core HR system. In addition, each software offering came with a separate login and password, which created challenges for employees. To overcome these issues, many organizations either developed, or had others develop, middleware, software designed to allow data to move between systems that could sit on top of these disparate systems and that provided connections between the software, reduction of manual entry, and even single sign-on capabilities. Another challenge of the best-of-breed approach was that vendors were not likely to upgrade modules on a similar schedule, meaning that the middleware software would need to be continually upgraded to support changes in the various software product offerings.

The other approach organizations used was to purchase an integrated HR ERP as part of a broader organizational-wide ERP or simply one that integrated multiple HR functional areas. Advantages of the ERP approach included simpler software implementations, greater data integration, and easier learning. Conversely, using an ERP meant that the organization was not going to have the best software in each domain and that it often missed out on functionality available in a best-of-breed solution. In addition, the complexity, scope, and expense of these systems meant that they were available for only the largest organizations. Still, many organizations found many advantages in using an ERP. This seamless integration of data allowed organizations to make more effective use of employee data. Many software vendors developed product offerings in areas such as recruiting or time and attendance and, after becoming successful, became takeover targets for firms seeking to broaden the scope of their offerings.

Examples of best-of-breed vendors included Taleo (recruitment),Kronos (time and attendance), and ADP (payroll) were known for their best-in-class offerings in a specific area. Taleo was purchased by Oracle, and ADP went from being a payroll vendor to moving to become an integrated ERP.

Examples of leaders in the HR ERP space included SAP, PeopleSoft, Oracle, and Lawson. A major innovation during this timeframe was employee self-service, employees were able for the first time to manage their own employee information, review and allocate retirement funds, view paychecks, receive company information, enroll in health benefits, and more.

With the adoption of the Web, many organizations began to use the Internet to attract job applicants. The move to the Web was so pronounced that, by the early 2000s, a great number of firms were using e-recruiting as an important part of their recruitment practices. They also began to employ elearning systems to deliver training to employees, and increase the flexibility, convenience, and costs associated with traditional training methods.

2010 - 2018

With cloud computing, rather than designing and customizing software to meet each organization’s needs, vendors now offer a standard software product to all firms. Although the software is not customizable, each organization can configure it to meet their own specific needs.

Organizations no longer have to purchase and maintain hardware and software but instead access the software over the Web though a Web browser. This can reduce up-front capital expenses such as hardware and software purchases and can reduce the need for internal IT staff because much of the technical responsibilities are outsourced to the cloud vendor. Small organizations that previously could not afford to deploy HR technology due to the large up-front investment requirements were now able to consider investing in cloud systems due to the reduced cost of ownership. The current leaders in cloud-based solutions include Oracle, SuccessFactors (now SAP), and Workday. The move to cloud computing has also coincided with an increased use of mobile and social technologies. Software vendors are offering cloud-based solutions that are compatible with mobile devices, and some vendors, such as Success Factor and Workday, are pursuing a “mobile-first” approach to software development. In addition, organizations are continuing to adopt social media to support human resources. Through cloud, mobile, and social technologies, this fourth generation of technology deployment dramatically impact how organizations use HR technology and how organizations recruit and select employees.

2018 - today

The last frontier is about measure and improve employee experiences at every stage of the lifecycle.

The idea is to measure real time feedback from employee in order to understand what matter most to the organisation.

One of the pioneers in this area is Qualtrics (now SAP) that gives to leaders and managers access to real-time results. With configurable, role-based dashboards and key driver analysis, it's really simple to understand which are the main trends and give to the organization the opportunity to take the right decision.