HCM Implementation: Best Practices, Challenges, Cost
- May 20, 2022
HCM software provides a holistic, digital approach to people management. HR departments use the data from these applications to understand and manage their entire workforce. HCM software empowers HR departments to automate manual and routine processes, and streamline all aspects of employee management – while giving employees more control over their own personal benefits and records.
HCM systems are a critical part of HR digital transformation and include features that help automation and modernize:
- Payroll
- Employee management
- Contractor management
- Employee performance management and review
- Employee benefits such as PTO, health insurance, etc.
- 401k plans and stock incentives, and much more
But organizations shouldn’t expect to take advantage of the benefits of an HCM software by simply purchasing a new system. Finding ROI on your HCM technology investment hinges on well-executed software implementation and an effective rollout plan.
Implementing a powerful HCM system will benefit your entire business when implementation is done effectively. The key is to build and execute an HCM software implementation strategy that encapsulates the development and logistics, as well as the employee experience and HCM adoption strategy.
In this guide, we’ll cover the most important aspects of a successful HCM implementation to help your organization drive adoption of a new HCM system and find software ROI.
HCM Implementation Cost
The cost of implementing a new HCM system will vary depending on your business size and scenario but often range from $500 to $10,000 for most companies – and up to $100,000 for enterprises.
Costs differ based upon various factors, including the system itself, the existing state of employee data management at your company, the size of your company (ie. number of employees), how you plan to use the platform, what legacy system(s) you currently use, the team executing the rollout, and so forth.
No matter the solution, it will be important to leave room in the budget for underestimated or unforeseen costs.
Types of HCM Implementations
Businesses seeking to implement a new HCM solution may take several approaches, from handling the implementation internally to hiring third-party consultants with specialized expertise.
1. In-house implementation
In-house implementation ensures lower costs in the short run but often results in gaps or technology issues that cost more in the long run. Sometimes requirements don’t match up as expected or a lack of knowledge hinders training.
Additional challenges of handling an implementation internally include requiring many hours from your engineering team and managing HCM-related support questions internally with your own IT support team.
2. HCM partner-led implementation
HCM partners are formally certified by a specific software vendor to install the new HCM product, train users, and generally oversee the entire implementation process. Most HCM vendors will strongly advise that their certified partners be utilized to ensure efficiency and success.
This is often a better option for larger companies with larger-scale, more complicated implementation needs. Typically this can be quite expensive and may not be a realistic option for SMB-type companies.
3. Third-party implementation
In other situations, an HR team might choose to enlist a different third-party vendor to guide them through the implementation that isn’t associated with the HCM vendor they’re implementing. This might be a vendor that, while not certified to implement one specific software, has more wide-ranging expertise in general HCM implementation, vendor requirements, and software knowledge.
4. Hybrid approach
For smaller companies, many HCM software vendors advocate for an implementation approach that allows businesses to oversee their own implementation with the assistance of an implementation partner or other third-party solution vendor, suggesting more involvement from the outside party as the project grows and becomes more complex.
At the end of the day, each of these options has its own benefits. The right choice will mean assembling or hiring a team that is well-equipped with the necessary technical knowledge and is dedicated to seeing the project through to success.
11 Steps of a Successful HCM Implementation
Implementing a new HCM system requires a lot of moving parts, so breaking the process up into steps can help keep things organized and moving forward.
1. Build an HCM implementation project team
First off, make sure you truly understand the ins and outs of your new HCM software. Take time to review the way the software is structured and outline the roles and responsibilities you will need to get the job done.
Then figure out what resources are available to meet targets and goals, and pull everything together. It may be helpful to pull in team members with particular sets of skills or knowledge, such as compensation, IT, people management, and overall company operations. Depending on the availability of internal resources, it may be effective to seek out external consultants to assist.
2. Set goals, outcomes, and metrics
Once your team has been assembled, set formal time to gather and discuss the project, and negotiate roles and responsibilities. Come together prior to implementation to set expectations for what a successful rollout will look like.
Work together to come up with a realistic timeline that doesn’t overload team members with new technology all at once. Once you’ve established timelines, goals, and successful outcomes, establish metrics that will be used to track and measure milestones and overall success.
Be sure to include executives and other project sponsors to make sure everyone is on the same page and avoid misunderstandings.
3. List all HCM project requirements
Next, assemble a prioritized list of requirements for this project. Delineate all functional and technical requirements, then organize them into tiers by priority considering how much flexibility can be allowed in how each one is completed.
Incorporate checkpoints throughout this process to contextualize each requirement. Why are you including these checkpoints? How might this process be improved? How will each component hold up as things change in the future?
4. Create a change management strategy for your workforce
Shift your mindset to the future and start to flesh out a change management strategy. This will help your company stay prepared for changes such as employee resistance, supply chain issues, acquisitions, or leadership changes.
Think about how you will recognize change, approve and implement adaptations, and try to foresee how people might resist or assess risk. How will these factors affect project timelines, budgets, and communication processes?
Gather the information necessary to be sure your organization is ready for big changes by answering these questions and then dive into plans for communicating changes, developing training materials, and counteracting resistance before it even has the chance to arise.
Above: In-app employee guidance created with the Whatfix Digital Adoption Platform
Whatfix’s DAP empowers organizations with a no-code editor to create in-app guided flows, onboarding tasklists, pop-ups, tooltips, alerts, reminders, self-help wikis, and more to enable employees to use software better. Enable your employees to become proficient in new applications faster, create interactive process documentation, guide users through process changes, assist employees through infrequent tasks, and provide self-help performance support on your CRM, ERP, HCM, or any desktop, web, or mobile application.
5. Migrate your HCM data
Locate and review all your company’s existing people data to assess what needs to be converted for migration. Take the time to clean the data and remove anything that is outdated or messy. Review and standardize naming conventions, streamline code, eliminate redundancies, and ensure that all of the data being moved to the new system is clean, consistent, and ready for migration.
Plan out your migration as a crucial component of the implementation. Enlist a subject matter expert for the team to organize a test migration with dummy data and adjust as necessary. When it’s time to actually migrate the data, you can take advantage of migration tools that help with the move and validation.
6. Start onboarding and training
Once the HR team is prepped and thoroughly acquainted with the new HCM software, begin preparing to train the rest of your organization’s users with a software onboarding and training plan. This will help drive adoption of your new HCM system, which is the critical factor in finding ROI of your new HR investment.
Determine whether training will be provided in-house or through any outside vendors assisting in other implementation efforts. Decide whether it will be conducted in person or virtually and get the ball rolling.
Do the behind-the-scenes work to realign internal processes, manuals, and resource libraries to keep everybody equipped for success. Make sure employees are motivated and receptive throughout the process with questionnaires and surveys designed to gauge sentiment. You can also use a digital adoption platform to provide ongoing support after initial training.
Your onboarding plan will need to be comprehensive, yet not impact your employees’ day-to-day responsibilities. You’ll also need to make sure this is scalable to use for new hire onboarding, as well as routine re-training for HCM activities that may only be done a few times a year (ie. performance reviews, benefits sign-up, etc).
It’s a smart idea to invest in a digital adoption platform like Whatfix to create a contextual, guided HCM onboarding and training plan that allows your employees to learn the new system and its features, without interrupting their day-to-day.
With Whatfix, HR leaders can create in-app guided content for their HCM, including:
- Product tours
- Interactive walkthroughs
- Step-by-step tutorials
- Task lists
- Smart tips
- Embedded knowledge bases
Whatfix allows your HCM users to receive HCM assistance and support directly inside the app, when they need it, without needing to leave the application or submit a support ticket. Whatfix allows for organizations to get feedback from their employees on the relevancy and helpfulness of their HCM onboarding and training right in their workflows with embedded feedback surveys.
The platform also captures employee behavioral and event data that allows HR teams to understand how their employees are engaging with their learning flows, how they’re using the new HCM system, what features are (and aren’t) being adopted, and what additional types of training must be added or improved.
7. Launch beta tests with small teams
HCM vendors often provide some level of their own testing during setup, but further beta testing often needs to be done internally. Develop a testing plan with your implementation team that covers all high-impact configuration areas and agreed-to functional requirements.
Testing may need to be done at several levels or in several parts depending on needs. For instance, you may need to test payroll configuration with a select group of team members while carrying out parallel runs on the legacy solution until confidence is high enough in the new setup.
Once testing is complete, review reports and analytics to pinpoint any hiccups, adjust, and test again.
8. Go live
After you’re sure everything is running smoothly, it’s time to finally launch! Don’t hesitate to make a thing of it – make an announcement to the company that the new system is in place and let everybody know how the new HCM system will benefit their experience with the company.
9. Monitor for technical issues
As the system rolls out, keep an eye on reports and analytics to keep track of any additional issues that arise. Keep monitoring employee feedback through surveys and check-ins to catch any usability issues that aren’t showing up in the data.
If you took advantage of third-party implementation assistance, bring the issues back to their team to see if they can clear things up using existing knowledge rather than jumping to reinvent any wheels.
10. Prepare for heavy amounts of end-user support tickets
As team members are getting used to the new system, they might experience frustration and be more likely to submit a support ticket at the first sign of trouble. Prep your end-user support team for this influx of tickets and make a gesture to show them how valued their attentiveness will be during this time.
With a digital adoption platform like Whatfix, organizations are able to create a self-help knowledge base that integrates directly with your new HCM platform. This allows end-users to search for their contextual questions and find answers, support documentation, external links, training material, and more to help solve their personalized issue or question – allowing organizations to provide on-demand, self-service support to their employees, while also cutting down on support tickets.
11. Gather feedback from your team on the HCM implementation rollout
Once everything is up and running and initial kinks have been smoothed out, reassemble the team to discuss everyone’s experiences. Depending on their role within the organization, each team member will have valuable information to provide to further improve this project or keep in mind for future software rollouts.
Challenges of HCM Software Implementation
HCM applications are high-cost investments for organizations, and often companies face challenges during the implementation phase. Here are the most common HCM implementation challenges organizations must overcome to find ROI from their technology investment.
1. Driving adoption of your new HCM application
With any big change comes hesitation, and implementing new HCM software is no exception. Encourage team members to get on board by clearly demonstrating the value the new system will bring, who they can turn to for support, and how the new system will affect their roles within the company.
Adoption may be the biggest challenge of the implementation and rollout. Without employees actively using the platform, your organization will fail to capture the benefits of the application and will have wasted budget and resources on a failed technology investment.
As we mentioned earlier, we strongly recommend investing in a digital adoption platform to provide in-app guidance and on-demand support for your employees. This provides a guardrail to protect your company from HCM adoption risks and protects you from software failures.
2. Handling a heavy amount of HCM-related support tickets
HR and IT help desks provide invaluable support throughout the rollout of a new HCM. No matter how thoroughly the implementation team has prepared, end-users are bound to experience issues and frustration that come with learning new software.
Prior to implementation, ensure that these teams have adequate staffing and have been exhaustively trained in the new system. This way they can tackle the possible flood of HCM-related support tickets as they come with tact and confidence that their work will truly help their fellow team members acclimate themselves.
With a digital adoption platform, organizations can be proactive with their support strategy and deflect a large number of HCM-related support questions by creating on-demand support content inside your HCM platform.
3. Migrating HCM data
Inconsistent or otherwise faulty data can cause problems across the board. Data migration is a complicated process that needs to be handled carefully, by a subject matter expert with both technical experience and an understanding of the project and your overall business requirements. Safeguard your outcome further by testing with dummy data.
4. Properly customizing your new HCM
Finding a highly configurable HCM software that will allow you to incorporate customized branding is important but will require much balance and foresight. Keep in mind that customizations require additional funds, effort, and time, and may need to be reworked as requirements change in the future. Find a solution that balances these factors sustainably, providing a good fit and a lasting value.
The path to implementing a new HCM system can be long and winding, but proper planning can make the journey much smoother. Choosing the right team and carefully preparing for a rollout is key to getting the absolute most ROI on your company’s new HCM software.
With Whatfix, your employees are empowered with the tools, training, and support they need to maximize the benefits of your new HCM application – without the need for additional IT support or traditional training.
Learn more about Whatfix for HCM applications now!
Request a demo to see how Whatfix empowers organizations to improve end-user adoption and provide on-demand customer support
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