Who bought what and didn’t use it: Is there shelfware in your organization?

Hardware, software — these are terms we know. But shelfware is a new one. It refers to software that is purchased and never used. It simply sits on the shelf, hence the term. In our survey, we examined the modules that were implemented and not used. It paints an interesting picture of unused resources in organizations.

The most critical factor in shelfware is the date of implementation. Like purchasing bread at the supermarket, shelfware has a shelf life. If software is purchased and not used for a period of time, it likely will never be used.
HRMS shelfware occurs for many reasons:

1. Some organizations purchase an HRMS system and then are involved in a merger or takeover and never implement the purchased solution.

2. Others purchase the software with every intention of implementing the system but there is always a higher priority or the sponsor left the organization and the remaining staff did not have the time or interest in implementation.

3. Often organizations buy the software, do not implement and continue to pay the ongoing maintenance fees for several years. They then subsequently purchase and implement another system because the first system no longer meets their needs.

4. Shelfware occurs when an organization purchases multiple modules of an integrated HRMS system and then does not use them, relying instead on manual systems, spreadsheets or sometimes, separate stand-alone systems.

5. The last form of shelfware occurs when an organization fails to take advantage of the functionality in the portions of the system that have been implemented. As an example in table 1, “Core HRMS modules implemented but not used,” 11 companies purchased an HRMS system that allowed the company to track assets assigned to employees (Employee asset tracking). This feature allows companies to track items such as company cars, laptops and access cards, and to associate them with an employee. The functionality is fairly basic but provides a “snapshot” means of identifying assets by employee. Should an employee terminate, the company can quickly identify the items that need to be recovered from the employee.

In a company that implemented an HRMS only one or two years ago, it is not unusual to find that they have phased the implementation of modules and eventually will use the features. In a company that has used the software for five or more years, it is pretty much a foregone conclusion that they now have “shelfware.”

That is a bold assertion. Some companies may simply have chosen not to track these items. Other companies may have created other asset tracking, security administration or fleet management spreadsheets and then maintain a separate system thereby increasing the cost and complexity of the task.

In our survey, we asked organizations about certain features of an HRMS and whether the organizations had implemented them. The question described an HRMS feature such as “Job information – position description.” The survey’s forced-choice range of possible responses was: “Being implemented; Core HRMS-used; Core HRMS-not used; Bolt-on, Out-sourced; Planned; or Not planned.”

In table 1, we compiled these survey responses by the date of implementation of the system. For each survey participant, who provided a date of implementation, we cross-tabulated the responses to produce this chart. For example, if a company indicated that the HRMS was implemented in 1997 and then indicated that “Company work location information” was Core HRMS – not used, then it was a candidate for owning shelfware.

Software implemented in excess of five years ago and not used will in all probability never be used. The likelihood of an urgent need occurring after five years is minimal.

Interestingly, items such as “Employee compensation” and “salary grades” are almost always implemented. This reflects their importance in comparison to training and recruitment processes that tend to be addressed later or not at all. “Employee human rights information” and other legislative items also seem to take a lower priority. In part, we believe that this is a prioritization issue, but it may also reflect the difficulty of obtaining (and maintaining) this information in the system.

Of course, many companies purchase their software and phase the implementation of the functionality in the software. They implement critical data such as demographics and pay information first. Subsequent phases include additional functionality.

If the first chart represented shelfware, the second chart reflects wishful thinking. Using the same approach as above we looked at the response of “Planned with an eye towards future plans.” We totalled the planned activity by the year the system was implemented. So, if a company implemented the system in 1995 and indicated that it was one of the two companies that planned to implement occupational health and safety records, we think it may fall into the wishful thinking category.

There certainly are some exceptions to this broad statement. A company may have recently upgraded its software and obtained occupational health and safety capabilities that were not present in the first implementation. Unfortunately, the survey cannot identify these situations.

For companies that implemented their system within the past five years, (five years is not a hard and fast rule but merely an arbitrary cutoff) this planned feature may be a legitimate phase-two activity. Companies, having implemented phase one of their implementation, now plan to implement additional functionality and that is what the “planned” response indicates.

This graph indicates there is a significant amount of activity coming in the next year. It also reinforces that typically all of the work that is planned for a system is commonly achieved in the first five years following implementation.

The graph is the total of the features planned for implementation. In these companies, one company might plan on only implementing one new feature this year. Another company, may plan on implementing several items. This graph is just representative of the amount of work being contemplated. To get a better sense of what specific areas are being addressed we drilled down into the data.

As we did in table 1, we compiled respondent data as to features that they planned to implement by the year they implemented their HRMS system. As the chart shows, there will be considerable interest in the areas of competency management, career planning, succession planning and performance management over the next year.

This result may be interpreted two ways. The first is that basic functionality such as compensation is implemented in HRMS systems first. The second is that the areas aimed at generating productivity from an organization’s workforce are becoming more critical. If the second item is valid, this survey trend may indicate that HRMS is becoming more of a strategic weapon in the HR functions toolkit. We certainly hope so.

Or it may be that both interpretations are correct. It certainly warrants further investigation as we prepare the final survey report.

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