Is-Your-Outdated-HCMS-Costing-You-Money.pdf

Why an Outdated HCMS Could Be Costing Your Company Money
Human Capital Management Systems (HCMS) have become an essential tool for many companies in managing their workforce. These systems help organizations streamline their HR processes, track employee performance, and ensure compliance with regulations. However, many companies continue to use outdated HCMS that can cost them a lot of money. In this article, we will explore the reasons why an outdated HCMS could be costing your company money and what you can do to avoid it.
Introduction
Companies must keep up with technology advancements in today's fast-paced business environment to stay competitive. The Human Resources (HR) department is one area that is frequently disregarded. To effectively manage their personnel, businesses must have efficient HR operations. Here's where HCMS comes into play. Unfortunately, a lot of businesses still rely on out-of-date HRIS, which might end up costing them a lot of money over time.
What is an HCMS?
An HCMS is a software application that enables an organization to manage its workforce effectively. It helps automate and streamline HR processes, such as employee recruitment, onboarding, payroll, benefits administration, and performance management. These systems can be cloud-based or installed on-premises, depending on the company's preferences.
The Importance of an HCMS
An HCMS is essential for organizations to manage their workforce effectively. It helps companies to:
• Automate HR processes and eliminate manual errors.
• Track employee performance and progress
• Ensure compliance with regulations.
• Improve decision-making through analytics and reporting.
• Enhance employee engagement and satisfaction.
Outdated HCMS Can Lead to Inefficiencies
Using outdated HCMS can lead to inefficiencies in HR processes. For instance, if your HCMS is not integrated with other HR systems, you may have to manually input employee data into each system, leading to errors and duplications. Similarly, if your HCMS is not cloud-based, you may have to use a VPN to access it remotely, causing delays and downtime.
Security Risks with Outdated HCMS
Outdated HCMS can also pose security risks to your organization. Cybercriminals can exploit vulnerabilities in the system and gain access to sensitive employee data, such as social security numbers, bank account information, and medical records. This can lead to identity theft, fraud, and other security breaches.
Integration Challenges
Outdated HCMS can also pose integration challenges with other HR systems, such as applicant tracking, learning management, remote employees, talent management and performance management to name a few. This can lead to inconsistent data, delayed reporting, and inefficiencies in HR processes.
Lack of Customization
Outdated HCMS may also lack customization features, such as custom workflows, reports, and dashboards. This can limit your ability to tailor the system to your organization's specific needs, leading to

1. Is Your Outdated HCMS
Costing You Money?
Human Capital Management Systems (HCMS) are essential to
streamline HR processes, improve decision-making, increase employee
engagement, and ensure compliance with regulations. But outdated
systems can lead to inefficiencies, security risks, and increased costs
for your organization.
by T D N Soedarto

2. The Importance of Upgrading Your HCMS
Efficient HR Processes
Streamline your HR processes and
eliminate manual errors that
could lead to inconsistent data.
Improved Decision-making
Acquire crucial HR data analytics
and reporting to make better-
informed decisions.
Better Employee
Engagement
Improve employee engagement
and satisfaction through
automation and simplification of
HR processes.

3. Outdated HCMS Inefficiencies
Lack of Integration
Manual inputting of employee data to multiple
systems, leading to data inconsistencies and
inefficiencies in HR processes.
Lack of Customization
The system lacks customization features that
help tailor it to the organization's specific
needs, leading to inefficiencies and frustration
among HR staff.
Incompatibility with newer
technologies
The system is not compatible with newer
technologies like artificial intelligence and
machine learning.
Remote Access Issues
The VPN access method to access the system
remotely is outdated and can lead to delays and
downtime.

4. Security Risk of Outdated HCMS
1
Vulnerability Exploitation
Cybercriminals can exploit vulnerabilities in
outdated HCMS and access sensitive employee
data including social security numbers, bank
account information, and medical records.
2
Security Breaches
Such a security breach jeopardizes the
sensitive personal data of employees and may
lead to identity theft, fraud, and legal action
against a company.
3
Reputation Damage
Outdated HCMS security breaches can tarnish
the company's reputation and turn away
customers, investors, and employees.

5. Integration Challenges and Compromised
HR Processes
Applicant Tracking
Applicant tracking software can't
integrate with outdated HCMS,
leading to manual duplication and
inconsistent data.
Learning Management
Older HCMS may not integrate
with newer LMSs, preventing
employees from accessing
required learning materials.
Talent and Performance
Management
Having different systems for
talent and performance
management could slow down HR
processes with discrepancies and
inconsistencies.

6. Increased HR Costs with
Outdated HCMS
1More staff required
Outdated HCMS may
require more HR staff to
manage data manually,
increasing HR expenses.
2Higher Maintenance
Costs
The maintenance cost of
an outdated HCMS would
be higher because of the
additional hardware and
software investment
required to support it.
3Missed Opportunity Costs
Data-driven insights that can be acquired from advanced HCMS
can help an organization make accurate decisions for its
workforce, revenue, and growth.

7. Better Alternatives to Outdated HCMS
Cloud-based HCMS
It's scalable, cost-effective, and easily accessible
from any location with an internet connection,
making it ideal for remote and global teams.
Integrated HCMS
As it works seamlessly with other HR systems, no
manual intervention is required to input data or
maintain the system, leading to better efficiency
and seamless HR processes.

8. Key Considerations in
Choosing an HCMS
Scalability and flexibility: look for a system that can scale up or
down with your organization's growth.
Integration: choose the one that integrates seamlessly with all the
HR systems you currently use.
Cloud-based vs. on-premises: choose the one that fits the needs of
your organization.
Security Features: evaluate the security features that the system
has to offer in comparison to your organization's security
standards.
Customization options: consider choosing a system that has
customization options to fit your organization's specific needs.
Vendor reputation and customer support: evaluate the vendor's
reputation in the market and ensure that it offers reliable support.
Compliance, Law, and Regulation: Assess the HCMS's compliance
standards with legal regulations and labor laws in your country or
region.

9. Final Thoughts
Organizations should migrate to advanced HCMS for better processing,
efficiency, automation, and compliance. The present outdated HCMS
can put the organization at stake with several inefficiencies, integration
challenges, and security challenges. Choosing a reliable HCMS with a
good reputation, vendor support, easy accessibility, scalability, and
integration with other HR systems is key to drive growth, productivity,
and employee satisfaction while reducing the costs of an organization's
functioning in a competitive business environment.