Why do HRIS implementation costs often exceed estimates?

Why do HRIS implementation costs often exceed estimates?

• A. Inadequate time and effort spent to complete an investment analysis
• B. Underestimating hardware capacity
• C. Overestimating user adoption
• D. Mispricing software licenses

Answer: (A)

When implementing an HRIS, the budget overruns most often come from not spending enough time and effort on the upfront investment analysis. A thorough analysis should spell out the total cost of ownership across the project, including data cleansing and migration, process redesign, system configuration and customization, multiple system integrations (payroll, timekeeping, benefits, etc.), extensive testing, security and compliance considerations, training and change management, and post-go-live support. If the initial analysis is rushed or shallow, these areas tend to be underestimated, and hidden or uncaptured costs creep in as the project unfolds, pushing actual outlays higher than planned. In many cases, the overruns aren’t caused by one obvious miscalculation but by the broader scope of work that wasn’t fully identified and quantified from the start. That’s why inadequate time and effort spent on the investment analysis best explains why HRIS implementation costs exceed estimates.

When implementing an HRIS, the budget overruns most often come from not spending enough time and effort on the upfront investment analysis. A thorough analysis should spell out the total cost of ownership across the project, including data cleansing and migration, process redesign, system configuration and customization, multiple system integrations (payroll, timekeeping, benefits, etc.), extensive testing, security and compliance considerations, training and change management, and post-go-live support. If the initial analysis is rushed or shallow, these areas tend to be underestimated, and hidden or uncaptured costs creep in as the project unfolds, pushing actual outlays higher than planned. In many cases, the overruns aren’t caused by one obvious miscalculation but by the broader scope of work that wasn’t fully identified and quantified from the start. That’s why inadequate time and effort spent on the investment analysis best explains why HRIS implementation costs exceed estimates.