Analyzing the strategy of introducing an HRIS against the background of feasibility shows that the company does not fulfil the resource requirements to become successful with the strategy as HRIS requires teamwork and interaction (Fischer, 1991).
In contrast, the outsourcing strategy appears to be feasible as it grants flexibility and is often recommended to small and medium-sized companies that lack experience (Rodriguez, 2000). Although CGMS is characterized to be the industry leader, the management and HR department did not manage to grow with the company and therefore, recommendations for small and medium-sized companies might still be suitable for CGMS. Source: Spencer (2014)
Moreover, the outsourcing decision matrix …show more content…
Moreover, according to a study conducted by PricewaterhouseCoopers (2004), “given the complexity of in-house systems on the market today, and the increased frequency of system installations, financial and other corporate executives may need to reevaluate their methods of calculating total payroll and HR administration costs” (p. 16). Furthermore, the study suggests, that companies are not aware of the ongoing costs that are related to implementing an HRIS …show more content…
In contrast, in the case of outsourcing, reversing the decision might become difficult as it will be difficult to get hand on well-trained staff. Therefore, the loss of tacit knowledge which occurs due to outsourcing may be irreversible (Ellram, Tate & Billington, 2008). In addition, some contracts may not allow termination at short notice. Summarizing, the outsourcing decision should be evaluated well.
In both cases (HRIS and outsourcing), the company needs to ensure and communicate that the employees data is secured from misuse. Moreover, outsourcing can worsen the working atmosphere and decrease employee motivation and commitment (Kakabadse & Kakabadse, 2000). In addition, managers must be open to embrace the outsourcing decision by realizing that the loss of control and possible conflicts of interest caused by outsourcing is outweighed by the benefits to the company. Consequently, introducing an HRIS can only be successful if the employees are trained and supported to make use of this feature.