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Time and attendance software selection comes down to rules engine, industry

Analysts also advise companies with simpler needs to consider SaaS time and attendance.

Though the technology may seem straightforward, experts say companies must pay special attention to several key factors during the time and attendance software selection process. Knowing the organization’s industry-specific requirements and deciding how complex the rules engine should be will help identify a vendor and tool set that best meets those needs.

One of the first things to consider is whether to go with a specialized time and attendance package or use the capabilities included in a broader enterprise application suite. Experts in selecting time and attendance software generally agree that larger firms with complex workforces and a global footprint are more likely to benefit from highly focused, specialized packages while companies with a smaller and less diverse hourly workforce have more flexibility in choosing options.

Getting started on software selection

“A general rule of thumb is that the more complicated the workforce is from a union perspective or geographic diversity perspective, ERP packages don’t perform as well as best of breed,” said Brian Koniuk, a principal with The Hackett Group, a global business advisory consultancy based in Miami.

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Understand the potential labor savings

ERP vendors are lacking in two primary areas, according to several experts. They tend not to fully exploit the unique capabilities of the hardware systems that go hand in glove with time and attendance software, and they can’t match the complex rules engines of the specialized applications, which are built from the ground up to handle time and attendance. “There needs to be a pretty sophisticated rules engine to take the raw data from the clocking device and apply a set of rules to determine what the gross pay is,” Koniuk explained. “That’s something that’s pretty hard to build and build in a way where you don’t get heavy into customization. The best-of-breed players have spent more time working on the rules engine.”

Serving up SaaS time and attendance software

Another major factor for time and attendance software selection is determining what software delivery model best meets the needs of the organization. While time and attendance software has traditionally been a standard, on-premises application, as with most enterprise software platforms today, a variety of new vendors and traditional players serve up the capabilities as Software as a Service (SaaS). Proponents say the SaaS time and attendance software route reduces IT and administration costs since companies don’t have to invest in the expensive hardware and people resources to run and administer the systems. It also allows them to “pay by the pound” according to use patterns and the number of users.

Here too, the on-premises vs. SaaS time and attendance decision should be predicated on the characteristics of the workforce, experts say. Companies without a lot of complicated rules that have straightforward scheduling requirements and don’t need all the horsepower of traditional systems should consider SaaS time and attendance platforms as a means to a faster, more cost-effective deployment.

“SaaS is a good, sustainable deployment model because it relieves companies of the burden of keeping all their software up to date,” said Paul Hamerman, an analyst at Forrester Research Inc., a research company based in Cambridge, Mass. “Tons of customers who own these systems are two, even three releases behind just because it becomes a difficult chore to maintain the software. SaaS definitely has increasing appeal.”

Because the regulations governing employment can vary by size of company and especially by industry segment, it’s particularly important to evaluate the time and attendance system in light of how it can meet a company’s compliance needs, the experts say. Companies with employees in certain regions, for example, need to be sure the system can support local work rules, in addition to any child labor or time-off laws that may be relevant.

In addition, because there are so many niche vendors in the category, The Hackett Group’s Koniuk advises companies to put some muscle into evaluating the long-term viability of the potential vendor along with its vision and where it is channeling research and development money. Other issues to consider: The supported hardware devices, since they are a critical component of the system; the training capabilities offered by the vendor; and the pricing model.

Finally, because different types of companies have different requirements, experts suggest gravitating to time and attendance software vendors who have expertise in the same industry segment. “The requirements for a retailer are different than those of a manufacturer, just as a hospital is different than a supermarket,” said Thomas Otter, an analyst at Gartner Inc., a research company based in Stamford, Conn. “You always have to seek out vendors with a good industry understanding.”

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