HRIS, HRMS, HCM: What's the Difference?

Man at crossroads HRIS HRMS HCM concept

“What's in a name? That which we call a rose. By any other name would smell as sweet.”

It was easy for Shakespeare to say that it doesn’t matter what you call something. He was never trying to find new HR technology.

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HRIS, HRMS, HCM … the various acronyms used to describe the HR technology available today can be overwhelming. Complicating matters further is the fact that nobody can seem to agree on what the acronyms actually mean. The letters may fit into place (HRIS, or human resource information system; HRMS, or human resource management software; and HCM, or human capital management), but what do they mean? And don’t even try to find where ATS (applicant tracking system) and WFM (workforce management) fall into the mix. The HR technology industry can be a maze, and the actual definition of each category is still very much a work in progress. The analyst community doesn't even have a consistent definition!

Selecting a new HR solution from among the many options on the market can be a daunting task. HR leaders need a way to sort through the choices available to them and identify a solution that will best meet their needs. The question is, how do you wade through the clutter of technology vendor features and functionality—which all sound the same—and make the right choice? If you’re looking for a system that will help you attract top talent and improve the candidate experience, should you be evaluating vendors that offer HRIS, HRMS or HCM? If you need tools to improve retention while helping you stay ahead of the ever-changing compliance regulations, should you be investigating HRIS, HRMS, or HCM vendors?

Define your unique needs

The fact of the matter is that the old Bard was probably right. It probably doesn’t matter which acronym you use. The three terms are used interchangeably to describe systems that include functionality to address payroll, time and attendance, talent acquisition and onboarding, and talent management. It can be difficult to differentiate between strategic and tactical tools designed to simplify and streamline core HR tasks. And it may feel impossible to determine which solution will deliver better insight into what is going on in your workforce. Core functionality to meet your specific requirements is a must, but there are likely many systems—marketed under each of these acronyms—that can address your core needs in one form or another.

The cloud is the new normal for business applications

Whether you call it HRIS, HRMS, or HCM, the real question is: Are you investing in old technology? Rather than focus on a specific acronym when exploring HR technology, look at the platform used to deliver the technology. Innovative HR technology features are only as good as the platform they’re built on. So before getting dizzy from software acronyms, ask the vendors you’re evaluating to describe the software platform. Organizations today are moving away from rigid on-premise systems that are closed and siloed, and they’re going with a modern, cloud-first approach with tools that meet the needs of a mobile workforce. Modern software has moved to a software-as-a-service (SaaS) cloud-based delivery model. In fact, most new HR applications sold today are delivered as a cloud solution rather than as traditional, on-premises licenses. If you don’t want to make a new investment in old technology, you’ll want to choose a full-suite cloud solution.

The value of a full-suite solution

A full-suite solution checks all of the functionality boxes that arise under the HRIS, HRMS, and HCM definitions. Maintaining multiple, disparate sources of employee information can result in data inconsistencies and increased administrative effort. To find and keep the best people, HR professionals need a solution that blends the talent acquisition functions of recruiting, hiring, and onboarding with the talent management functions of benefits, compensation, and performance management. Store and track employee information in one paperless system that will make your processes faster and easier—and allow you to focus on providing more strategic value to your organization

The HR solution you choose is a critical step toward boosting your organization’s success — but selecting the right vendor to implement that system and support your employee-facing HR processes is equally important. When bringing on a new system, view your technology providers as partners, not vendors, and work with them to build a change management strategy to ensure user adoption. And as you roll out new technologies to your workforce, you can call it an HRIS, HRMS or HCM system, or even make up your own acronym.

Featured Resource: Human Capital Management Buyer's Guide