UNIT V

What is mobile commerce?

Mobile commerce, also known as mCommerce for short, refers to the buying
and selling of goods and services among buyers and sellers via wireless devices,
such as tablets or mobiles. Thus, online shopping via a desktop computer will
not be counted as mobile commerce.

Let us take the digital wallet apps as a typical example.

Do you use electronic payment applications, such as Apple Pay, Samsung Pay,
or Android Pay? They are created by app developers so that users can make
money payments through a direct connection to their bank account. To ensure
safety and security, often, they will have two-factor authentication enabled.
That is, in addition to the password of the application account, the user also
needs to authenticate the account via his phone number.

Thus, you do not need to log in to the website on your computer to make
payment transactions like before. Not limited to in-app purchasing, mobile
banking apps, now mobile commerce technology also allows you to locate,
shop, buy tickets, book hotel rooms, meals, and more.

Wireless Application Protocol

WAP stands for Wireless Application Protocol. It is a protocol designed for

micro-browsers and it enables the access of internet in the mobile devices. It
uses the mark-up language WML (Wireless Markup Language and not HTML),
WML is defined as XML 1.0 application. It enables creating web applications
for mobile devices. In 1998, WAP Forum was founded by Ericson, Motorola,
Nokia and Unwired Planet whose aim was to standardize the various wireless
technologies via protocols.

WAP protocol was resulted by the joint efforts of the various members of WAP
Forum. In 2002, WAP forum was merged with various other forums of the
industry resulting in the formation of Open Mobile Alliance (OMA).

WAP Model:

The user opens the mini-browser in a mobile device. He selects a website that
he wants to view. The mobile device sends the URL encoded request via
network to a WAP gateway using WAP protocol.

The WAP gateway translates this WAP request into a conventional HTTP URL
request and sends it over the internet. The request reaches to a specified Web
server and it processes the request just as it would have processed any other
request and sends the response back to the mobile device through WAP gateway
in WML file which can be seen in the micro-browser.
WAP Protocol stack:

1. Application Layer:
This layer contains the Wireless Application Environment (WAE). It contains
mobile device specifications and content development programming
languages like WML.
2. Session Layer:
This layer contains Wireless Session Protocol (WSP). It provides fast
connection suspension and reconnection.
3. Transaction Layer:
This layer contains Wireless Transaction Protocol (WTP). It runs on top of
UDP (User Datagram Protocol) and is a part of TCP/IP and offers transaction
support.
4. Security Layer:
This layer contains Wireless Transaction Layer Security (WTLS). It offers
data integrity, privacy and authentication.
5. Transport Layer:
This layer contains Wireless Datagram Protocol. It presents consistent data
format to higher layers of WAP protocol stack.
 Cellular Network communication

Cellular network is fundamental technology for mobile phones, personal

communication systems, wireless networking etc. The technology is planned
to replace high power transmitter/receiver systems for cell radio phones. For
data transmission, cellular networks use lower capacity, shorter range, and
more transmitters.

It is not a complete wireless technology because the cellular network refers

to a large area of mobile networks that is used for network access.

A mobile device is linked to its base station using an air-based interface and
also using a physical and link layer protocol.

Every base station is connected to the Mobile Switching Centre to help set
up a call and mobility network by connecting mobile phones to wide area
networks. Whereas, devices used in wireless networks are used to access the
internet.

For example, wireless fidelity is a network device used to connect to the

WLAN network to access the internet and a wireless access point, AP.

Cellular networks rely on the availability of network ranges and Wi-Fi

has a limited range.

Let us understand the communication in step by step manner as given

below −

Step 1 − When we turn on the cell phone, the Control Channel seeks to
get the SID (System Identification Number).

Step 2 − The Control Channel is a special frequency used by the phone
and base station to communicate with each other.

Step 3 − If the cell phone finds it difficult to get a connection to the
control channel, a "no service" message is shown.
Step 4 − If the SID is accessed from the cell phone, it compares the SID
to the SID programmed on the phone. If both SID's match, the phone
recognises the portion of its home system as the cell it communicates
with.

Step 5 − The handset, along with the SID, also transmits a registration
request and the MTSO (Mobile Telephone Switching Office) keeps track
of the location of your phone in a database. When it needs to ring the
phone, MTSO understands which cell you are in.

Step 6 − Then, the MTSO gets the signal and tries to locate the phone. In
its database, the MTSO searches to find the cell in which the phone is
stored. To take the call, the MTSO then chooses a frequency pair.

Step 7 − The MTSO communicates over the control channel with the cell
phone to tell it what frequencies to use. Once those frequencies are
switched on by the cell phone and the tower, the call is associated.

Step 8 − When the mobile phone moves towards the edge of the cell, the
base station of the cell will experience a drop in signal power. The base
station in the cell in which the phone travels will be able to see the signal
intensity of the phone rise at the same time.

Step 9 − By means of the MTSO, the two base stations coordinate
themselves. At some level, on a control channel, the cell phone gets a
signal and guides it to change frequencies. This will make the phone
move to a new cell.
What is spectrum ?

Spectrum refers to the invisible radio frequencies that wireless signals travel
over. Those signals are what enable us to make calls from our mobile devices,
tag our friends on Instagram, call an Uber, pull up directions to a destination, and
do everything on our mobile devices.

The frequencies we use for wireless are only a portion of what is called the
electromagnetic spectrum.

The entire electromagnetic spectrum encompasses other frequencies we interact

with daily, even if we don’t think about them. You may remember ROYGBIV
from elementary school. That’s the acronym for the colors that make up the
visible part of spectrum—the spectrum we see. Other parts of spectrum carry
broadcast radio and television or serve other everyday functions.

Portions of electromagnetic spectrum are grouped in “bands” depending on their

wavelengths—the distance over which the wave’s shape repeats. The full
electromagnetic spectrum ranges from three Hz (extremely low frequency) to
300 EHz (gamma rays).  The portion used for wireless communication sits
within that space and ranges from about 20 KHz to 300 GHz.

Spectrum wavelengths are classified into different bands within the

electromagnetic spectrum range.
When we talk about radio spectrum, we are talking about the range of radio
frequencies that are used for communicating. Think of your radio dial. As you
go up and down the dial, you locate the radio stations operating on particular
frequencies. Now just imagine that radio dial expanding much, much further in
both directions—that’s where you would encounter frequencies assigned to other
uses, whether it’s mobile phones, or satellite TV, or air traffic control, or police
radios. Spectrum is the entire range of frequencies.

How Does Spectrum Work?

Because a range of spectrum frequencies can be used for cellular

communications, different bands have slightly different characteristics. For the
purposes of wireless communication, we can think of spectrum in three
categories: low-, mid-, and high-band spectrum.

You might have read that we need more of all three for robust 5G networks.
That’s because each band of spectrum is essential for a different kind of
communication and use case:

 Low-band spectrum (under 3 GHz) travels longer

distances with minimal signal interruption. Today’s
wireless networks are built primarily on low-band
spectrum, and the wireless industry has used this
spectrum to build high-speed wireless networks that
cover 99.7 percent of Americans.

 High-band spectrum (above 24 GHz) travels much

shorter distances—think meters, not miles—compared
to low-band spectrum, but offers high capacity and
ultra-fast speeds.
  Mid-band spectrum (between 3 and 24 GHz) blends the
characteristics of both low- and high-band spectrum—
providing a mix of coverage and capacity.

These spectrum frequencies are transmitted between cell sites and our mobile
devices. The most common cell sites in use today are the 150 foot cell towers we
are accustomed to seeing along highways or atop tall buildings. But small cells
—small scale antennas—are now being rapidly deployed to densify network
coverage and provide more frequent connection points for 5G’s mid- and high-
band spectrum.

The Federal Communications Commission (FCC) oversees commercial

spectrum allocation. The FCC works collaboratively with the National
Telecommunications and Information Administration (NTIA)—which oversees
government use of spectrum—international bodies, and Congress to allocate
spectrum bands.

The FCC often allocates spectrum for commercial use through a spectrum
auction. These auctions work like any other—tracts of spectrum are available to
be purchased by the highest bidders, raising money for the U.S. Treasury.

Spectrum can be licensed—meaning it is bought for exclusive use by specific

providers—or unlicensed, meaning anyone can use the frequency. Your
Bluetooth device and Wi-Fi connection rely on unlicensed bands, for instance.
Both licensed and unlicensed spectrum serve important functions, and the FCC
has set aside spectrum for both.

Spectrum is a finite resource, however, and we cannot make more of it. But the
good news is that spectrum can be repurposed. The federal government controls
roughly 60 percent of spectrum, and regulation and legislation can help identify
bands that the government should reallocate for commercial use.
Spectrum is a highly complex concept, but the bottom line is that it’s the core
component of wireless communications. All of the amazing benefits 5G
promises—smart cities, telemedicine, agricultural advancements, and more—
depend on it. And the more effectively we utilize it, the greater the benefits.

What is mobile commerce?

Mobile commerce, also known as mCommerce for short, refers to the buying
and selling of goods and services among buyers and sellers via wireless devices,
such as tablets or mobiles. Thus, online shopping via a desktop computer will
not be counted as mobile commerce.

Let us take the digital wallet apps as a typical example.

Do you use electronic payment applications, such as Apple Pay, Samsung Pay,
or Android Pay? They are created by app developers so that users can make
money payments through a direct connection to their bank account. To ensure
safety and security, often, they will have two-factor authentication enabled.
That is, in addition to the password of the application account, the user also
needs to authenticate the account via his phone number.

Thus, you do not need to log in to the website on your computer to make
payment transactions like before. Not limited to in-app purchasing, mobile
banking apps, now mobile commerce technology also allows you to locate,
shop, buy tickets, book hotel rooms, meals, and more.

Differences between mCommerce and eCommerce

Mobile commerce is a part and a new evolution of eCommerce. Of the total

eCommerce sales of 2017, 34.5% were mobile commerce sales, and now, it has
grown to more than half, or 54%.
However…

It is not simply part of eCommerce.

Mobile commerce technology can do a number of things more than we would

expect from eCommerce, facilitating a number of new and existing industries
and services, such as mobile money transfers, digital content purchases, and
delivery, contactless payments, location-based services,

Types of mobile commerce

There are 3 types of mobile commerce, including:

 Mobile shopping

These are optimized eCommerce platforms that allow users to conveniently

shop on mobile devices without having to zoom in. In addition, shopping
applications and social media platforms, such as Facebook, Twitter, Pinterest,
and Instagram, also use mobile commerce technology for the same purpose.

 Mobile banking

Now, transferring and receiving money over the internet has never been easier
and more compact. Most banks have developed this service for mobile phones.

 Mobile payment

The cashless needs of users have been met with diverse mobile payment
options.

Mobile commerce development: from searching to shopping

Mobile commerce development is associated with the application of the internet

through mobile devices. In 1997, Coca-Cola allowed buyers to pay via SMS at
two vending machines in Finland, and it has laid the foundation for later
applications by other brands.

2007 was the breakthrough of mobile commerce technology when Apple

released the first smartphone that did not use the SMS system. Digital payment
applications have also developed gradually with many popular names, such as
Amazon Pay, Paypal, Apple Pay, Google Pay, Samsung Pay, etc.

Currently, not only businesses but also banks are increasingly investing in
mobile commerce technology to improve their mobile apps. It is estimated that
by 2023, the revenue of the mobile payment market will reach $4.574 billion.

4 Main mobile commerce technologies

SMS

SMS, or text messaging, is familiar to everyone. It is the oldest mobile

commerce technology, supporting two-way interactive messaging. It is so easy
to use that anyone can access it no matter what type of mobile device they are
using.

With this mobile commerce technology, users will receive one-way push
notifications, such as news, alerts, offers, and other data. In addition, two-way
interactive messaging is also supported, allowing users to message call centers
to look up personal information, such as bank accounts.

USSD

USSD is a mobile commerce technology that is only popular in a few markets

like parts of Africa, Europe, Central America, Southeast Asia, and India.
Similar to SMS, users appreciate USSD’s ubiquitous availability and ease of
use. It is accessible from almost any phone. However, what USSD does better
than SMS is that it is encrypted so that it can incorporate secure password or
mobile PIN protection. Thus, the messages that users send will not be stored on
their mobile devices.

WAP/Mobile Web

It is suitable for users who do not use smartphones but still want to use mobile
web access services. Compared to the original WAP standards, WAP 2.0 is a
step further, providing them much closer to a desktop and laptop Web
experience. It is a variation of HTML, which most smartphones are supporting
for their users to use. However, WAP does not have access to the features of
users’ mobile phones like every app does.

STK

STK stands for SIM Toolkit, which is used by appearing in the menus of mobile
devices as a permanent application through being stored on the Subscriber
Identity Module (SIM) card. This mobile commerce technology uses the SIM to
receive requests from the application, then sends the information to give
commands to the mobile device. What makes STK so highly regarded also
includes its security capabilities in the form of identity verification and
encryption, making it ideal for financial or mobile commerce deployments.

Mobile commerce technology’s advantages

Increase customer retention

Similar to the purpose of eCommerce in general, mobile commerce technology

was born to serve customers, provide them with a better overall experience,
thereby increasing customer retention for businesses. Evenly, customers now no
longer need a desktop computer. It is not only convenient but also diverse in
product types and competitive in price.
Have good potential for revenue growth

The percentage of mobile commerce in eCommerce sales is increasing day by

day and shows no sign of stopping. Retailers are investing more in mobile
commerce technology. Obviously, it’s a gold mine that needs to be explored, so
why are you still hesitating?

Provide a multi-channel experience

Mobile commerce technology allows businesses to advertise and sell products

through multi-channel easier than any other form. It is great for you to
implement strategies to put your product on the website and attract customers to
visit it wherever they regularly spend their time.

Diversify payment options

The variety of payment options is also its advantage as it can help the
customer’s purchase process go faster. Specifically, about these options, we will
explain more clearly below.

Can be expanded

With mobile commerce technology, all parts of your business can be expanded
to suit the growth of each stage of the company. It is also partly thanks to the
support of platform providers as a competitive factor to attract businesses
looking to invest in this area.
Below the opportunities that mobile commerce technology brings, we should not
ignore some of the following mobile commerce threats:

 Optimization’s threat: If you don’t pay attention to changes in

technology, practices, or design, etc., you will not be able to take
advantage of mobile commerce to increase sales but, on the contrary, will
fall behind your competitors.
 Competitors’ threat: While you can easily reach customers and
competitors to exploit their information through mobile commerce, this
also means they can do the same with you.
 Core value threat: When you focus all your resources on developing
mobile commerce technology, it may affect your core business activities,
such as the traditional in-store shopping experience.

Mobile commerce features

From high-performing mobile apps, we’ve researched and compiled some must-
have features. You can refer and apply these mobile commerce features for your
application to be more successful.

 Push notifications: Make sure it’s useful and relevant to your customers’
interests, i.e., promotions, new developments, order statuses, etc.
 Location tracking: This feature will make your push notification content
more useful and can improve your mobile commerce marketing strategy.
 User profiles: It not only provides benefits to you but also your
customers. Based on it, you can personalize the customer experience,
increase sales, and boost customers’ loyalty as well.
 Social media integration: Social media is a huge source of potential
customers. Therefore, you should not ignore the integration of popular
platforms like Facebook or Instagram into your app.
  Customer loyalty program: This is an effective way for you to take care
of your longtime customers. They tend to benefit the business more than
new ones by spending more money on each order and are also willing to
introduce your brand to those around them.
 Lots of mobile commerce payment methods: As we said, limited payment
options can lead to payment delays for some customers for a period of
time and even forever.
 Speedy checkout process: The payment process taking place in just a few
seconds on mobile devices will bring a surprisingly high conversion rate.
 App analytics: Customers are always changing. As a result, your app will
also need to be continuously improved through app analytics to keep up
with them and meet their needs.

Mobile commerce payment methods

Mobile wallets

You’ve probably heard of this concept before. It is a digital version of a regular

wallet that anyone uses to store cash and coins. It will be connected to your
bank account for you to top up or use in a way that doesn’t require money in
your bank account, for example, using cash or a phone card to exchange money
into your wallet. When you pay for something, it will deduct money from your
mobile wallet. As such, it minimizes the need to use cash or swipe cards for
users, so it is very convenient.

Popular mobile wallets are PayPal, Amazon Pay, Apple Pay, Google Pay, and
Samsung Pay.
Mobile transfer

Most banks have developed an application specifically for their members to

make it more convenient to transfer money without going to physical
transaction points and even to use a desktop computer. What they need is an
internet-connected smartphone. In addition to banks, some other payment
gateways, such as Paypal or Google, have also soon applied this mobile
commerce technology.

Contactless mobile payments

With this form of payment, customers at the store will not need to swipe a card
or use cash but simply download and install select mobile wallets. They can
then put their smartphone close to a supported terminal at the checkout to
validate and transmit payment. Money will be automatically deducted from
their wallet.

Closed-loop mobile payments

It is similar to mobile wallets, except that it is only used when the customer is
transacting at the store or point of sale of a single brand with which it is
affiliated. To do this, the customer must register an account and provide his/her
information on the dedicated mobile application provided by the brand. Names
that use this mobile commerce technology are Walmart, Starbucks, and Taco
Bell, etc.

Mobile point-of-sale (POS)

If you will need to install a complex and fixed card reader in one place in the
traditional card payment method, the mobile POS uses a mobile card reader,
which is portable. Not only that, but the purchaser only needs their mobile
phone coming with a small attached card reader or contactless card reader.

History of Wireless Communication

The history of the wireless communications started with the understanding of

magnetic and electric properties observed during the early days by the Chinese,
Roman and Greek cultures and experiments carried out in the 17th and 18th
centuries. A short history of wireless communication is presented in the tabular
form:

Yea Description
r

1880 Hertz-Radio Communication

1897 Marconi- Radio Transmission

1933 FCC (Federal Communication Commission)

1938 FCC rules for regular services

1946 Bell telephone laboratories 52 MHz

1956 FCC - 450MHz (Simplex)

1964 Bell telephone active research 800 MHz

1964 FCC - 450 MHz (Full Duplex)

1969 FCC - 40 MHz bandwidth

1981 FCC ? release of cellular land phone in the 40 MHz

1982 At & T divested and Server RBOC (Regional Bell Operation Companies)
formed to manage the cellular operation.

1984 Most RBOC market in operations

1986 FCC allocates 5MHz extended band.

1988 TDMA voted as digital cellular standard in North America.

1992 GSM (Group Special Mobile) operable Germany D2 system.

1993 CDMA (Code Division Multiple Access)

1994 PDCC (Personal Digital Cellular Operable) in Tokyo, Japan

1995 CDMA operable in Hong Kong

1996 Six Broad Band PCS (Personal Communication Services) licensed bands (120
MHz) almost reader 20 billion US dollar

1997 Broad band CDMA constructed and of the 3rd generation mobile.

1999 Powerful WLAN systems were evolved, such as Bluetooth. This uses 2.4 MHz
spectrum.
Generations of Wireless Communication

1G
o This is the first generation of wireless telephone technology, mobile
telecommunications, which was launched in Japan by NTT in 1979.
o The main technological development in this generation that distinguished
the First Generation mobile phones from the previous generation was the
use of multiple cell sites, and the ability to transfer calls from one site to
the next site as the user travelled between cells during a conversation.
o It uses analog signals.
o It allows the voice calls in one country.

Disadvantages
o Poor quality of voice
o Poor life of Battery
o Size of phone was very large
o No security
o Capacity was limited
o Poor handoff reliability
2G
o This is the second generation of mobile telecommunication was launched
in Finland in 1991.
o It was based on GSM standard.
o It enables data transmission like as text messaging (SMS - Short Message
Service), transfer or photos or pictures (MMS ? Multimedia Messaging
Service), but not videos.
o The later versions of this generation, which were called 2.5G using GPRS
(General Packet Radio Service) and 2.75G using EDGE (Enhanced data
rates for GSM Evolution) networks.
o It provides better quality and capacity.

Disadvantages
o Unable to handle complex data such as Video
o Requires strong digital signals
3G
o 3G is the third generation was introduced in early 2000s.
o The transmission of data was increased up to 2Mbits/s, which allows you
to sending or receiving large email messages.
o The main difference between 3G and 2G is the use of packet switching
rather than circuit switching for data transmission.
o Faster communication
o High speed web or more security
o Video conferencing
o 3D gaming
o TV streaming, Mobile TV, phone calls etc. are the features of 3G.

Disadvantages
o Costly
o Requirement of high bandwidth
o Expensive 3G phones
o Size of cell phones was very large.
4G
o 4G is the fourth generation of mobile telecommunication which was
appeared in 2010.
o It was based on LTE (Long Term Evolution) and LTE advanced
standards.
o Offer a range of communication services like video calling, real time
language translation and video voice mail.
o It was capable of providing 100 Mbps to 1Gbps speed.
o High QoS (Quality of Service) and High security.
o The basic term used to describe 4G technology is MAGIC. Where :
M - Mobile multiedia
A - Anytime anywhere
G - Global mobility support
I - Integarted wireless solution
C - Customized personal service

Disadvantages
o Uses more battery
o Difficult to implement
o Expensive equipment are required
5G
o It is refered to fifth generation wireless connection which will be
probably implemented by 2020, or even some years earlier.
o Machine to machine communication can be possible in 5G.
o 5G will be able to performs Internet of Things (IoT) for smart home and
smart city, connected cars etc.
o This generation will be based on lower cost, low battery consumption and
lower latency than 4G equipment.
o There will be much fater transmission rate of data to the previous
versions. Thus the speed of 5G will be 1Gbit/s.

E-Commerce Portal

In international commerce, establishing recognition and awareness is an

important marketing advantage and a reference. Being recognizable in
competitive market conditions is the strategic tool that brings profit and growth.

Kompass system provides;

 corporate identities,
  brands and
 products/services

that can be bring in to the forefront and serves companies effective publicity
alternatives which can increase their recognition and availability across the
world.

With publicity solutions;

 Feature your product visuals, catalogues and your logo.

 Be listed as first in search results.
 Introduce your products and services in 25 languages.
 Increase your visibility with videos.
 Broadcast your latest news and activities.
 Contribute to your web page traffic.
 Measure your visibility of your business and reach real time statistics of
your profile visitors.
What is a Human Resources Information System (HRIS)? An HR
Practitioner’s Guide

A Human Resources Information System (HRIS) is the most used software in

HR. In this article, we will give an overview of what an HRIS is, its main
functionalities, and everything you need to know to have a basic understanding
of the HRIS.

What is an HRIS?

HRIS stands for Human Resources Information System. The HRIS is a system
that is used to collect and store data on an organization’s employees.

In most cases, an HRIS encompasses the basic functionalities needed for end-to-
end Human Resources Management (HRM). It is a system for recruitment,
performance management, learning & development, and more.
 An HRIS is also known as HRIS software. This is a bit confusing as it implies
that different systems can have different software running on them. However,
this is not the case. The HRIS is, in essence, an HR software package.

The HRIS can either run on the company’s own technical infrastructure, or,
more common nowadays, be cloud-based. This means that the HR software is
running outside of the company’s premises, making it much easier to update.

Other commonly used names are HRIS system and HRMS, or Human Resources

Management system. These are all different words for the same thing.
Collectively, these systems are also called Human Capital Management
systems, or HCM. In this article, we will use the terms HRIS and HRIS systems
interchangeably.

sBenefits of an HRIS

As we discuss in our Digital HR Certificate Program, using an HRIS has a

number of clear benefits. That’s why companies of all sizes implement this tool
to support their people operations. Centrally, the HRIS holds employee
information. A wide range of employee data is then easily accessible, in one
system. 

 Record-keeping. An HRIS is a record-keeping system that keeps track of

changes to anything related to employees. The HRIS can be seen as the single
source of truth when it comes to personnel data.

 Compliance. Some data is collected and stored for compliance reasons. This

includes material for the identification of employees in case of theft, fraud, or
other misbehaviors, first contact information in case of accidents, citizens
identification information for the tax office, and expiration dates for
mandatory certification. All this information can be stored in the HRIS. It is
 essential that data is stored safely and securely, in line with GDPR
regulations. 

 Efficiency. Having all this information stored in one place not only benefits
accuracy but also saves time. Some companies still keep a lot of data about
employees as physical paperwork. Finding the right folder, and locating the
right sheet, can take up a lot of staff time. 

 HR strategy. The HRIS permits the tracking of data required to advance the

HR and business strategy. Depending on the priorities of the organization,
different data will be essential to track. This is where the HRIS shines. 

 Self-Service HR. A final benefit is the ability to offer self-service HR to

employees and managers. This enables employees to manage their own
affairs. When done right, the HRIS can offer a good employee experience.
Keep in mind that not all HRIS systems offer this in a user-friendly manner!

Working with an HRIS has multiple benefits for the organization, HR, and the
employee. Using an HRIS becomes interesting when you have between 30 to 50
employees.

At this time, managing this basic information in Excel becomes cumbersome

and simple procedures like approving employee holidays need to be
standardized.

Using an HRIS is especially beneficial for large organizations which typically

use more advanced HRIS systems to support different HR functions. Small
businesses would suit a more basic HRIS.

HRIS functions

There are different kinds of HRIS systems and software. Because an HRIS
encompasses all the functionalities for HR, all separate functionalities are part
of the system. These functionalities include:
 Applicant Tracking System (ATS). This software handles all the company’s
recruiting needs. It tracks candidate information and resumes, enables
recruiters to match job openings to suitable candidates from the company’s
application pool, and helps in guiding the hiring process.

 Payroll. Payroll automates the pay process of employees. Contractual data

and information on new hires is often entered into this system – sometimes
combined with time & attendance data – and at the end of the month,
payments orders are created.

 Benefits administration. Another functionality of the HRIS is benefits

management. Employee benefits are an important aspect of compensation and
are also managed in this system. More advanced systems offer an employee
self-service model for employee benefits. In this case, employees can select
the benefits they are looking for themselves. One may want more paternity
leave, the other one a more expensive company car. This self-service
approach to benefits is also called a cafeteria model.
 Time & Attendance. This module gathers time and attendance data from
employees. These are especially relevant for shift workers where employees
clock in and out. Back in the day, employees often wrote down their working
hours on a piece of paper. Then, the manager would manually enter the data
into a time tracking system. Based on this data, payment orders were
generated and paid to all employees. Nowadays, workers often check into
work by fingerprint or a card that is synced with an HRIS. This gives an exact
time for arrival and departure. Any issues with lateness are easily detected.

 Training. Learning and development is a key element when it comes to

employee management. This module allows HR to track qualification,
certification, and skills of the employees, as well as an outline of available
courses for company employees. This module is often referred to as an LMS,
or Learning Management System, when it’s a stand-alone. An LMS usually
includes available e-learning and other courses to be followed by employees.
 Performance management. Performance management is a key part of
managing people. Performance ratings are generated once or multiple times a
year by the direct manager or peers of the employee.

 Succession planning. Creating a talent pipeline and having replacements

available for key roles in the organization is another key component of an
HRIS.

 Employee self-service. Employee self-service has already been mentioned.

Organizations are focusing increasingly on having employees and their direct
supervisors manage their own data. Requests like holidays can be asked for
by the employee him/herself. After approval, these are then immediately
saved into the system (and registered to track for payroll and benefits
purposes).

 Reporting & Analytics. A much rarer module in HRIS systems is reporting

and analytics. Modern systems enable the creation of automated HR
reports on various topics like employee turnover, absence, performance, and
more. Analytics involves the analysis of these insights for better-informed
decision making. We’ll explain more about this in the section below.

Reporting and analytics in an HRIS

The common characteristic for all HRIS systems is that they have been designed
as transactional systems. They are databases that record a company’s
transactions. An example of a transaction is when new employees join the
company.

A new employee record is entered, and the person is considered ‘active’. If a

person leaves the company three months later, a new transaction is recorded,
setting the person’s status to ‘terminated’.
The fact that these systems are designed as transactional systems, makes them
bad at data reporting and analytics. They simply haven’t been designed for this.
In addition, not all HRIS systems have all the above capabilities built-in.

Some functionalities, like payroll, LMS, or ATS could also be recorded in

external systems. This makes HR reporting even more challenging, as it means
that data is dispersed into multiple systems. In order to report data, a new layer
needs to be added on top of all HR systems to report and analyze the HR data.

This is the second reason why the practical use of reporting and analytics for
these systems is limited. Be aware of this when you are talking to HRIS
providers, as they often tout their systems to be excellent in data reporting and
analytics.

HRIS suppliers

The HRIS software market is fiercely competitive; there are thousands of HRIS
suppliers to choose from. Gartner’s Magic Quadrant below lists the best-known
Human Capital Management suits for 1,000+ employee enterprises. These
include Workday, Oracle, SAP, ADP, Ceridian, Kronos, and more. Listing all
the HRIS suppliers or declaring the best HRIS, would be impossible.
It can’t be generalized as the best HRIS for your company depends on the
specific needs of an organization. These five HCMs are widely considered to be
leaders: