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The terms human resources information system (HRIS), human resources management system (HRMS), and human capital management (HCM) are often used interchangeably. However, there are subtle differences between the three due to the progression of more sophisticated technologies. Over time, HRMS and human resources (HR) solutions evolved into a more data-management focused HRIS which then led to today's more complete and strategic, employee-focused HCM.
HRIS is synonymous with connected data management of various HR processes such as benefits, workforce management, payroll, and core HR. As HR teams began to take on additional responsibilities such as talent acquisition and recruitment, the HRIS helped maintain, manage, and process detailed employee information and human-resources–related policies and procedures. The most sophisticated HRISs are interactive systems of information management, standardizing HR tasks and processes while facilitating accurate recordkeeping and reporting. The HRIS offers more efficient interactions between employees and the companies they work for and frees HR professionals to perform more strategic, high-value work. Many people still use the term HRIS today.
HRMS expanded on the HRIS to offer a more complete suite of software that organizations could use to manage internal HR functions. HRMS was used by analysts as the term to describe HR software suites during the early 2000s when on-premises systems were the primary type of software used. From employee data management to payroll, recruitment, benefits, training, talent management, employee engagement, and employee attendance, an HRMS helped HR professionals manage a more modern workforce and put information about a company’s most valuable assets in front of the people who needed it. Although people still use the term HRMS to describe systems that are now hosted in the cloud, this term is not used as widely when referring to natively built cloud applications. The terms HRMS and HCM are still interchangeable and you will find information on both if you do a web search.
HCM is now commonly used to describe a complete suite of HR applications, built in the cloud, that are designed to improve the employee experience. It was used in the pre-cloud era as well, however a clear transition of analysts referring to the space as HCM continues to help this term gain traction with customers and vendors. An HCM solution today often incorporates digital assistants, AI, and other tools that enable users to collaborate and share information across teams. Additional functionality includes advanced talent management tasks such as performance management, learning, succession planning, and compensation planning. In addition, business planning capabilities are included such as strategic workforce planning and workforce modeling. HCM covers the range of HR functions, whether they are data-based, transactional, or strategic. It transforms the traditional administrative functions of human resources departments—recruiting, training, payroll, compensation, and performance management—into opportunities to drive engagement, productivity, and business value. HCM considers the workforce as more than just a cost of doing business; it is a core business asset whose value can be maximized through strategic investment and management—just like any other asset.