Introduction
HRIS are becoming central to organizations that wish to automate the HR processes, enhance decision making as well as accuracy in the data. Nonetheless, most of the Sri Lankan Small and Medium Enterprises (SMEs) are not able to implement HRIS successfully because of cost, culture and capacity reasons. The Federation of Information Technology Industry Sri Lanka (FITIS, 2024) reported that more than 60 percent of SMEs who start to transform to digital HR give up during the midway. This brings up an important question, which is why do the number of Sri Lankan businesses that are data-driven organizations remain quite low?
Discussion
Financial limitation is one of the major obstacles. SMEs do not always have enough budgets to invest in more modern HR software or they cannot afford specialists to implement, often (Ariyawansa & Gunawardena, 2023). Most of them utilize free or old-fashioned solutions, which are not highly integrated with payroll, performance, and recruitment solutions. Moreover, the HRIS failure is also caused by cultural resistance among management teams. Leaders used to manual HR practices look at the digital transformation as another burden to bear, which is a symptom of technological illiteracy (Perera and Wickramasinghe, 2022).
Change management and training are also important. Without proper training to the users, HRIS is perceived by the staff as more complicated than empowering. Dessler (2023) also states that the organisational culture should have an adaptive nature that promotes experimentation and constant improvement in order to effectively digitalize HR. The inadequate HR planning and employee participation in the adoption process in the SME setting significantly contributes to the low utilisation rates in the purchase of systems in Sri Lanka.
Moreover, there are no government incentives and standardisation frameworks to restrict progress. It is true that such cloud-based HR tools have been embraced by larger corporations in Colombo; however, regional SMEs have not been adopting such tools because of poor infrastructure and a lack of understanding of the advantages of data-driven HR practices.
Conclusion
The adoption of the HRIS among the Sri Lankan SMEs has failed not merely because of the technology but rather it is a question of HR leadership. The digital transformation needs to be planned and budgeted financially, trained and realigned culturally. The government and HR institutions need to bridge the gap by offering capacity-building processes, digital literacy, and tax incentives on investment of HR technology by SMEs. It is not optional anymore, when it comes to becoming data-driven: it is the cornerstone of the contemporary HR efficiency.
References
Ariyawansa, A. and Gunawardena, S. (2023) ‘Challenges in Implementing HRIS in Sri Lankan SMEs,’ South Asian Journal of Human Resource Management, 10(1), pp. 32–46.
Dessler, G. (2023) Human Resource Management. 17th edn. Harlow: Pearson Education.
FITIS (2024) Digital Transformation Readiness Report: Sri Lanka SME Sector. Colombo: Federation of Information Technology Industry Sri Lanka.
Perera, T. and Wickramasinghe, V. (2022) ‘Technology Adoption Barriers in HRM: Evidence from Sri Lankan Enterprises,’ Journal of Business Research in Emerging Economies, 8(4), pp. 112–127.
This is a very good blog topic, It highlights the real challenges Sri Lankan SMEs face in implementing HRIS and becoming data-driven. Understanding these issues is key to improving HR efficiency and digital transformation
ReplyDeleteThank you, Charundya! I'm glad the piece highlighted the real challenges Sri Lankan SMEs face in adopting HRIS. As you noted, shifting to a data-driven approach is absolutely critical for improving HR efficiency and achieving genuine digital transformation.
DeleteThis analysis clearly illustrates that HR technology adoption in SMEs depends on integrated efforts of management, government incentives, and workforce training rather than on technology alone."
ReplyDeleteThat is an excellent summary, Gihani. Your point that HR technology adoption relies on integrated efforts—involving management, government incentives, and workforce training—rather than technology alone is spot-on. It truly takes a holistic approach to succeed in the SME environment. Thank you for reading and sharing your perspective!
DeleteYour article really highlights the hidden challenges SMEs face with HRIS adoption. I think culture is often underestimated digital transformation isn’t just about technology, it’s about mindset. Without proper change management, even the most advanced HRIS can fail.
ReplyDeleteI wholeheartedly agree with you, Dilmini! You've highlighted the crucial hidden challenge: culture. Digital transformation is certainly about mindset and change management, not just software. Without addressing the cultural shift, even the most advanced HRIS is set up to fail. Thanks for underscoring this vital point!
ReplyDeleteYour blog addresses a very relevant and timely topic—the challenges SMEs in Sri Lanka face when implementing HRIS. The discussion is clear, structured, and well-supported with references. It effectively highlights not just technological issues, but also organizational, cultural, and infrastructural barriers. The blog demonstrates strong awareness of the Sri Lankan business context.
ReplyDeleteI appreciate you highlighting the organizational, cultural, and infrastructural barriers alongside the technical ones—it truly is a multi-faceted issue.
DeleteGood post, Hasala — you made very good points about how cost, culture, and training are big barriers for Sri Lankan SMEs to adopt HRIS. Very insightful.
ReplyDeleteI agree that the investment in proper training and addressing culture/mindset is non-negotiable for success.
DeleteAs someone working in hospitality, I see firsthand how the lack of proper HRIS adoption affects both staff and guest experience. In hotels, where payroll accuracy, seasonal recruitment, and performance tracking are critical, relying on outdated manual systems often leads to frustration for employees and delays that ripple into service quality. The article rightly points out that this isn’t just a technology issue—it’s about leadership mindset and culture. If managers continue to see HRIS as a burden rather than a tool to empower people, SMEs will keep struggling. For us in hospitality, digital HR isn’t optional anymore; it’s the backbone of creating dignified workplaces where staff feel valued and guests receive consistent service. What Sri Lankan SMEs need is not just software, but the courage to invest in people through technology
ReplyDeleteRukshan, your firsthand perspective from the hospitality sector is invaluable. You perfectly articulate why digital HR is no longer optional for service SMEs—it truly is the "backbone of creating dignified workplaces" that ensures staff feel valued and guests receive consistent service. Viewing HRIS as a tool to empower people is the mindset shift managers desperately need to make.
DeleteInsightful and timely! HRIS implementation can bring great value, but many SMEs in Sri Lanka face real challenges. This blog highlights key issues and reminds us why proper planning and training are crucial for success
ReplyDeleteI agree that the investment in proper training and addressing culture/mindset is non-negotiable for success.
ReplyDelete