Who’s who in the zoo when selecting HR systems

Over the past few years the process by which HR systems have been selected has changed.
The process has moved away from a deep technical requirements driven a proposal process to one whereby potential vendors are invited to demonstrate how their system meets the user experience requirements of the business through critical customer journeys or high impact use cases, reviewed and scored by not just key decision makers in the process, but quite often actual future end users of the system.

The HR technology market is changing

We would be remiss if we did not mention that the systems that are being selected for and by HR have changed significantly and continue to evolve dramatically. We are seeing changes in the way we work and the way organisations manage their workforce, which have resulted in new breeds of technology, not just limited to the now ‘traditional’ cloud HCM systems such as Workday, SAP Success Factors and Oracle Cloud HCM. More and more organisations are looking to shift the focus on delivering a unified digital experience for employees, thereby being able to opt for multiple fit-for-purpose or best of breed solutions with a wrap-around UI layer delivering the desired experience to employees. This has ramifications on the type, size and nature of systems being offered for HR.

This change in the landscape and the process of evaluating systems for their appropriateness has moved the focus to look at assessing vendors against criteria such as strategic vendor fit, user functionality, technical performance and integration, and commerciality. Organisation place different levels of importance on each of these criteria based on their needs.

Who is selecting the system(s), and for whom?

Interestingly, different parts of the organisation approach the question of future HR systems from entirely different perspectives. Selecting a system or a range of systems for HR often involves three stakeholders: HR, IT and Finance; and they are not always addressing the same question.

If we look at each of these in turn, we see a different focus for assessing vendors and often therefore a different outcome in terms of their preferred solution(s). But should the future HR technology solution(s) of a company be dependent on which function leads the selection or controls the purse strings? As we see a greater focus on the employee experience and bringing the external consumer experience in to the organisation is it not important that each opinion is understood but that the outcome for the user i.e. the employees, is the greatest focus?

  1. The CHRO
    Most CHROs are now looking at their HR systems as enablers of an employee experience that deliver for the employee a consumer level experience of interacting with the company and facilitate people leaders to engage their workforce. Therefore, the selection process for the HR team is fully focused on how the different personas that define the customer base engage with the system and are able to deliver their activities. HR want to understand the mobile functionality, the usability of the system and minimise the amount of workflow that is required for a process to be completed.This is not about HR wanting to procure the shiniest, brightest tool that the salesman can sell to them. In our experience they are savvier than the average consumer but they do want usability, they want simplicity and they want an intuitive solution.

    At the same time, in this pursuit of experience, HR may look at having multiple systems in an integrated landscape, but do they appreciate the hidden costs, complications and effort in maintaining multiple systems as the business custodians for service delivery?

  2. The CIO
    The CIO, or the IT function in general, tends to fall in to one of two categories: The first kind are all about a single solution and technology across the organisation and therefore are limited in their engagement with an HR solution that does not fit their preferred, and often existing, architecture or is easily integrated. The second kind want to build and integrate various systems, reflecting a trend highlighted by Bersin by Deloitte in their thought paper on HR tech disruptions for 2018. A recent example was an organisation whose IT function wanted to procure a series of best of breed point solutions and then integrate each of them.This of course is oversimplifying the IT function and its approach to selection but the point is that it often approaches from a strictly technical standpoint and often the business support capabilities are overlooked or underplayed. Another feature often overlooked is the changing nature of the support models and the cost to support systems. The changing HR tech landscape is likely to reduce the need and cost for IT to provide technical support with new, alternate support models taking over.
  3. The CFO
    Who doesn’t love talking to the CFO or the Finance function about spending money on an internal system? Some of the most progressive organisations that we have worked with have had Finance functions that will look at the spend of an HR system in the scheme of their business. For example, oil companies have looked at the cost of implementing an HR system compared to stopping production on a rig for an hour, or a utility company turning off a power plant for the same amount of time. In big companies the cost of a HR system pales in to insignificance compared to running the business. This may not be the case with CFOs of other organisations. However, a solid benefits case is likely to get a HR system over the line with Finance.On the other hand, CFOs are likely to have a tougher time agreeing to the concept of licensing and maintaining multiple systems in the pursuit of a not-so-easily-quantifiable-in-hard-dollars employee experience, as this approach is invariably going to be more expensive than having a single consolidated system. This is an important consideration when developing a business case for delivering the digital employee experience – tagging realistic dollar values to make a tangible benefits realisation case is more likely to get a favourable response.
Looking beyond that loaded question that dwarfs all else – “what’s the cheapest deal I can get?”

The reality is that there are many businesses that are still driven by the ultimate cost. Companies can go through a full selection process, define the best partner based on a variety of selection criteria and then decide on a different vendor based on price. If that was always going to be the approach, why bother with the selection approach? Imagine the optics of it and the message it sends to the business and end users who would’ve gone through an extensive exercise scoring and indicating their preference, only for some other system(s) to be selected based on price or tech architecture; good luck trying to get business adoption for that deployment.

We now know that various parties are going to approach selection in a different way and it is a good ‘check and balance’ for the organisation. However, it is important that all the stakeholders are engaged early, input to the selection approach and are clear on critical selection points. The leading organisations are engaging the business to help select the system vendor(s), inviting them in to the demonstrations. They are also getting buy in on the importance of the criteria and ensuring everyone is clear on how these are scored, thereby promoting transparency and clarity of decisions.

It is an exciting time for many organisations as they look to refresh their HR technology. As the approach to selection has changed, the key stakeholders need to come together to promote the best solution for the organisation strategically, commercially, technically and experientially, and not one that fits the agenda of a handful of corporate stakeholders.

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