System selection: creating the right process
In our 12-part series, Kate Wadia – Managing Director at Phase 3 Consulting - guides the HR professional through how to navigate, succeed and lead with HR tech project-work. From the inception of the business case to the handover into BAU, we’ll follow an indicative project timeframe to explain the way and the why of a project step-by- step, to give you a full toolkit of practical points, a deciphering of definitions and the top tips to get results important to HR and the wider business.
So far in this series we’ve considered how to put together the business case for HR systems implementation and in part 2 I helped you to understand how complex the choice of solution now is and how hard it is to position yourself in the market.
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This month’s guide aims to make sure the process of selecting HR technology does not derail you from making the right choice. I’ve seen many implementations de-railed on process or, more accurately, on too much worry about process. Unfortunately for most of us, system selection comes up once in blue moon and so we don’t get an opportunity to practice the process.
Here is a practical guide to the steps you’ll need to take to creating a process and getting the most out of it.
What steps are involved in the process of system selection?
Most clients I work with find it helpful to have a clear map of the typical process between identification of the business case (link to part 1) and arriving at a project start (“project initiation”). If you are an experienced project manager, you might find it handy to share an outline with your less-experienced colleagues:
The role you expect to perform in managing the project will afford you more or less choice about precisely how these steps are organised in terms of style, method and depth. The well-known project methodology Prince 2 offers the principle of tailoring to suit your environment. Formality needs to fit. Beware bureaucracy but do justice to the detail where deserved.
It is unlikely that elsewhere you have written out the activities of selection, except against a calendar or project planning tool:
- Pre-Selection and Requirements Analysis – the business case is taken forward into stakeholder discussions and requirements analysis, which is the fullest part of the pre-selection activity. Examine in detail each area of the system scope, aiming to capture in a clear specification. I recommend (see below) (link to ‘Take 1 step on part 3’ below) including a ‘lessons learned’ workshop. Outcomes may be a refined version of the business case with closer scrutiny of costs, benefits and ROI (link to tip on ROI in part 1), as well as a shortlist of product vendors to approach.
TIP: Systems are more commonly over-specified rather than under-specified. Whilst tempting, this can lead to unnecessarily ruling out great solutions or embarking on project plans that flounder in over-ambition. Over-specification encourages salespeople to concentrate on the whizziest features (or future features!). You should think about your aspirations in terms of essentials and desirables, rather like a person specification, to help you structure your thinking.
The Tender Process - tendering is the approach to the market of suppliers. Invitations, replies and countering detail can be formal and I’ll explain in this article how to decide which and what to use.
Larger organisations typically involve a procurement department and with associated guidelines and frameworks to work within to support you through this part of the process.
Product Demonstrations - you will wish to see a showcase demonstration of a handful of different products selected upon examination of responses to your tendering process. Most organisations choose to see between three and five systems. Second rounds are advisable. (Read on for some tips on how to enjoy the excitement of new stuff without falling into the booby traps!)
Decision-making and Due Diligence - there is a short step in between the decision you’d like to reach and informing the sales personnel, but it’s a key one. Due diligence checks include following up references, often with site visits, asking more questions of the supplier company, exploring company background, financials and client-base. There may be more work to be done to confirm options for technical hosting or licensing (for a broad understanding, look back to part 2)
TIP: Whilst it’s ideal to get expert and objective help with the full system selection process, if your budget is limited then spend wisely. Pre-selection requirements analysis and contract negotiation are the stretches of this selection road-map where the greatest specialist knowledge add most leverage in the least consultancy time. Consider using the same person to help you out later on with scoping too at project start – this needs to join up.
Contract Negotiations - work with a legal adviser or someone expert in handling the substance of technology contracts to agree on precise terms. Familiarity of your own context should allow you to judge how extensive this process is likely to be as a time-factor but do – right now – take a moment to consider quite how influential a step this is! (I will look at some of the grey areas in the next article).
Project Initiation – off the back of happy agreements, project teams are put in place and there is a start to the project. Expect this to begin with a “kick-off” meeting.
KEY QUESTION: How long will the selection process take? How much time should I invest? Put this on the agenda for your exercise in ‘lessons learned’, because timescales are much determined by your own organisational habit, structure and the associated complexity of project. In my experience, selection itself takes between two and four months. Subsequent implementation, by comparison, may well span 12-18 months but if all parties share a greater agility, then you could be live with an integrated HR and payroll system within as little as 2-3 months from the point of contract. Don’t hold me to it – much about timescales is within your gift to control! Consultants tend to plan on spending between 10 and 20 days to steer a client organisation through selection work. But note my tip above if funds are hard to find.
Handling the Tender Process
For HR, tendering can be tough due to technical complexity and unfamiliar processes.
What is the role of procurement? If available, then procurement professionals will help you prepare documentation for tenders, keep to purchasing strategies, budgets and legal requirements and (later) to draw up contracts. A procurement framework agreement may make it easier to ensure compliance by suppliers.
Procurement structures can feel restrictive, but they are designed to help. Ask for a brief from that department so that you can work out together from the outset how to benefit from the safety, the groundwork and the expertise without restricting choice.
If you need to manage tendering directly, then the choices are yours about how to tender. Be pleased with this choice! There is no need to be bamboozled by the business-speak of tender terminology….
The key point is to convey your requirements to potential suppliers as accurately as possible and to help those organisations to present accurately by reply. Do not confuse accuracy with length and detail. A traditional tendering process can include extensive documentation – but question the value of lengthy tick-lists. Instead you could aim to draw out the points of differentiation between your specification and others’.
For example, whether a payroll system is complaint with current HMRC rules can be checked on the HMRC website. Instead explain the need for accommodation of a particularly complex pay element or a business process for authorising pay change that is atypical.
Key question: How do you know which type of tender process format and documentation to use?
Phrases used can be confusing. Here is some deciphering:
- Request for Information (RFI) – is an initial ask for information to find out more about your requirements before you make a more formal request.
- Expression of Interest (EOI) – gives potential suppliers notice that you’d like to hear from them. You could also achieve the same as part of an RFI.
- Invitation to Tender (ITT) – in HR technology is perhaps the acronym most commonly used. An ITT is a documentation of requirements that is detailed and specific.
For your central market enquiry, you could otherwise use:
Request for Proposal/Tender/Quotation (RFP/RFT/RFQ) – the formal stage of market enquiry. Nearly interchangeable, choose “quotation” for simple price enquiries, “tender” for specified but complex projects and “proposal” where there are different kinds of solutions to address a business need, rather than a clear solution.
You do not need to work with any of these terms if you do not wish to do so!
Familiarise yourself with these phrases, particularly as others will use them. But have confidence that terminology doesn’t greatly matter. The essence of tender is an ask and a reply, a to-and-fro of information sharing.
Why not send a ‘Supplier Invitation’ and ask for a ‘Reply to Invitation’ and then ‘Project Proposal and Quotation’? These are my words and they aim to avoid the ambiguities of the above. It is helpful to potential suppliers to provide a written guidance note about the process you expect of them, giving contact details, next steps, dates and deadlines. If you want to work with a certain format, then say so.
Product Demonstrations: to be seen, to be believed?
You will be asking those shortlisted to visit you (or sometimes attend remotely) to provide a full demonstration of their product. After tedious documentation, introductions and admin this tends to be something of a high-five high-point in system selection processes. It’s a lot of fun to see the aspirations you have for your HR vision come to life and screen in front of you!
But you should be wary of product demonstrations. Not without reason is the concept referred to as a ‘beauty parade’. Bear in mind:
- Sales personnel are more likely to show you what is great about the product and less likely to fill in the gaps
- Those representatives are not the same technicians who will be responsible for your project initiation or post-sales support
- You are seeing a test system which is especially built and carefully set up to look good. I have even heard of a case where demonstrators have used a slide show of what a product should look like, rather than logging in to any system at all. Ask how much was pre-configured to show you what you are seeing
- Be extra wary when future developments on the product roadmap are relied upon
In the representations made to you, understand why things are sold as recommendations or benefits, and whether therefore stuff matters to you.
How can you get the best out of product demonstrations?
- Prepare. Send in advance some specific, differentiating functions or processes that you wish to see modelled as you’ll require them.
- Help the sales people to help you! There is no point in making this too tough a test. Offer information in your supplier invitations about the context for your project. In the session, steer them back on course if they are not showing you what you’d ideally like to see.
- Invite a manageable number of people to attend. Too many and you won’t achieve the full agenda; too few and you are unlikely to have representation broad enough to cover the different concerns (don’t miss out the senior stakeholder, an IT representative and an end-user)
- Manage your own excitement and that of your team. Stick to an agenda, take notes and have in mind a second round
- Enjoy this part of the process. And see the sizzle for the steak!
Key question: Is HR system selection an art or a science? Experience teaches me that project teams in practice reach verdicts based on something beyond a purely analytical assessment against the requirements. It is proven that decision-making is a complex interplay between the rational and the emotional. This means paying attention not only to the ‘art’ of managing the process (plenty tips through this series!) but to the emotional resonance of the project issues themselves that are in scope. Encourage those insistent or resistant to understand earlier rather than later that things will make a difference to them. It is easy with HR technology to care too late in the day.
Step 3 in short!
We concluded last time that making the ‘right’ choice is something that is contextual and therefore can’t be done for you; by contrast managing the selection process is a question that can clutter the key thinking you need to do about those choices. Process should be a facilitator of the right choices. Here it is no more than a structure of asking, hearing and deciding.
In setting out your requirements you do not need all the answers, but you do need to know which questions to put. Selection is about mutual information-sharing.
Make sure you are confident on both the art and the science of a simple set of steps that will take you from business case to project initiation. A key point is that you and your organisation are in charge.
Next time I will help you with your homework to get set for a successful ‘kick-off’, forewarned, forearmed and future-proofed in early project stages.
Do ONE thing on Step 3...
Arrange a “lessons learned” workshop. It is rarely done, but easy to do and both rewarding and valuable. Getting internal stakeholders together to review previous HR system projects (and ideally include projects carried out in other parts of the organisation too) is a great way to engage team members from early days, as well as deriving useful insights and evidence from history. You may well be able to start making very practical plans for the weeks ahead – for example in looking at your project management method or the resourcing allocation you can give.
How? Decide who you want to involve and get everyone in a room together, having shared the aim of the session in advance. Make sure the group has a chair person to keep discussion on track. Keep notes on points of consensus and those contested so that there are clear outcomes. You can go grander, but it’s as simple as that to be effective.
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Kate Wadia (1977 – 2019) was Managing Director at Phase 3, the independent specialists in people technology consulting and was instrumental in helping grow the company to the position they are in today.
Her passion was to bridge the gap between technology and people at work, translating for HR professionals the language of HR systems and...