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.
The plethora of choice in the HR technology market today makes system selection a point of fantastic potential, but difficult and daunting too. In the opening article to this series, I looked at creating a relevant, realistic and real case for change. Business case beside you, the exciting part is the approach to market.
In this article I examine the options available and highlight some of the key considerations in selection. I explain for you about the right choice thinking; next time I will look at the practical steps of the right choice process.
Choice is a luxury as a client and it’s a challenge. It means making the right decisions based on the right questions. Much of your up-front investment in the selection process is about framing those questions in the context of your own organisation.
A marketplace: where do you fit in?
Each year I smile as reviews of the technology market note the degree of disruption and change.
We need to expect that change to be at a pace your own experience cannot keep up with. In the selection process, that means approaching the market with open questions rather than too clear an idea about what you envisage.
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Size used to matter enormously. Experts typified the HR technology market as distinctly tiered.
Large companies could afford access to ‘enterprise’ solutions from the global giants of people technology. SMB’s picked off the shelf low-cost options with limited configurability, more recently cloud-based and with the self-service and mobile offer.
In the UK, the mid-market ‘tier’ targeted a limited range of products at employers of, perhaps 500 to 10,000 employees.
This is no longer where we are at.
It is still useful to start with this 3-tier framework in mind. Simply bear in mind that boundaries are less clear these days. Large HR system providers now offer scaled-down options, accessible to the ‘mid’ organisation and smaller systems are frankly so good that they are worth a look if you are ‘mid’ too. It costs less to offer a better product (cloud helps here!)
Top tip: I counsel against a post on forums such as LinkedIn asking ‘out there’ for recommendations about which system you should buy. Yes, you’ll receive a random collection of genuine experiences, but also a good deal of unwanted sales contact and, more dangerously, non-contextual views that are ill-explained to you. Your own system selection is contextual to your organisation. That is why I’m loathe to make suggestions that refer to specific product choices. Your yellow brick road is someone else’s garden path.
Here is how to understand where you sit in an increasingly complicated market-place for HR systems:
Step 1 – Yes, continue to use your size as your start point. Broadly bracket yourself.
Step 2 - Know what kind of product you want to buy. What would be your Google search term?! I offer some tips on jargon below.
The right scope typically balances benefits of integration and of specialism. Unless you can afford an enterprise solution then look at ‘best-of-breed’ core HR systems. These can integrate payroll. And you can add bolt-on solutions for specific functions, for example recruitment, learning or time-recording. You might want to treat your business intelligence requirement separately (and this can prove a wise move).
Step 3 - Next get to grips with deployment
Distinguish models for (a) technical hosting and (b) licensing and purchase. The first is about IT and the second about procurement. Confusingly, the term ‘SaaS’ is commonly used to cover both and it is always worth clarifying. Buying Software-as-a-Service (SaaS) means, in procurement terms, that you buy a licence over a contract term as opposed to making an outright purchase. This is typically the difference between capital and operational expenditure.
You can host your system ‘on premise’ within your own IT infrastructure or more commonly these days you’ll want it in the cloud. Cloud-computing is the new norm for software hosting services, meaning provision via the internet rather than directly to a server. Public and private clouds, as well as server virtualisation, make this no longer a binary choice. Involve your IT team to understand what you want to look for. Few vendors can’t now offer the cloud option.
Yes, SaaS licensing tends to suggest towards cloud; outright purchase towards on premise solutions, but it does not have to be so. This means that if your IT and Finance leadership tend to pull in different directions on the ‘out there’ versus ‘in here’ choices then there is a likely an answer to suit all.
Remember too that which box your system sits on does not necessarily affect asking outsourced providers for services to help you use it! Managed service plans are a third dimension to the way in which you buy your people technology.
Key question: What do the HR technology providers currently think of you? Have you assessed your strategic strength in the selection process? This is a marketplace. Whilst I wish this were not true, you are an influencer as you go out to make your choice in a balance of supply and demand. It’s worth a thought (and perhaps a bit of current know-how advice) about whether your size and sector is currently hot property. C’est la vie!
Getting to grips with deployment is a great example of what the HR systems industry does with words:
Jargon-busting, smoke and mirrors
Technology is for the HR professional a minefield of magical, mystery terms. The earlier the better de-mystify anything that you are unclear about.
Remember that HR leaders do not need the detailed grasp of technology concepts that is the job of those in IT.
For example, I struggle with public and private cloud, getting rather lost in hybrid options.
Deal with this by aiming for questions that ask about impact: what does that mean for me? How does that affect me? As with the best of interviewing technique, you’ll want to funnel. Sensible follow-ons ask about cost, service, operability, flexibility, scalability, security, upgrades.
Above we mentioned the ambiguity around SaaS. Here is more example material for muddle:
Example: Interface and Integrations
Likely your overall systems map will involve the core HR system talking to payroll or other technologies using interfaces. To interface can imply a full API (application programming interface), achieving a direct technical link between systems. Others may say ‘interface’ asking for Excel spreadsheet upload for now. Ask about the options in between.
Example: Features and Functions
In this case it’s a grammatical difference and I think a red herring. Features are things a product has; functions are things a product does. For example, whether we talk about a configurable workflow tool as a feature (the tech has it) or the functional ability to send users pre-configured alerts (the tech does it) matters not.
Don’t be blinded by science – whether the science of the IT or sales professions or the purists of the English language.
Tip: There are assumptions that accompany the technical terms. Take cloud and security. Is the cloud inherently more or less secure? I have come across both HR and IT professionals who regard cloud-based technology as attracting greater cyber security risk. Others take the opposite view. Be wary of assumptions.
Considerations of choice
So far we’ve appreciated the overall landscape of HR systems and how to make sure you have your ears and eyes open. Now you will need to begin a considered method of gathering and weighting factors upon which to build your short-list.
Which factors should you take into account?
One nice and simple suggestion is to think about questions about you and where you’re at, questions about the product, questions about the supplier.
- About you factors include: your size, sector and geography, as well as your organisational culture. Consider with culture too, the organisation’s attitude to technologies and the appetite for risk
- About where you’re at factors include: the status quo with HR systems currently, key milestone dates, organisational priorities, in-house skills and capabilities. What does the future hold for you?
- About product factors look at both breadth and depth of the scope of benefit you want to achieve: modules, HR functions and modules on offer, integration potential, configurability, self-service and mobile option, the user experience. Return to your business case benefits here.
- About supplier questions include: service and support, the propositions for deployment, licensing and managed service terms, security policy, as well as the company’s reputation and history
Key question: How should you weight factors? Tender documents often include a scoring system and within such scoring there is inevitably scope for your views. Controversially, I’d encourage you to put the product considerations at the outset lower down the ranking. Ever-increasing capabilities we noted above likely outstrip your expectation. Bear in mind which factors are immutable. Separate factors under your control, and separate which supplier-led factors relate to product and which to services. In part 1 I suggested that an overall ROI figure is helpful only so far in your business case for HR technology; I suggest the same for too precise a score on selection factors.
Cost is not on my list of considerations here. That’s because, if you’ve made your business case, you will have identified what you can make good use of.
Proportionate thinking about potential returns and about the overall HR systems market tend to lead you to a cost bracket. With the internal context where no doubt you have your ‘pot’, you have thereby a natural negotiation exercise ahead of you. What you do not have, is any further reason to change at early stages views about which system is the right one for you.
Tip: If you have not yet documented a business case, then do so now. It is never too late. Read here for how. In the system selection stages this will help you describe to the suppliers what you need; later on that case will help you assess whether benefits are being realised.
Step 2 in short!
You’re addressing a massive step. Invest in it.
A key point is that the ‘right’ choice for you (and there may be no right choice!) is almost entirely contextual. That is why I am encouraging you to explore your thinking in system selection rather than giving you a this-year’s ranking of the best systems.
On smaller scales, question whether this could be a ‘good enough’ choice. You might want to choose just because. Because you like it, because you’ve explored it, because it’s ‘good enough’. In a complex project scenario, bear in the mind that unlikely is there one dream solution.
Context and a consideration of factors leads to a short-list. Amongst the short-list, focus on impact between differences. In making a choice, focus on the dealing with the differences.
Next month I’ll look at the process of system selection and how to navigate your way through practical steps to make a purchase.
Take 1 Step on Step 2!
Having checked your facts (see part 1), then decide on your source(s) of overview and objectivity. Finding objectivity is surprisingly hard. Some practical suggestions are:
- Read at a generic level. Try the independent HR press and some product vendors do offer helpful blog features
- Find a system selection expert consultant – invest, if your budget and scale warrant
- Attend an HR technology showcase event. I recommend the CIPD software show, where the take-away exhibition guide gives you a starting long-list of products
- Try out an online software product selector tool – these serve as a basic filter. Note most are designed for the US market
- Talk. Find relevant reviewers amongst your peer and sector group. Will they show you their own system?
Kate is Service Delivery Director for Phase 3 Consulting, offering an independent take on the UK HR Systems Market. Her passion is for bridging the gap between technology and people at work and translating for HR professionals the language of HR systems. Her career was spent in private and public sector HR generalist management before she moved into consultancy. In her writing and her day-to- day work, Kate explains how to work well with technology and technology projects in an HR leadership role, using simple techniques drawn from HR experience, project management, business psychology and analogy with everyday life.