| By Dave Foxall
HR Software Selection Errors to Avoid
The market for HR management system (HRMS) software is undeniably crowded. From industry giants to new start-ups to vertical market solutions to niche specialists, given the breadth of offerings within this technology space, the choice alone can be overwhelming. Add to that the confusion that countless organizations face about how to select an HRMS software product, and the result is often an overly-complicated and mistake-ridden process. To help companies get a handle on these and other pitfalls, we've outlined our top 7 worst mistakes that companies can make when selecting HR software solutions.
HRMS Software Selection Mistake #1: An overly-detailed selection process
Long-standing tradition for HRMS software selection demands a request for proposal (RFP) containing detailed system requirements; a sifting or pre-qualifying exercise to produce a shortlist of vendors; scripted demos; an objective rating methodology; and finally, a purchase decision. All of this is, of course, good practice (perhaps even best practice), but organizations should be cognizant of the fact that including too many extraneous details in the RFP can have the effect of reducing each vendor's pitch to a lengthy 'box-ticking' exercise; obscuring each system's true benefits (or lack of). Indeed, InformationManagment.com suggests, "It is better to help vendors build a thorough understanding of your situation and goals, and then let them propose a solution based on their product. In addition to getting the vendor's best ideas, this process gives your team a good idea of what the vendor will be like to work with."
HRMS Software Selection Mistake #2: Ignoring evolution
Often organizations focus in so closely on their companies' current requirements that the future needs of the firm are neglected. This pitfall can drastically reduce the useful lifespan of the HR software solution. A future-proofed system is scalable and flexible enough to cope with the expansion and changing needs of the client organization. Furthermore, the right HR application choice will (and should) be able to keep pace with workplace technology trends (e.g. the increasing use and integration of social media tools, mobile devices, human capital analytics and more).
HRMS Software Selection Mistake #3: Failure to calculate the TCO
HR software costs (also known as TCO or total cost of ownership) include more than just the licensing, subscription, and implementation expenditures. In fact, with some HR software vendors, the on-going costs of upgrades, tech support, future training, integration, customization, etc. can significantly outweigh the HRMS application's quoted software price. Organizations need to be attuned to the various other longer-term costs that come into play, including figures associated with the HR application platform, infrastructure, and any/all IT personnel that need to be utilized to effectively operate the given HRMS technology solution. As such, due diligence is required especially when looking at the TCO for on-premise versus hosted versus cloud HRMS solutions.
HRMS Software Selection Mistake #4: Neglecting security
Aside from questions about the HR software vendor's provision and on-going development of security features, the basic issue of where data will be stored and how that data's safety will be ensured is continuing to garner significant organizational attention; thanks in large part to the increasing popularity of SaaS (Software-as-a-Service) HRMS options. A recent Ernst & Young report, The Global Information Security Survey, highlights just how complex the situation can be for the uninformed buyer; citing that, "although many people believe that they are purchasing SaaS, it may be from a cloud provider who is using Platform-as-a-Service (PaaS) capabilities from another cloud provider who purchased its infrastructure from an Infrastructure-as-a-Service (IaaS) provider who rents space in a shared data center". Any and all of these possibilities have data security implications of which organizations should be aware. Particularly with SaaS HR solutions, security verifications include vetting the providers Information Security Management System (ISMS) and reviewing annual independent security audits and attestations such as SAS 70 and ISO 27001.
HRMS Software Selection Mistake #5: Lack of executive sponsorship
While a good stakeholder engagement strategy covers all levels of the organization, C-suite executives are particularly important because of their influence over high-profile projects on this scale. A Global Business and Technology Association white paper highlights one consultant's experience when the question of senior engagement was not addressed; referencing that, "We worked together well, did all the right things, but we were sabotaged by the senior executives. They did not follow through on their promises and did not do what they said they would do". This point cannot be stressed enough that senior-level involvement and engagement is critical to the HRMS software selection procedure; without which organizations have little hope to achieving a smooth purchasing process. Make no mistake, staff take non-verbal queues from their managers and executives, and if those executives are not active in supporting the project, nor will the staff be.
HRMS Software Selection Mistake #6: Buying the same system as the competition
Selecting an HR software solution identical to a direct competitor's is no doubt a tempting strategy. After all, competing and peer organizations are in the same industry sector; are dealing with similar clients and suppliers; and it may seem reasonable to expect the software to be a good fit. However, upon closer inspection, superficial similarities such as the age of the organization, corporate culture, HR processes & policies, and geographical location are all factors that create a very different set of HRMS application requirements. A white paper from SoftResources LLC points out exactly why this strategy can net a poor selection outcome. Namely, "First, [this HR software strategy] assumes that industry peers are qualified to make good software selection decisions. Second, it excludes knowledge of how your peers made their selection; what their criterion were; what budget constraints were in place, what users' needs were/are and so on." Essentially, this strategy is ripe for failure due to the fact that it fails to consider each organization's unique requirements and differences.
HRMS Software Selection Mistake #7: Going it alone
While hiring an external HRMS technology consultant is not an organizational imperative, it is undeniable that these contingent workers can bring specific expertise and benefits to the project; including an understanding of the HRMS market; prior HR software implementation experience; product knowledge depth and breadth; and objectivity that can increase credibility with senior stakeholders. As Phenix Management International observe, "The cost of the expert guidance provided by a consultant may well be offset by minimizing the risk of project failure and by realizing the savings to be derived from the system at an earlier date."
The HR Software Selection Bottom Line
As recent work from InformationManagment.com highlights: "Selecting the right software cannot guarantee the success of a project, but picking the wrong system can ensure failure". That said, the process of selecting the best HR software solution for an organization can be both precarious and complex given the array of issues at play and stake. These issues can lead to mistakes, and can ultimately threaten the project's success. Avoiding the above seven mistakes will help ensure the best possible fit between the organization's needs and HRMS software solution.
Categories: HR Software Selection Projects
Tags: Software selection pitfalls
Author: Dave Foxall