vendor management – Workforce

For organizations to choose the right workforce technology partners for their unique needs, the process isn’t quick and simple.

Workforce experts explained the steps organizations can take to choose the best option for themselves.

Also read: How technology can help your employee engagement strategy

Taking the initial steps to finding your workforce technology partner

To find the right workforce technology partners, the first step organizations must take is to define and identify their business requirements, said Karen Piercy, a partner in Mercer’s Philadelphia office. Also, they should define what the key user experience requirements are:

How will users interact with it?
Is it mobile enough?
Will HR be able to adapt to it?

Another important factor is to consider the organization’s unique needs. When a company puts together its extensive list of requirements, generally speaking the large vendor solutions will already cover around 80 percent of them, Piercy said. Rather than focusing too much on these standard requirements, companies should spend more time considering their unique needs for their business and situation.

“Carve out the critical things that are somewhat different and figure out how each solution will meet those needs. That will really help separate the marketplace,” she said.

Another area to consider is the service and support aspect of the vendor solution, she added. How does the vendor work with the organization on an ongoing basis after the partnership has been made? How do they handle problems, and how much do they let customers be involved in new technology or new functionalities that they’re in need of?

Consider your unique needs

Enterprises should go after partners that can accelerate their business goals, said Chris Bruce, co-founder and managing director of Thomsons Online Benefits.

According to Thomsons’ research, 49 percent of organizations with fully centralized HR operations exceed their employee engagement targets. Meanwhile, only 33 percent of firms that have not fully centralized their HR operations have seen the same result.

“By working with partners that can help businesses meet or exceed their goals, whatever they may be, they will be better positioned to thrive,” Bruce said.

Common software customer concerns

Most HR professionals are not intimately familiar with all the HR solutions available, Piercy said. There’s a lot of ongoing change in the marketplace including mergers, acquisitions and new technologies, and HR needs someone who understands what’s going on in the industry.

Experts can help HR prioritize how they’ll evaluate vendors on everything from functionalities and features to user experience, she said.

“Companies often list a whole lot of requirements, and consultants know that 80 percent of them are standard functionality. So we don’t need to focus as much on that. It’s finding that 20 percent that are the things that not all technologies do well or that they might do very differently,” she added. “That role in helping pull out that 20 percent is very valuable, and helping them prioritize how they’ll evaluate the vendor.”

Questions for companies to consider include: What’s important to me? Is it mostly about user experience? Is it mostly about features and functionality? What’s the balance between these things for me? From there, these experts can help evaluate what vendors meet these needs and this balance the best.

While this is a best practice, many companies do not make decisions this way. The Workforce Business Intelligence Board’s “2020 HR State of the Industry Survey,” developed by Workforce.com’s research team, asked 809 survey respondents what their top three most important factors are for choosing a workforce management technology vendor. Unsurprisingly, 32.5 percent of respondents put “cost” in their top three. On the other hand, only 19.4 percent chose “ability to customize for our business needs.”

Experts can also help organizations compare costs for different vendors, Piercy said. Each vendor prices differently, which makes apple-to-apple comparisons more difficult, and certain experts can peel back these pricing models for the closest cost comparison possible.

The longevity of the selection process

Organizations should expect the vendor selection process to take at least two to three months, Piercy said. “You don’t want to short-cut a lot of that process,” she said. “Also, once you’ve picked the technology, you need an implementation partner, so there’s another round of selection right there.”

She advises that organizations start looking six months in advance and stay on task.

A lot of organizations know how early they need to start, but where they falter is they start to lag after that initial start date, she said. Then suddenly they realize they’re going to have to rush the process in order to get everything done on time.

Consider total cost of ownership

Once you have decided on the top vendor choices, that next step is to build the business case for leadership.

While getting that apples-to-apples cost comparison is important, leadership needs more cost information before they make the vendor selection. They also want the total cost of ownership of the technology, Piercy said.

“Leadership is going to need to know the total cost of owning the technology. What’s the business case or ROI involved in that?”

Employee demand for consumer-like experiences, the increasing use of people analytics and the falling costs of hardware and software are dramatically driving the spread of HR technology. By 2025, the HR management systems market is expected to grow to $30 billion, more than doubling the $12.6 billion recorded in 2016, according to Grand View Research.

Faced with a mind-boggling array of solutions, encompassing everything from full talent-management suites to narrowly focused products that measure components of employee engagement, both technology vendors and customers are thinking more and more about “harmonization.”

In HR technology-speak, harmonization is the knitting together of products so users benefit from a single experience, as well as a data set that cuts across organizational and technical silos. The idea “is definitely something that’s become more prevalent,” said Jeremy Ames, president of Hive Tech HR, a Massachusetts-based HR technology consultant.

Ames believes it’s difficult for organizations to be served by one platform that does everything. At the same time, systems that aren’t properly connected will leave gaps in information and processes. Employers that aren’t careful are “going to have so many disjointed processes and experiences that it becomes a mess and a maintenance nightmare,” he said.

According to research by engagement platform provider Reward Gateway, 87 percent of HR professionals either want or are pursuing ways to integrate new tools into their existing ecosystem. Harmonization, said Will Tracz, the company’s chief technical architect, is about efficiency and creating a seamless employee journey.

“If you consider it from an IT perspective, there’s great pressure within organizations to save time and streamline,” he said. “You’ve got different systems at different parts of the journey, from an applicant tracking system that candidates come into, through to onboarding, to setting up communications to engage [employees] from platforms that sit alongside.”

First, Don’t Get in the Way

As a result, organizations are hunting for solutions that are effective, efficient and consistent, Tracz said. Most especially, HR doesn’t want to implement systems that get in the way of employees doing their job. Harmonization, Tracz said, is about providing a best-in-class experience while making it easy for HR to “seamlessly work through the life cycle without interrupting the employees’ days.”

Also read: Human Resources Technology Customers Insist on High-Touch Vendors

However, there’s more to harmonization than user experience. The information used by the system to provide self-service, reports and analytics must be brought together in a way that creates what data scientists call “a single source of truth.”

Traditionally, functions across the organization have relied on their own systems to get their work done. That can make analyzing data more difficult and reporting more prone to inconsistencies and errors.

For example, Ames said, dissecting data becomes more complex when 20 percent of it is drawn from the talent acquisition system, 30 percent from the learning management system and the remainder by the performance management platform.

“Sometimes that need to harmonize from a reporting standpoint is where the need to harmonize overall can start,” he said.

Core of Data Governance

That means harmonization is a data-governance issue as well as a technical challenge, said David Ricciardi, president of data strategy and analytics firm Proximo.

On the back end, for example, simple data points like an employee’s email address and contact information must be consistent across systems. On the front end, a single vocabulary should be employed across user interfaces and reports, to the point where it’s even incorporated into PowerPoints presented to the CEO.

“That’s harmonization,” Ricciardi said. “They’re all on the same note. They all mean the exact same thing. They have the same sound, the same pitch.” For that to happen, every data point or term must be compiled into a business glossary, where every meaning is defined and every place it’s used is documented. “It’s a complex effort,” he said.

“Pretty much what you’ve got to do is work with the system of record, and when important events happen, have them synchronize between systems in as close to real time as possible,” Tracz said. In some cases, that may mean a weekly batch file update. In others, it’s enabling one system to reach out to others to let them know changes have been made. In either case, it also means reflecting changes as quickly as possible.

As important as the need for consistency might be, not everyone sees an industrywide wave rolling toward harmonization. A year ago, Ames “felt strongly” that harmonization was gaining momentum because many full-suite vendors weren’t paying close attention to narrower tools. Consequently, customers were tempted to pursue the best of all worlds, which required building mechanisms for different systems to speak to each other.

Today, however, “I think some of the biggest vendors are making more of an effort to make sure they’re not being bypassed,” Ames said. Full-suite vendors are trying to mitigate their risk by building new features themselves or acquiring them.

“There’s always going to be an appetite for both sides of it,” Ames said. “But right now I don’t feel a huge push in one direction or the other.”

Tag: vendor management

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