Avoiding the Seven Failures That Cause Your HCM System to be Replaced

March 27, 2018

Written by Matt Lafata


I have found that vendors sometimes get an unwarranted bad rap and that people throw out their HCM system without looking at their own role in using the system. I certainly don’t want to say that you won’t ever potentially replace a system, or that the vendor may not be taking the product where you want to go. Sometimes you simply need to switch out a system because of vendor viability issues, no clearly defined roadmap and poor support.

After performing hundreds of HCM evaluation and selection projects for leading organizations of all industries across the globe, our research shows us that the majority of HCM systems are replaced due to customer “failure” – NOT due to vendor viability factors, vendor product roadmap, or poor vendor support. Through this research, we have identified seven of the most common failures and by being aware of what they are, you can create a risk mitigation plan to avoid them.

1. Lack of Support and Staffing – Technology is not a panacea into itself, it is an enabler and an HCM system is an enabling application. You have to step up on client side and ensure you have an internal support system to get value as you basically will get out what you put in. This starts at the implementation stage as you can take a great product and if you don’t implement it correctly, you won’t get any value out of it.

Do you have a system administrator? You should have some type of system administrator internally to properly support your HCM system. Somebody needs to be the person communicating back to the vendor to find out about new releases and other important information – basically provide internal support, revise reports, and tailor the system in other ways. With most of the HCM systems out there today, this is usually a part-time position and could be part of somebody’s job. It could be the same person who is the admin for more than one system.  A perfect background is somebody who understands HCM technology but also somebody who has implemented some kind of system. And once that person is in place, make sure you have a backup in case that person is hit by the proverbial bus.

Do you have a formalized and communicated training plan? The HCM vendor can certainly give you recommendations on which training classes to take. Be sure to train your system admin person and backup. If you don’t have either, hire a contract system admin through a third party consulting firm.

You also need a post implementation budget. Some companies put money in for first phase but keep money for further stuff that you didn’t do in phase 1. Ask for budget before you even start phase 1 and make sure you have budget every year for support and enhancement of the system.

2. Change Management – we all know that your users have changing needs. If you are the system admin or the champion, how are you meeting those needs? Are you fully aware of business requirements? When we look at that, and understand the needs, how do we prioritize the queue of the needs? Our suggestion is some type of governance model for the system. There should be a steering committee, who may meet once a month to discuss priorities in making changes, but you can’t do everything at once and you can’t modify the system for every user request. Sometimes there are simply constraints in the system and by keeping up with the vendor, you will know if it is coming in the product later on. The governance model could include the VP of HR, IT, etc. It’s important to know who needs to be informed of what the company is doing and who you get approval from if you own one module from your HCM vendor and want to buy another. How do you interact or communicate back to IT on your hardware and system needs?

3. Vendor Communication – how do you get your voices heard at the vendor? A good way is to attend user conferences so you can keep informed of the vendor’s roadmap. The vendor wants your input and ideas on how to improve system, how it works outside of ivory tower. If you can’t go to conferences, be sure to stay up with their newsletters about what is going on. You should have a primary contact with the vendor but you may want a relationship with the executive level as well. The vendor wants you to be happy and to be a reference for the sales group. You have an ally in the vendor – use that as leverage.

Springing into that thought – are you a good customer of the vendor? What is a model customer? It is somebody who takes some responsibility for success on the customer side and doesn’t expect that just because they bought something that they will be taken care of. A good customer takes responsibility and admits when they are wrong. They don’t inundate the vendor with needless requests and have reasonable expectations of when they will get back to you. Be a reference for the vendor and let them give out your name to prospects. It’s good for you if more money is going into the vendor as the more people supporting the vendor means they can put more money into development. Offer to write up a case study on your success. Whenever possible, go and speak about the HCM system as not only will you meet some interesting people but it is great PR for your company as well to talk about how successful you have been since implementing the system. Don’t give away all secrets but share, network and speak with the outside world.

4. Absence of Planning – Be proactive and plan – have a written plan of attack. Memorialize your plan as to how you support your HCM system. Set expectations, i.e. if putting in phase 1 and not going to do everything, let people know. Set expectations appropriately. Put in writing as memories are convenient and they change. Plan your work and work your plan.

What defines success? What works well in your industry? You need to have something to measure success of the system. If you survey your users, you may want to survey some candidates (if it is a recruiting system) – what is their satisfaction with system? Part of planning is to have a risk mitigation or contingency plan. What if the system is down? What if the vendor goes out of business? What if you have a merger? What is your preparedness plan to be ready for that? This is stuff that your steering committee should have in place.

5. Failure to Align with Enterprise Strategies – Unless you have every HCM functionality covered, which is unlikely, your HCM system is just a piece of an overall piece of an HCM systems strategic plan. If you are not aware of the HCM systems strategic plan, find out what it is all about. How does your CEO feel about the HCM systems plan? Are you aware of the company’s IT strategic plan? It should be a written document somewhere that covers things like SaaS vs. self-hosted (on-premise), database, network, etc. Be aware of it and how it changes and how it might affect the use of the HCM system.

Do you have a seat at the table with your management? One way is to show them success and metrics about what the system has done for your department and/or organization. Let them know the kind of information you have with the HCM system. Another critical thing is to keep informed with the software market and how your HCM system fits in and competes with others. Somebody could come to you and say they want to switch out with the HCM system module that your ERP vendor offers – you need to be aware of what the strengths of your HCM system vs. them. People have lost their HCM system when somebody fell into ERP politics and for the most part – those are not good stories.

You need to know how to defend your system. Why you use it and what you have gotten out of it. Be confident when addressing with others. Don’t give any excuses not to use it.

What are other projects are going on around the company that affect the HCM system? Watch what is going on with other products because somebody could buy another HCM system without you even knowing about it. Stay informed. When you see other projects going on, get on the steering committee or team so that software selections are not done in silos.

6. Resistance to Best Practices – Network with the customers of your HCM vendor. Compare notes, share tricks and techniques and other uses of the system. If you are wondering about your usage or best practices, benchmark with people in your industry. Every industry is a little different and uses a different set of metrics so if you want to see how you are doing, benchmark in your industry. Learn from what others have done rather than re-inventing the wheel. Borrow ideas. The Internet makes this easier as there is so much great information that you couldn’t find years ago – case studies, benchmarks, great organizations to go to – attend industry conferences. There are great seminars, webinars, and forums to learn and share ideas. If you see an idea, come back and use the HCM system as an enabler to implement the idea.

7. Poor Internal “Sales” of the System – selling your HCM system is important. I touched on some of these but toot your own horn as things are going well, and your HCM system is helping. Celebrate successes. Go to HR meetings with the rest of HR and keep everybody informed. Let people know about how well the HCM system is doing. If somebody is having trouble, have them come to you. Never assume that something can’t be done. If you don’t know the answers, call your HCM vendor or call a third party consultant to get some answers.

You should take charge where possible, and set the example for the rest of company. Don’t just react but lead. This is what will get you that seat at the management table. Jack Welch wrote about this in his books. Continue to survey people, measure, compare and always look for improvement. Be a speaker, write an article, share your metrics and analytics with others. Bottom line – keep selling, admit your failures, admit mistakes but don’t give the HCM vendor a bad rap. Some political faction within your company may be pushing you in a different direction when all they hear is you complaining about the system. You want people to perceive system as a positive.

As a final note, HRchitect can function as your system administrator, saving you on the cost of hiring and potentially replacing employees to perform this function. In addition, if you are looking for a new HCM system of any kind, please do yourself a favor and have a conversation with HRchitect before investing ANY time or money in your search. We can save you a lot of time, money and heartache.

About Matt Lafata

Matt Lafata

Matt has over 25 years in the HR technology industry and has been with HRchitect since 2004. He currently serves as President and CEO. Read more about Matt here.