Written by: Matt Lafata
HRchitect has been involved in approximately 2000 HR technology related projects for hundreds of companies of all sizes and industries across the world. We have gained tremendous insight (and continue to every single day) and feel an obligation to share our expertise, and our war stories, with you. After all, with 18 years in business behind us in working with many of today’s leading companies, we’ve gained a unique perspective on the very puzzling world of HR technology.
We’ve touched on how critical decision drivers are in selecting or replacing an HCM system. We’ve also talked about the rationale and benefits behind all of this. We’ve even touched on a handful of decision drivers themselves. Now let’s define some additional decision drivers.
Technology & Scalability—often a ‘knockout’ criteria (e.g., a vendor not able to satisfy the client standard is eliminated from further consideration), this item examines overall fit with the organization’s tech standards/conventions, and also assesses the strengths/ qualities of vendor’s technology strategy and infrastructure. From a scalability standpoint, does the software and vendor operational environment have the “horsepower” to meet the current and anticipated future processing volumes of your organization? Depending on the particular functionality being selected, specific measures range from requisition and applicant volumes to the number of worker records and user counts. Prospects should also look at the bandwidth of the vendor hosting center as well as the performance of the software to identify possible bottlenecks.
This criterion is often assessed via the RFI or RFP earlier in the evaluation, and then confirmed at either a technical breakout session during the demo or a follow-up technical review meeting. Scalability is also confirmed via customer reference calls.
Service and Support—Of primary importance in this category is the breadth and quality of the vendor’s professional services offerings as well as the customer-facing support functions. Prospects should look at the size/tenure/hours of support staff, the vendor’s implementation methodology, and especially how vendor liability is defined within the service level agreement (e.g., issue escalation/resolution process). If the solution is hosted by the vendor, then another set of criteria must be weighed, including the hosting facility security (access to buildings, access to data, extent of background checks of staff), data backup and disaster recovery procedures, and compliance with prospect hosting site standards. Much of this information can be gathered during the RFP phase, but it is essential for vendor references to address these questions during the contracting/due diligence phase.
Global Capability—As one might expect, this decision driver addresses the extent to which the vendor software supports multiple languages, currencies, and/or country-specific legislative and regulatory requirements. It is important for you to understand any current and potential future plans your organization may have for expanding into additional countries in order to give proper weight to this criterion. Also included in this area are Safe Harbor Certification, data privacy regulations, data center requirements, and any country-specific legislative support (e.g., Sarbanes Oxley, Basel II, HIPAA). While statements of compliance can be gathered during the RFI/RFP phase, references from global customers are key to accurately determining the level of compliance.
Cost/ROI—always important, the focus on cost has certainly increased during the economic downturn, as firms scrutinize every potential investment to the nth degree. In most cases this criteria reflects the total cost of ownership for the solution over a multi-year period (three and five years are the most common time periods). Often part of this criterion is cost allocation—how the cost of ownership will be shared between the client’s various business units/companies (e.g., chargebacks). This rating normally includes software purchase or rent price, hosting or subscription fees, implementation services price, client resources needed during implementation and post-implementation, hardware, and any other third party costs.
Functionality-Package functionality is generally given an overall priority compared to the other decision drivers at the beginning of the project; however, most organizations break this criterion down into the various functional areas to be covered by the application (see sidebars for representative examples of functionality for three major HCM technology areas). No matter the type of project, there is almost always a priority order of functionality, driven by major organizational “pain points.” Therefore, any project team is likely to have to prioritize the most critical functionality that will drive system selection.
So there you have it. All of the key decision drivers covered and in the final segment, the next blog, we will talk about ranking these decision drivers. HRchitect’s Decision Drivers process will help ensure you get the best-fit system for your needs, the first time.
As always, please let us know how HRchitect can assist you to get maximum benefit that comes from automating your Human Capital Management functions.
Matt has over 20 years in the HR industry and has been with HRchitect since 2004. He currently serves as President and the firm’s principle HCM analyst. As one of the industry’s leading analysts on HCM Systems Vendors, Matt studies the marketplace and meets with vendors on a regular basis to stay on top of trends in this industry. Matt has moderated numerous HCM shootouts & panel discussions for vendors & HR organizations. He has also been a featured speaker on HCM solutions and workforce trends at various industry & vendor conferences.
As President & CEO, Matt oversees all aspects of HRchitect’s operations including client success, consulting operations, worldwide sales of HRchitect services, marketing, alliances, finance and corporate development. Matt enjoys working with the HRchitect team and the satisfaction he gets from watching our people grow personally and professionally within the organization, and the positive difference our consulting services make in our clients’ organizations.