HCM Vendor Selection Tips

November 23, 2020

People are the most important asset in any organization. The ability to attract, retain, and develop talented people is vital to your organization. Without the right Human Capital Management (HCM) systems in place to help HR leaders manage, analyze, and act on critical data, organizations run the risk of losing top talent.

If your organization is outgrowing dated homegrown systems, wants to move from on-premise to the cloud, or is just not happy with your current HR technology systems, you may be considering searching for alternatives. The process of evaluating and selecting a new or replacement HCM technology system can seem overwhelming. After all, there are hundreds of vendors in the marketplace today.

When our team works with clients to help them identify potential HCM technology vendors, we start by evaluating each vendor based on five key criteria: vendor profile, target market, product specialization and legacy, pricing, and localization. Using the slate of viable vendors as a starting point, we then guide clients through a comprehensive evaluation and selection process to help them make a data-driven decision when deciding on their new system. Here are some of our team’s tips and areas you should take into consideration when starting that initial step of narrowing down from the hundreds of potential new vendors in the space to determine which vendors to include in your RFP process.

Basic Vendor Information – When and where was the vendor founded? When was their product platform launched? How many active customers do they have? Understanding basic vendor information will give you an idea of the vendor and their technology platform’s maturity and long-term viability while helping you to develop a better understanding of the marketplace landscape.

Target Market – What target market does the vendor cater to? Do they target customers that are small to medium-sized businesses?  Or, are they focused on working with larger enterprises? Understanding the vendor’s target market will help to narrow your search to vendors that have a proven ability to work with clients of your size.

Product Specialization and Legacy – Does this vendor, or the platform have a specialty? Some vendors excel in supporting a specific industry or have a module that performs exceptionally well compared to other competitors in the marketplace. What is the history behind the technology? Was the platform first developed for a specific module such as payroll, and then expanded over time to support HR or vice versa? How were the new features established? Was it through development from the vendor’s engineering team? Or, were add-on features brought in because the vendor acquired another vendor’s technology?  Understanding product specialization and legacy will play into the strengths and weaknesses of modules.  Sometimes features that brought in through acquisitions can create clunky or disjointed user experiences as well, so there is a lot to consider in this area.

Pricing Model – Each organization’s needs, in terms of business requirements and the HCM applications to help meet those requirements, are different. For example, if you are looking only for a Payroll and Core HR solution, and you don’t need onboarding or recruiting, how your prospective vendor offers additional modules, and the related pricing model is important. Is a full suite of modules out of the box worth the price premium? Or, do you need a la carte pricing where you are paying only for the modules you need?  There are pros and cons to both methods. Talk with your strategic consulting partner, like HRchitect, to determine the model that makes sense for your unique business.

 Localizations – Your business may be operating in a variety of countries and regions or planning to expand.  It is essential to understand if your potential new HCM technology vendor is able to support all relevant localizations from a language, compliance, and cultural perspective.

The world of Human Capital Management is constantly changing. Organizations fight the war on attracting and retaining top talent, while HCM vendors rapidly innovate to meet the need. The result is a seemingly endless array of choices, with no clear fit for your unique business. Are you prepared to start a new HCM technology initiative without an expert by your side?

HRchitect offers you relief from this volatile situation by pairing your company with experts who work alongside your team to build a roadmap for your HCM technology, select a new or replacement system, implement and integrate your new HCM technology, provide ongoing support, and everything in between.