How to Select Your Next HCM Technology Solution

There has been a significant rise in organizations making the strategic shift to Human Capital Management (HCM) technology adoption. The 2016 Towers Watson HR Service and Delivery Technology Survey revealed that 40% of employers are looking to change their HR structure in 2015 or 2016, and 88% will spend the same or more on HR technology.

As the demand for HR technology continues to rise, employers face a number of different vendor options when it comes to selecting the best HCM technology for their organization. In this blog, we’ll be discussing the different trends in HCM and the key steps to ensuring proper selection.

1. Consider working with an HCM technology consultant. Similar to working with a real estate agent, an HCM broker is going to evaluate your organization’s needs and point you toward your best options. This whittles down the vendor options quickly, and can speed up your buyer’s journey.

Keep in mind, HCM consultants typically partner with vendors, often limiting their recommendations to partnered solutions. The upside of this arrangement is that you don’t pay for the consulting—they receive commissions paid to them by vendors for provided leads. If you are considering an HCM consultant, check out HR Data and Systems Solutions.

2. Build your needs and wants list. The number one HR priority for 2013 and 2014 was streamlining business processes. A new HCM technology is a surefire way of moving toward this goal. The 30% of employers replacing their current core HR portals are seeking further integration between business processes and current disparate .

Related Blog: Building the Case for an Integrated HRM System

Integrated HR/payroll/benefits portals that share a single-database are becoming more of the norm, replacing disparate best of breed systems. For an evaluation on how an Integrated HR portal can reduce your time and labor inefficiencies, see Benetech’s HRIS Time and Labor Efficiency Calculator.

Also, be forward thinking as you build your ideal HRMS. This is a solution that should be able to serve your companies needs for at least the next seven years. Consider how you company plans to grow or stabilize in the coming years.

SHRM writes regarding HRMS selection, “Given the importance of the choice the employer is making, the [HRMS] package selected should meet its current needs and have the flexibility to grow and expand with the organization in the foreseeable future.” In other words, identify the level of flexibility and scalability you will need in your HCM Technology, and consider the cost of each upgrade. Some vendors have a very low cost baseline system with expensive add-ons.

As you consolidate your needs and wants, build an HRMS scorecard for vendor comparison. This will be your means of performing your apples-to-apples HRMS evaluations.

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3. Identify the vendors that meet your needs and wants. Once you’ve assembled your “shopping list,” it’s time to begin your vendor analysis. Do NOT rush this process. Take the time to evaluate at least 4-5 different solutions. You should be able to fill out most of your score card from vendor websites and online customer reviews.

Once you’ve filled out your scorecards as best you can, select your top 2-3 vendors and begin to dialogue. As the HCM market begins to standardize its offerings, they’ll start to look more similar to one another—it’s not yet time to schedule a demo. The vendor-relationship beyond the system itself should be the greater focus of your evaluation at this stage. Specifically, you’re assessing:

• Vendor viability: How many customers do they have, and how long have they been in business
• Implementation process and timeline: An HCM vendor’s implementation process is a great insight to their operational competence. If they cannot nail down a timeline or a process, this may be an indicator of disorganization in the vendor’s operations. This is a direct indicator of what your ongoing service may look like.
• System upgrade and scalability: What are the capabilities of the base-HCM technology, and how does the vendor deliver system upgrades or marketplace add-ons?

After speaking with your top vendors, you may be ready to demo all, some, or none of them. If the latter is the case, circle back to your original 4-5 options, or maybe re-consider working with an HRMS broker. Most importantly, don’t rush!

Related Blog: What to look for when selecting an Obamacare Software Solution

4. Conduct your system demos. This is when you are pulling out your scorecard again and returning to your list of HRMS needs and wants. Your scorecard will also drive the questions you’ll be asking your vendors about their system. This will prevent the need to have repeated follow-up calls and optimize your demo experience.

When conducting vendor demos, follow these best practices:

• Make sure that you have the right people present for the demo. Specifically, those who will be using the system on a regular basis should all be present, having made their own contributions to your vendor analysis scorecards.
• Ask vendors to record your demos. You may want to revisit some of the feature overviews from the demo.
• Ask detailed questions about implementation. HRMS implementation can often be something that people delay discussing until they’ve made their final decision. That’s a mistake! The implementation and ongoing service description is arguably half of the user-experience.
• Schedule your demos as close as possible, but not in the same day. This will allow help you distinguish one vendor from another when you have your team evaluation before final selection.

5. Forecast your future HRMS experience with your top vendor choices. This is where you gather your team and imagine life with your future HRM System. Every organization has its different ways of operating, and some systems may align more readily with your current business practices than others. Chances are you are going to need to make some changes to your current business processes in order to leverage the full potential of your new system, but you are also working to minimize the churn that is inherent to any cultural change.

HRMS experience forecasting is a fundamental step in aligning the team with embracing your new system. You have to share a common vision. It only takes one person to erode the efficiencies of your new system.

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Conclusion: Final HRMS Selection. Once you’ve chosen your HRMS vendor partner, you’ll be building out your implementation roadmap. This is where many organizations fall short and fail to invest the resources necessary to fully operationalize their new system throughout the company.

For further reading on implementation, check out our blog, Avoiding HRM System Implementation Catastrophes.