For those getting ready to go to HR Software or Learning Technologies Shows may find our thoughts useful to help direct some of the questions you’ll need to answer before you have for meetings with suppliers when choosing talent management software – and the logical steps to take.
1. Build or buy?
Is buying an off-the-shelf product a realistic proposition? To what extent would you have to customise it? Would it be better to commission bespoke talent management software?
2. Single or multi-vendor approach?
Can one supplier meet most or your needs, or do you need to integrate the best 'bits' from different specialist suppliers?
3. Business implementation strategy?
Do you implement employee self-service first, or payroll, or flexible benefits or performance management, ... ? Which strategy will you adopt and how would you explain your choice to your stakeholders?
The next steps
Establishing a robust buying process, which is more than just competitive tendering, provides the necessary insight for making these critical business decisions. In this article we describe the key steps of a proven process enabling buyers to select the right HR management system.
Step 1 - Building the business case
The most important first step is to prepare the business rationale for making the investment in a new or improved HR management system, starting with a stakeholder analysis to identify touch points of those relying on information or services from HR. Having identified these stakeholders, we recommend defining a process of engaging with these 'customers' to review their current level of satisfaction with the information and service they receive from HR, and to identify and quantify opportunities to deliver additional value. This will provide focus and priority to your improvement efforts. For more guidance on how to write a business case, take a look at our Guide to Writing a Business Case.
Step 2 - Improve HR business processes
Based on your analysis of the above, identify how an HR management system would enable you to meet the expectations of your key stakeholders more efficiently. Which of the needs could you meet by implementing a better HR management system? If you haven't already done so, we recommend using a business process mapping technique such as ICOM (Input, Control, Output, Mechanisms) or RAMS (Requirements Analysis for Management Systems). This will help you identify how the different HR processes are interrelated and consequently identify the key building blocks essential to deliver the desired value to the business.
Step 3 - Define and prioritise functional requirements
Steps 1 and 2 will have identified the major functional requirements for a new HR management system. By taking a holistic view and defining the core information requirements to support all of your value-adding HR business processes, you can specify your requirements for a core HR database that will meet both your current and your expected needs, reducing the risk of replicating data unnecessarily between different systems in the future. You can also identify and prioritise the software functions that will deliver the greatest value to the business.
Step 4 - Survey the market place
Asking potential suppliers to state their capability against your requirements enables you to evaluate the relevance and capability of different suppliers' solutions and allows comparison for potential solutions on a like-for-like basis. By doing this, you exert control over the buying process rather than reacting to a sales process driven by software vendors. Keep your long list of vendors 'long' to ensure market coverage, use technology suited to scale (such as internet-based surveys) and focus on simple 'compliance-based' questions to make analysis of many responses swift. It will be clear from your analysis of the long-list whether you are in a build or buy situation. Using this technique we recently helped a client identify and qualify a single supplier solution from a supplier previously unknown to them, where they had expected to have to develop a bespoke solution.
Step 5 - Qualify short-list suppliers
To identify whether a single supplier solution meets all your needs well enough and to prepare a qualified short-list, we recommend repeating the survey process with a shorter list of pre-qualified suppliers and with more specific questions related to your prioritised functions. Ask the suppliers to state whether the desired outcome is achieved using standard features, through customisation or through integration with a third party. Ask for standard prices and, importantly, the price for customisation as it will reveal the true extent of the work to implement.
Matching the responses to your prioritised needs reveals the suppliers' relative strengths and weaknesses providing an objective basis for preparing a short-list for final selection, demonstration, negotiation and contract.
Step 6 - Make your final selection
Base your final selection on a combination of structured supplier demonstrations, conducting a hands-on trial, taking up references, visiting other customer sites and performing a detailed comparison of costs. Ask the short-listed suppliers to demonstrate how they would use their software to perform specific tasks which you select from your list of prioritised needs. This will give you the best insight on how easy it will be to use the software to achieve the desired outcomes. It will focus the discussion on the most relevant features and enable a more objective comparison of solutions. The extra preparation required by the supplier to respond to this requirement will provide valuable insight into the supplier's willingness and ability to support you in achieving your objectives.
The application of this robust buying process when choosing talent management software will equip you to decide whether to build or buy, whether to adopt a single or multi-vendor strategy, and what features of the software will enable HR to deliver the best value to the business.
The process delivers a:
- list of stakeholders and a current view of the business' needs and wants
- consolidated list of requirements that might only have partially existed
- roadmap for implementing functions according to priority
- clear, evidence-based rationale to support your decisions
- short-list of vendors that can meet your requirements and an objective means with which to evaluate their offerings and value for money
- set of vendor compliance statements that can form part of the basis on which you can contract, and hold them to deliver.
You may also like to take a look at our list of questions to ask of potential Talent Management suppliers.