I am Steve Cohen

"The Truth Might Make You Uncomfortable"

Category: Professional

The Power of a Single HCM Application

Multi-generational, virtual, and global workforces have added a new layer of complexity to the traditional functions of HR, Payroll, Benefits, and Talent Management. Attempting to manage all of these functions via disparate solutions is proving to be a major challenge for HR leaders, yet many organizations still operate off of 3-4 systems.

In response to the SMB client driving up the demand for a single system of record for all things HR, both traditional service bureaus and HR technology vendors began developing and promoting an all-in-one, unified, single HCM platform.  

Some vendors bolted on applications, while other vendors developed additional functionality, established partners, or designed an entirely new HCM system from the ground up. The outcomes for the end-user can vary significantly depending on the path chosen by the vendor. This is why it’s ultra-important that both the functionary and executive decision makers understand exactly what they’re investing in before signing a contract.

The HR department is under a lot of pressure having to perform many functions and derive the greatest value from their organization’s most valuable asset- their people. HR departments need a system that they can rely on and can serve as the backbone of the HR department to attract, engage, and retain employees and efficiently administer back office HR and Payroll functions.

THE BENEFITS OF A SINGLE HCM APPLICATION:

1. Improve Employee and HR Productivity

HR departments are relieved of the cumbersome, time consuming, administrative tasks often associated with employee master file maintenance. One application for complete employee lifecycle management eliminates paper-based processes, multiple spreadsheets needed to produce reports, and the transferring of data between various modules that aren’t always compatible. With Mobile apps and user-friendly self-service functionality, employees are empowered to manage their core personnel data, enroll in benefits, self-onboard, record time, and conduct reviews.

2. Boost Employee Engagement

With only 32% of all U.S. employees engaged, HR Leaders continue to be challenged to navigate the demands of a virtual and multi-generational workforce. Keeping employees engaged and developing a culture that attracts and retains top talent is the talk track at every HR table across the country. From agriculture to the technology sector, employees expect real-time feedback, instant access to information, and the ability to easily collaborate and share information with their colleagues in a single place.

3. Better Data

HR data is the foundation of making sound business decisions. Pulling data from multiple systems to generate reports is frustrating to HR leaders, revealing gaps between systems and requiring extended employee training. With a single data record for all things HR, you can easily access data and create instant reports on everything from recruitment to retirement. A single employee record stored in the cloud ensures that a file never gets misplaced or misfiled and that data is always consistent and accurate. Data on its own is a core reason as to why 33% of organizations are willing to sacrifice feature capabilities for a single vendor platform that offers a single source of truth.

THE LATEST INDUSTRY BUZZ

A single source of truth, it’s the latest buzz in this industry- so what exactly is it?

It suggests that HR should drive an organization’s strategy from a single platform that consists of real-time, meaningful analytics with only one copy of all transactional data. This single source of truth provides critical guidance for all of your talent management decisions and aligns every department in the organization.

A single source of truth is the supporting foundation for AI (Artificial Intelligence), PA (Predictive Analytics), and a 100% mobile employee and manager experience.

Vendor or Client Responsibility?

Who is responsible when HCM technology and service vendors fall short of delivering on the desired outcomes?

Are vendors over promising, or are buyers making assumptions about technology and services during their evaluation process that haunt them later?

After two decades of sales in both the mid-market and enterprise HR space, I have seen a dramatic shift on how buyers and vendors engage.  In the late 80s and early 90s, prospective buyers had to rely on direct interaction with sales representatives to learn about products and services and sales representatives needed to meet with prospective buyers to learn about their businesses and their requirements.

A face to face meeting fostered relationships and established trust.  Sales representative were trained to conduct a thorough due diligence process and share their findings with the buyer. This evaluation process wasn’t perfect, and you don’t know what you don’t know, but the responsibility to deliver positive outcomes rested heavily on the vendor.

What has changed?
  • Over 60% of all research on a product or service is done online prior to even contacting a vendor and with the significant amount of information available on the web, most buyers feel certain they know enough prior to engaging in a discovery meeting.
  • Websites like SoftwareAdvice or SelectHub exist to help buyers narrow down their search based on core buyer criteria.
  • Through social media, blogs, chat rooms and industry forums information exists on the pros and cons of each vendor’s offering directly from consultants and current clients.
With all this information available, why do vendors fall short on delivering on their client’s expectations?  
  • No two customers are exactly identical and each vendor has a list of features and functions along with service gaps that don’t address specific client requirements.
  • Client uniqueness may be driven by employer size, industry, demographics, geography and overall workforce complexity
  • Vendors don’t voluntarily share their list of functional and service gaps. If sales representatives don’t know enough about the client requirements, outcomes can be jeopardized.
  • Buyers are reluctant to have open transparent discussions, quality time to conduct due diligence sessions and far too often limit vendor access to key team members of the team that possess certain intellectual capital.
  • RFPs and RFIs are used for the basis of determining feature and functional gap alignment, but inherently, they are flawed, for they are frequently influenced by the vendor community.
  • The cost of travel, virtual teams and packed calendars all have played a role in the breakdown of effective vendor and buyer interaction.
So what is the answer?
  • Vendors must take on more responsibility to adequately determine if they have enough information to ensure they can deliver on the client’s desired outcomes.
  • Vendors must invest in additional training for their field sales force and sales engineers to know how to ask the questions that must be answered by the buyer during the evaluation cycle.
  • Vendors must live up to their integrity value statements to ensure adequate transparency on those functions of their deliverables that can potentially impact their clients in an adverse way.
  • Buyers must be more accessible and flexible to accommodate their finalist vendor’s request to gather more information. If the vendor is not requesting more time, buyers should be concerned.
  • Buyers must be more transparent with their internal challenges that may prevent them from executing on their objectives.
  • When appropriate, buyers should ask for a list of some functional gaps that are being addressed in future releases that may impact the success of the project.
  • Buyers must be clear on how they will define and measure success and those results must be shared and owned as well by their vendor selected.
So who is responsible?  We both are!

When it comes time to search for a new HCM partner, it’s critical to take the time to conduct thorough research and have those in-depth conversations about your organization’s unique challenges. After all, the cost of a bad decision will outweigh any upfront investment you make in selecting the right partner.

Service Bureau vs. HCM Technology Provider

So what is the difference between a Payroll/HR Service Bureau and a Human Capital Management Technology provider?

This question continues to be asked by thousands of HR and Finance Executives trying to make a decision on the type of partner they should choose to help them with their HR, Payroll, and Benefit Management needs. There are fundamental differences between the two, but often the areas of distinction are cloudy for the decision makers. The risk of choosing the wrong partner can be extremely costly to any organization.

So when and where did the distinctions become so cloudy?

The evolution of HR, Payroll, and Benefit technology in the cloud has significantly changed the landscape for the industry. A shift in how technology is delivered to the customer and the expectation of service has led to the existence of a gray space for organizations with the DNA of a Service Bureau versus those with the DNA in technology development. Executive leaders of these vendors have an internal struggle to answer the most basic questions: Who is our ideal customer and how do we best serve them while increasing shareholder value? Clearly, these should be simple questions to answer, right?

But, these vendors are under pressure from their investors, both public and private, to market themselves to best maximize industry valuations. This corporate reality often results in organizations presenting themselves as something they are not, and ultimately, it’s the client that pays with a bad partnership decision.

What are the distinguishing characteristics between Service Bureaus and HCM Technology Providers?

Service Bureaus cater to the bell curve of customer requirements—our industry calls this a vanillaservice model of product and service capabilities “in the box”. A packaged product and service model with an assembly-line support infrastructure, built for significant volume, that generally yields improved profitability, but this means that all customers have to be placed into “the box” or the business model breaks down and the customer experience is impacted. The good news for the industry and for HR Executives alike is that the technology offered by the top tier Service Bureaus generally delivers significant functionality with a level of configurability that serves a broad base of customers. So essentially the “box” has gotten bigger and for thousands of customers the “box” works well and their business objectives are being met.

It is a pretty common practice amongst service bureaus, to either license software from a third party technology provider OR purchase a company that has developed a technology that better serves their customer base. Acquiring technology has been successful in the past, however, it does come with limitations often exposed by sophisticated buyers during their due diligence process. Service Bureaus tend to struggle to deliver system changes to accommodate unique client requirements. If the feature gap is significant, buyers should consider evaluating vendors that have proprietary technology that can improve user adoption and result in better outcomes.

Human Capital Technology firms have product development in their DNA and as a result when faced with trying to solve business problems, they rely on their ability to enhance their technology to meet the needs of their clients. HCM technology firms develop solutions that solve the business needs of certain buyer profiles so understanding the architecture of the system, core and enhanced functionality, configurability, user tools, and the marketplace the platform was designed for will help ensure a positive outcome.

Organizations are often like Zebras and Zebras all have their own unique stripes (requirements). If you believe you may be a Zebra, make sure the HCM provider likes working with Zebras and press them to demonstrate how the system will address your needs. Be careful not to assume that every provider of HCM technology can effectively handle complex payroll and tax management. In fact, many HCM providers rely on third party technology to address the complexities of payroll and tax, so make sure you understand the product evolution of the vendors you are considering.

In addition to technology solutions, many HCM Software providers have recognized and can deliver services beyond just technology. The industry refers to these services as Administrative Outsourcing Services (ASO), like tax filing, printing, garnishments, and benefit administration. When moving from a Service Bureau to an HCM Technology Provider, be sure to understand the level of services offered and how those services are delivered.

If you do your homework, conduct a thorough due diligence, and be transparent during your vendor evaluation, you will increase your odds of choosing the right partner.

Key Questions to ask the vendor to best determine their DNA:
  • What is their recommended due diligence process?
  • Are they trying to understand your unique requirements?
  • What is their billing method? Transactional or PEPM?
  • Did they develop their own platform or license or purchase it?
  • What client level of control will you have to system administration and configuration?
  • Do you have to contract for outsourced administrative services or can you manage internally?

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