HRIT contracts with implementation partners: what to be aware of.

Here’s what to be aware of when entering into HRIT contracts with implementation partners

When your organization decides it’s time to switch to a new HRIT system, you’re not there yet after the package selection. In this blog, Bas Eggelaar and Ruben Stavast — both of SuccessDay — shared tips on how to negotiate with the software vendor. But frequently a contract is also entered into with an implementation partner. In this blog we provide a number of useful recommendations for negotiating with implementation partners. It is not only important to close a good deal, but also to ensure that you understand what you signed up for. Establish clear agreements from the outset and you will increase the likelihood of a successful HRIT implementation.

Organizations are often clueless about the fine print of a contract with an HRIT implementation partner. Not to mention knowing where there is room for negotiation and whether they can estimate whether the approach and planning is realistic. Bringing in independent expertise when entering into a contract with an implementation partner could be beneficial. This ensures that everything is clear prior to the implementation, which will save you a lot of stress and misery afterwards. According to Bas Eggelaar and Ruben Stavast, both of SuccessDay, there is a growing need for support in the preparation of HRIT contract negotiations. This can be part of a broader service package, but can also be offered as a separate service.

Because the two have a lot of experience with HRIT (HRIS or HCM) implementations, and have conducted many contract negotiations themselves, they know the ropes. In this blog, Bas and Ruben explain what to look out for when entering into HRIT contracts with implementation partners.

Pay attention to the scope

Almost all vendors today have a fast implementation methodology based on best practices. You do get live very quickly, you get return on investment very quickly, but you only get 20-30% of what the system can actually achieve. If you want to take full advantage of the system, you must configure it further. Companies that fail to recognize this, find themselves saying after a few years: ‘We actually paid an awful lot of money for what we got’. And that’s a shame, because the system can do so much more. Bas: “The first time I implemented a system like this, I had no idea what I was signing up for. What, for example, does ‘8 compensation plans in scope’ mean? I thought that sounded nice, thinking I now have eight plans in total. But by the time I had finished in China, it was 11 plans I needed there alone. So think carefully about what you agree to, and what could possibly happen in future. Otherwise, you will end up with change requests and that comes with a price tag, and sometimes even a new schedule (and therefore additional costs).”

An independent advisor can help clients to understand the contracts, understand the organization and make realistic goals and agreements. Ruben: “We point out to our clients, that after quick implementations and initial configurations, you may want to add more functionality after a year. That’s not a bad thing, but manage the internal expectations, include that in your budget, and assign people for that, or hire them.”
Create a realistic timetable

Plans for HRIS or HCM implementations are usually overly optimistic. Bas: “Implementation partners often continue to plan during the vacations, or quietly plan to go live on December 24th, with the hypercare between Christmas and New Year’s, when practically no one is at work. We help them set up a realistic planning. For example, count on four weeks of testing; just two weeks is rarely enough. In other words, build in a little slack after crucial moments. We help customers draw up a heatmap, in which you indicate peak loads. That way, the customer can also see if they can free up people or arrange hiring.”
Consider carefully which roles you need to fulfil

Which roles does the implementation partner fulfill and which do you fulfill yourself? People often underestimate the workload involved in HRIT implementations. It always takes more time than you think, and requires certain expertise that you don’t always have in-house. Bas: “A project manager usually spends 80-90% of a full-time working week on an HRIT implementation project. You simply can’t add this to the workload. And that also applies to many other roles. At peak times, it can even be a full-time job. Bring in external help early if you need to deal with peak workload.”
Negotiate hypercare and maintenance

Eventually you go live, but then it comes down to: who is going to maintain the system? What is the impact on your own support organization? Who will perform the updates? Estimate how much work it will be for an organization like yours and ask for references. One system will require more support staff than another. Hypercare (intensive aftercare shortly after going live) is often only available for three days. According to Ruben, that is usually not enough. “We try to stretch this a few more days for our customers. Sometimes you pay a little extra for this, but then you have the guarantee that all problems and questions will be dealt with properly.”

All in all, there is plenty to think about before you enter into a contract with an implementation partner. Also ensure that the cultures of your company and those of the implementation partner are a good match. An external negotiating partner is more likely to know where there is room for negotiation because they know the different parties well.

Ruben: “We are proponents of long-term partnerships. You have to look further than two years ahead. That is why we ask every party if everything is sufficiently clear, for everybody. Understand what you are signing up for. That way, the implementation goes according to plan. Within budget, according to plan and with much less stress. By doing so, you’re already one step ahead.”