Choosing the right HRIT or HCM system can be a challenge. It is just as easy to overlook important steps in the selection process as it is to lose yourself in details. There are many HRIT vendors and – understandably – their systems share many essential functionalities. They all provide basic options for recruitment, onboarding and hiring & firing. So you may be tempted to think that the choice isn’t really that complex, because you can’t really go wrong. This is a misperception.
First of all, HCM vendor selection is about understanding your own HRIT requirements, now and in the foreseeable future. The selection process helps you identify and structure these requirements. And secondly, there is a reason why there are so many systems out there: they all offer specific advantages for different organisations. Now you want to know which one suits your organisation best. But how do you go about it?
Our five stages of HCM/HRIT vendor selection
To structure the selection of the right software vendor and make the process more efficient, SuccessDay developed a Supply & Select Package. Based on our experience and market best practices, we distinguish five crucial stages in vendor selection:
1. HR Vision and Strategy
You need to know where the organisation and HR are heading in order to select the appropriate HRIT/HCM software. So the first step is to analyse the organisation’s vision and strategy, discuss the role of HR, and determine where the new HR system fits in the plans for the future. This asks for the involvement of Finance (CFO), IT (CTO), Operations (COO) and HR(CHRO) itself in a steering committee, and the establishment of a Supplier Selection Core Team that includes HR, Legal and strong Business Representation.
2. Scope & Requirements
Once you know where you are going, you can identify the functional requirements for the corresponding HRIT transformation. The most important thing in this stage is to define the right scope. It is so easy to lose yourself in details: before you know it, the team is filling out gigantic Excel sheets with all kind of requirements from the highest priority to the smallest action. In our experience, this does not provide any insights at all and will only make it more difficult to make decisions. With our method, we ensure that you stay in control and make progress. Two aspects are especially useful in this regard: the timely involvement of Business and IT, and the combination of high-level requirements into Real Life Use Cases.
3. Vendor approach including ‘the under the hood’ and cultural fit
Now, it is time to approach possible vendors. With the results of stage two, we can help you determine a short list of the five most suitable HRIT providers, and request information from them based on the determined scope and requirements. This is also a good moment to take a look ‘under the hood’ and see how non-functional requirements of your HRIT setup, like connectivity, authorisation set-up, innovation speed and plug and play possibilities, match the software of different vendors. You are looking for a cultural fit, bearing your vision and strategy in mind.
4. Use Cases
Depending on the vendors’ replies, we select three parties who will be invited to give a demonstration of their system, based on the Real Life Use Cases that we will compile to reflect your organisation’s needs and practices. A tailor-made Use Case goes well beyond an ordinary system demo, and will help you determine if the system is efficient and fit for you organisation. It also gives you an idea of the way employees respond to it, which could help improve user adoption. Prior to the use cases session, the team has a number of crucial tasks, including selecting the right audience for the demos and creating Use Cases Check Lists.
Following the results of the demonstrations, you send an RFP (request for proposal) to one or more providers. When the proposal(s) are received, we can support the responsible persons within your organisation during the negotiations and help in drawing up the final Business Case. At this stage, it is very important to look at the total cost of ownership (TCO), including expenses that are often overlooked, like the implementation costs and the system’s support & maintenance costs.
Senior Consultant at SuccessDay, currently supporting multiple international clients with Implementation Project Management and Vendor Selection.
Managing Director & Programme Manager at SuccessDay. Currently supporting an international client (26.000 employees), with a worldwide rollout of SuccessFactors.