Posted by: Ron Hanscome | November 18, 2009

HCM Software Selection: Decision Drivers, Part I

In a previous post I introduced the concept that a singular focus on feature/function requirements can result in a flawed software selection process, and ultimately an implementation that does not deliver value to the organization. There are a number of other criteria that a project team should factor into the overall evaluation to ensure a more balanced view of the available vendors; one of the team’s first tasks should be prioritizing these “decision drivers” based on their organization’s unique characteristics, strategies and priorities. Let’s take a look at the first half of the decision driver list:

  • Vendor Viability – the best software functionality in the world doesn’t help if the vendor is not around to support and enhance the application. Viability is usually an aggregate rating composed of the following elements: Financial status of company (such as funding, cash position, burn rate, profitability), market position, strength of product landscape/road map, vision, execution, and channels/partners. Potential metrics supporting the ranking may include client wins in recent quarters, number of customers, number of employees, or likelihood to be acquired. Note that the project team should take advantage of the company CFO and his/her staff’s expertise to help assess the financial health of the vendors being evaluated.
  • Package Usability – the rapid emergence of easy-to-use social networking and commercial applications has increased the importance of this criteria for most organizations, especially those that have a higher percentage of younger workers that are “digital natives.” Package usability is usually determined by demo script/hands-on scoring, as well as reference feedback.  How intuitive is the system?  What is the number of clicks required to complete a transaction?  How easy is it for end-users to navigate through the system?   Are the screens cluttered or clean? Can the application appearance be configured to reflect the client style guide? How much training per client role will be required?
  • Cost / ROI – always important, the focus on cost has certainly increased during the economic downturn, as firms scrutinize every potential investment to the nth degree. In most cases this criteria reflects the total cost of ownership for the solution over a multi-year period (three and five years are the most common time periods). Often part of this criteria is cost allocation – how the cost of ownership will be shared between the client’s various business units/companies (e.g., chargebacks). This rating normally includes software purchase or rent price, hosting or subscription fees, implementation services price, client resources needed during implementation and post-implementation, hardware, and any other third party costs.
  • Ease of Integration/Interoperability – regardless of the scope or extent of the application under consideration, it will need to connect with other HR and enterprise systems. Even though there has been some general progress in building better integration frameworks and enabling technologies, most organizations still underestimate the cost and time needed to integrate these systems, which suggests that the criteria should be given a higher priority. The criteria rating should include an assessment of the application’s integration framework, Application Program Interfaces (APIs),and ease of integration with 3rd party applications. In addition, this category examines the extent to which the vendor has implemented services-oriented architecture (SOA) to enable/increase interoperability.
  • Technology – often a ‘knockout’ criteria (e.g., a vendor not able to satisfy the client standard is eliminated from consideration), this item examines overall fit with the organization’s tech standards/conventions, and also assesses the strengths/qualities of vendor’s technology strategy and infrastructure.  This is often preliminarily assessed via a Request For Information (RFI) or Request For Proposal (RFP) earlier in the evaluation, and then verified at the technical portions of the demo and during a technical review meeting.

Each one of these criteria can have a substantial impact on the success of your HCM technology implementation, and it is important for your project team to agree on priorities BEFORE the vendors come in for the demo so that they are not inordinately swayed by application “bells & whistles.”

I’ll cover the rest of the decision drivers in my next post on the subject…so stay tuned!

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