If you think choosing an ice-cream flavour requires a lot of thought, you may want to sit down when reading this.
Selecting a new technology vendor can seem like a daunting task when there is a lot to consider in the market – it can be difficult to know where to start. The HR technology market is particularly congested. At LACE Partners, we have assisted many clients through their vendor selection process for various HR & payroll technologies. Based on our experience, I’ve pulled together some tips to help get you started and make your journey a bit easier.
Get your ducks in a row
Already out shopping? You need to put down the shiny new toy and pause. There’s an important question to ask yourself before you begin this journey – what is the problem I am trying to solve? If it is within your current environment, get close to the people on the ground feeling the pain to fully understand what is broken and what needs fixing. What is it about our current system(s) that isn’t working? What outcomes do we want to achieve? What employee experience are we aiming for? If you are future proofing for upcoming changes to align with your business strategy (e.g. growth or mergers & acquisitions), you will need to translate the vision into requirements. How does this reflect in your company’s technology roadmap?
Having clarity on the “why” will help avoid delays and accelerate the whole selection process.
Look at the overall process
Take some time to get familiar with the overall vendor selection process. Here are eight steps we recommend in our approach:
- Requirements gathering & discovery – Define what you need
- Long list – Identify potential technology vendors
- RFI (Request for Information) completion & scoring – Initial information request
- RFP (Request for Proposal) completion & scoring – Assess whether the technology has what you need
- Shortlisting – Reduce the list to two to three vendors
- Demonstration workshops & evaluation – Evaluate the vendors & their technology
- Decision – Select your preferred vendor
- Negotiation & contract – Period of contract negotiation
Consider how the timings of activities such as demonstration workshops and contract negotiations might be impacted by other events in your business’s calendar and plan accordingly.
Get the support you need
To set yourself up for success, make sure that you are supported by the right stakeholders and skill sets throughout the journey.
In terms of stakeholders, we would recommend that clients engage with a number of key representatives from various functions within the business:
- HR: typically your HR Director (HRD or CPO) or senior HR leaders
- IT: either the Chief Information Officer (CIO) or the Chief Technology Officer (CTO)
- Finance: typically your Financial Director (FD)
- Representatives from Procurement and Legal
At the very beginning of the process, it is important to have clarity on the governance group required to make the final decision. Ensure they are involved when developing requirements and are engaged through to contract negotiation.
From a capability perspective, look for very specific skill sets and knowledge (inside or outside the organisation) to run the selection process such as Request for Proposal (RFP) writing, project management and tech market knowledge.
Start mobilising people with these skill sets as soon as possible. If you can’t do this in-house, look outside your organisation. Make sure any external provider can provide you with impartial advice and has experience of previous selection processes for similar technologies.
Know your deal breakers
Rarely will a technology be able to meet every single requirement on your list and you may need to make some compromises. Because of this, it is important to prioritise your requirements and know your deal breakers. The selection process can easily become expensive and time consuming if you take all vendors through the full process. Deal breakers should be communicated early on when briefing vendors and used to develop RFI criteria.
What could be a deal breaker? Full implementation costs (not just software cost), functionality maturity, country/language requirements or integration capabilities.
However, remember that if a vendor cannot currently satisfy your deal breaker requirements, find out if the development of the missing piece has been committed to in their roadmap of future enhancements.
Making the right choice
In the end, making the right choice is about:
- Assessing what matters: Ask your vendors to prepare a solution for specific and real-life scenarios that are relevant for your organisation and assess against those.
- Asking around: Client references are a valuable way of getting further insight into the product, the implementation process and what the vendors are like to work with. Ask for references and take them up, talk with your peers and ask tech market experts!
- Having a culture fit: Consider which vendor is the best cultural fit for your business. How do your values align? How will your employees react to the technology? Consider the vendor’s preparation, communication, proactivity and advice provided throughout the journey so far.
Don’t jump into bed with a vendor before you are clear on what you need, have done your research and have got support from the right people. Make sure that you act smart when evaluating vendors by tailoring your approach so that it is unique to your business needs.
As for the ice-cream, go with Tiramisu.
