Dec 17, 2014 | Blog

How to and How Not to Select Your HR Technology

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For several years of my long career, I worked in the Supply Chain department of a global Fortune 500 company. I quickly learned the value of following a structured RFP process when determining which supplier to use for a particular item or service. The enjoyable portion of the experience was the wide variety of running RFPs for items which ranged anywhere from purchasing vehicles and vehicle parts, all the way to purchasing Hispanic marketing services. Assessing the right HR technology purchase should be no different.

When it comes to purchasing HR software, whether it be an enterprise-wide system or a desktop / cloud application for a handful of users, the components of the purchasing RFP process remain the same. In reality though, the purchasing decision is often left up to one person to research and make a recommendation. Sometimes that leads to surprises. Allow me to suggest a different way using the following steps.

  1. Determine stakeholders and form the RFP team.
  2. Document functional requirements.
  3. Create formal RFP document.
  4. Assess the market.
  5. Launch the RFP.
  6. Score the RFP responses.
  7. Select the winning supplier / vendor.

Let’s delve a little deeper into each step.

Determine Stakeholders and Form the RFP Team

Any piece of technology will impact a variety of people throughout the organization and each person will have their own requirements. You will have the following:

  • Users of the system whose daily role feeds data into the system.
  • Users who need the data in the system to perform their daily functions.
  • Users who may analyse the data in the system for decision-making.
  • IT and/or HRIS personnel who may be involved in system implementation and support.

While not an exhaustive list, what this begins to demonstrate is that you need to move away from single employee purchasing decisions and instead, form a team for the RFP. Each team member will be an expert in their area and can contribute unique information so that the risk of making a bad decision is greatly decreased.

Document Functional Requirements

With the RFP team in place, a list of functional requirements can be made. What does the system need to do? Where does it reside? What support from IT and/or HRIS is required? What are the reporting capabilities? Can you extract data and how usable is that extraction? Does the vendor offer a way to try the system before you buy it? What does it cost and how is that cost structured? Are the processes in the system aligned to the way you do business?

Once the functional requirements have been consolidated, a level of importance on each requirement needs to be assessed. The likelihood of finding a system which perfectly matches your requirements is rather low so rating each requirement’s value will help determine which solution may be your best fit.

Create Formal RFP Document

With the list of requirements in hand, a formal RFP document can be created. This should include not only the requirements of the system but any legal terms associated with doing business with your company. It should also outline the timing and response deadlines for your RFP project and clearly identify how you will gather the RFP submissions.

Next, create a scoring sheet which lists the requirements and their weightings (the value you attached to each requirement). This sheet will be used to score each vendor’s submission.

Assess the Market

This steps involves researching which systems exist which may meet your requirements and preferences. This step does not require researching every requirement on your list because having the vendor respond to your RFP will get you that information. The purpose of this step is to form the list of potential suppliers / vendors that may meet your needs.

Launch the RFP

Whether you use email or one of the online RFP systems available, the RFP launch makes the RFP document available to the vendors on your market list. Once the RFP has launched, you may have other vendors contact you in order to be considered. You can determine whether you wish to add these vendors to the bidding list but I don’t recommend delaying your response deadline to accommodate them.

Score the RFP Responses

After reading the RFP responses, each team member scores each vendor’s response on the score sheet previously created. The intention is to have all team members do their scoring individually. This is because individuals may interpret the information they read in a different way. An HR professional may interpret information differently that someone with a background in IT. Both perspectives are of value.

The team leader can then consolidate the scores and in a team meeting, discuss any widely varying scores. At the conclusion of this exercise, a short-list of potential vendors can be determined. These are the vendors to which you grant the opportunity to demonstrate their product.

Select the Winning Supplier / Vendor

After the demonstrations are complete, the team can reconvene and determine the best application to meet the needs of all stakeholders. A note of caution, in the software space, I would recommend asking for a way to “try before you buy.” Many software demonstrations look great and it’s not until you actually try to use the software for your own purposes that you truly discover what it can do…or more importantly what it can’t do!

I hope this article has provided you with a more structured process by which to make your technology decisions.

Until next time,

Tracey.

Tracey is the author of “HR Analytics: The What, Why and How” and "Strategic Workforce Planning: Guidance & Back-up Plans." She is the editor of NI Magazine, a global e-magazine dedicated to HR analytics and strategic workforce planning. She holds degrees in Mathematics, Engineering and Business from universities in Canada and the U.S. and has over 20 years of experience in the areas of Human Resources, Supply Chain and Engineering. She was born in the U.K. and has worked in both Canada and the U.S.

Tracey is an independent consultant and her company, Numerical Insights LLC, helps clients in the areas of HR Analytics, Workforce Planning, and HR Process Improvement.

You can find Tracey on the web at:

Web Site: www.numericalinsights.com
Magazine: “NI Magazine: Numerical Insights for HR”
NI App: https://itunes.apple.com/us/app/numerical-insights/id939343547?ls=1&mt=8
Email: publications@numericalinsights.com
LinkedIn: http://www.linkedin.com/pub/tracey-smith/0/523/77a
LinkedIn Group: https://www.linkedin.com/groups/Numerical-Insights-LLC-8176381
Twitter: @ninsights
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