What You're Really Buying When You Buy HR Technology and Support
As the driving stakeholder for the HR technology industry’s rapid growth, it would be ideal if all employers made informed purchasing decisions based on a firm underingstanding of what they are buying. In reality, however, most believe they are buying just technology, and maybe technology support. The truth is that employers are buying much more.
Employers who fail to understand this are at risk. At the very least, they will struggle to adopt the new technology. Worst case, they realize too late that they have made a poor choice and must decide between incurring the significant cost and disruption of replacement or find a way to live with the repercussions of their choice.
Before you pull the trigger on your next HR technology solution, consider what you’re really buying.
1. Innovation: You’re buying a techology provider’s commitment and capability to innovate. With the speed of tech development and new applications coming onto the market, you need to know your provider will, at the very least, stay current. Otherwise, you will quickly outgrow them.
2. Change: With any new tech purchase, you’re inviting change into your life. Embrace that change! Layering your old processes on new technology is a mistake. To get the most value out of your new technology, adopt the new processes it supports. Otherwise, you might as well have just kept your old technology or manual processes.
3. A relationship: Entering into a service agreement with a technology provider means that you’re buying a new relationship. This relationship may be surface or deep, but when you sign a contract, you need to work to make that relationship positive and productive by keeping open lines of communication.
4. Workforce culture: You’re buying another company’s culture, which may be very different from your own. Does your organization value risk-taking or a conservative approach to business? How does that match the provider’s culture? If it’s different, are you OK with the difference?
5. A point of view: With new technology you also get a point of view that most certainly will be reflected in the software. Take decision support for benefits enrollment, for example. One point of view is that employees just want to be told what to do. Another is that employees need to be engaged and understand their options to make the best decision for their needs. These are divergent views, both of which exist in the marketplace, so make sure you’re aligned with the provider you choose.
6. Technology and services: Yes, you are purchasing technology, but you’re also purchasing a service model. Determine if the company has a strong customer support mentality. Understand the level of support you need beyond the initial implementation. Do you need tech-only support or customer service for your employees? Most providers offer a range of options based on your budget and needs.
7. Data security: The weekly headlines of cyber security and data breaches should be enough to convey the importance of data security and the need to consider it as part of your risk tolerance assessment.This includes the company’s security policies, processes, ID and password protocols, cyber insurance coverage, commitment to a security audit and more.
8. Third-party integrations: New technologies have made software integration easier and a great way to add value. However, when you ask a benefits administration provider to integrate with a payroll provider, know that there is no contract between these two. In short, you’re buying integration that is not governed by your contracts with the providers and, if it fails, there is no service level agreement (SLA) to rely on for resolution. Find out in advance if a provider has a successful track record of integrating with your existing tools.
9. A set of tradeoffs: When you understand all that you’re buying when you buy HR technology, then you can understand that you’re also buying a set of tradeoffs. No single software can do everything you want. Much like buying a house, you need to separate your “must haves” from your “nice to haves,” and make a decision accordingly.
Each of these factors are important to the decision-making process when selecting a best-fit HR technology provider, but none should be the sole determinant of your decision. I encourage employers to consider and prioritize each factor in advance of narrowing a list of potential providers. If you’d like more guidance on HR technology strategy, download the 2019 HR Technology Survey Executive Summary. You’ll gain a practical, data-driven perspective on the HR tech trends and best practices that Gallagher consultants are are observing firsthand.
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