It’s probably not surprising to learn that HR professionals long for improved integration when it comes to technology solutions. In one survey of 500 such professionals, 90% of respondents said integration is a key priority. But, how can organizations integrate their HR systems more effectively?
Organizations can choose from three options when building HR technology infrastructures – each with its pros and cons. Here are those options and details about how they work as you consider what’s right for your company.1) Multiple Vendors & Multiple Technologies
One vendor for performance management, another for knowledge management, another for succession recruiting, and so on. The basic thinking is that each service provider is an expert in its niche, as opposed to buying a more generalize solution that might do it all, but not that well.
Upsides to this option include the cost savings of an a la carte approach and bargaining power. Vendors that provide only 20% of a company’s HR services are typically smaller and not that well known, which can make them more willing to negotiate than their larger, more established counterparts.
However, because it creates siloed activities, this approach is the least preferable. It’s harder to create reports; workarounds become common, which leads to manual processes. And, these problems cost money, whether they’re hard costs or soft costs.2) One (Outside) System to Rule Them All
Another option, particularly for larger organizations, is to go with one outside vendor that sells generalized solutions covering all functionality. If you need a lot of functions, this can save money through bundling – and the outside vendor is usually good about keeping its system updated. But this option requires being a smart and attentive shopper.
Many times, an organization invests in a new system only to learn that it doesn’t quite do what they thought it did. You can partially avoid this by asking many detailed questions during the sales process and making sure key stakeholders within your organization are deeply involved.
This problem isn’t about vendors being dishonest. During the sales process, even the most well-intentioned salespeople might not understand what’s being asked of them.
An outside vendor providing a holistic solution is probably better than patching a lot of systems together, but a lot of diligent, upfront work is required.3) A Customized Solution
More and more companies use a customize solution. They’ve tried the first two options with frustrating results. Now, they’re getting rid of legacy systems to simplify operations, particularly as their organizations become more global.
This is a tantalizing option for an IT company because much of the talent to build the system is already in house. The build-your-own approach is popping up across multiple sectors despite the enormous investment required. Due to the cost, it’s most common among large-cap companies.
Yet, potential downsides do exist. If the custom system covers all HR functions, it’s even more important that it be updated regularly – something an in-house team might not be as well positioned to do as an outside vendor. It’s common for vendors to build custom solutions for an organization and stay on in a consulting role once the system is launched. Of course, that’s a big and ongoing investment.
Like the second option, a custom solution requires a great deal of work and planning, including phased launches and pilot programs.
What Should I Do?
Regardless of the option you choose, it’s important to know the pros and cons. If an organization can afford it and needs it, the smart money is on a customized solution or, at least, one that avoids patches and gives HR professionals what they need.
Because what they need, increasingly, is integration.
This content originally appeared in HR Technologist.