Choosing an HR software solution can be daunting. With so many options available, it can be hard to evaluate which is the best bet for the long term. One of the first considerations is whether to go for a specialist talent management vendor, also known as a ‘best of breed’ solution (e.g. PageUp, Cornerstone OnDemand, Saba) or to opt for a large enterprise system, or ‘monolithic’ vendor (e.g. SAP, Oracle). Best of breed solutions integrate with your core HR systems, such as payroll, whereas the monolithic vendors offer talent management and core HR systems.
You may have heard that bigger is better, or less risky, or more convenient. It’s time to set the record straight. Below are my top five myth-busting truths to help you make an informed software decision:
Myth: Larger providers are more secure and reliable.
Be careful about making this assumption. With organisations like Equifax and LinkedIn having had major security breaches in recent years, you would be well within your rights to be cautious when evaluating any software vendor. But security breaches among such well-known brands says to us that “monolithic vendors” are just as susceptible to attack as smaller vendors. Going with one vendor who can handle all of your HR needs might seem logical, but your risk profile increases significantly by putting all your eggs in one basket.
On the flip side, best of breed talent management solutions actually reduce the risk of working with a vast number of HR technology providers by integrating them into their ecosystem. This means applicants and employees aren’t managing multiple passwords for the different systems that you use. Plus, most monolithic vendors don’t always integrate as quickly with external vendors which means you could have data being transferred insecurely from the vendor to your HR team.
Suffice to say that you should do your due diligence, but, know that best of breed vendors are just as security conscious as monolithic vendors.
Myth: A larger provider will give me more integrated vendors to choose from.
This is highly unlikely. The number of startups providing HR technology is at an all time high, and to give you an idea of the activity, there were 402 deals worth $2.2B in funding in 2016 alone. Best of breed talent management vendors can move quickly to tap into this growing ecosystem and provide your HR stakeholders with the latest technology for attracting candidates and engaging candidates. However, large vendors don’t specialise – instead they purposefully house as many pieces of software as possible to try and meet a client’s needs (regardless of how well these pieces of software fit together). This means the likelihood of a large vendor integrating with all of your local and niche vendors is rare. They’re more likely to only invest in the highest volume providers, or only provide support for aggregator vendors.
Whereas best of breed talent management vendors make it a priority to integrate with the best HR technology, localising by country, and providing the APIs to work with a diverse ecosystem.
Myth: Large providers are one platform so integration overheads are removed.
Watch out for payroll sold as “SaaS” (but it isn’t actually SaaS). Instead it’s the integration between a monolithic vendor’s cloud service and their on-premise HRIS, and versioned “SaaS” deployment – the last thing you want on the cloud. With the volume of acquisitions and mergers in the Human Capital Management (HCM) space over the last 10 years the large vendors have a lot of catching up to do when it comes to the integration between their purchases. The reality is that an integration between your on-premise system and cloud talent management software from the same vendor actually requires the same effort to integrate with best of breed talent management. You might also be forgiven for thinking that you get a better experience with a large provider, but under the covers you’ll likely find it’s not such a seamless experience after all. For best of breed providers it’s essential we make sure that candidates, employees, managers, and HR users all have a great user experience no matter if they’re transitioning between the modules of a talent management suite or off to another system.
4. Business Managed Software
Myth: Implementing and maintaining a talent management platform needs a lot of IT resources.
Actually, it doesn’t. It’s commonly known that monolithic vendors make their money from consulting, as well as from all of the add-on services that they could possibly sell you (configuration, training, optimisation etc.). This means that the configurability of their platforms is often lacking, forcing you to have pay a premium for their services to get anything done.
For best of breed vendors on the other hand, it’s in their interest to make sure that you’re empowered to get a maximum return on investment from your platform. After all, if you don’t like the service or the product, it’s a lot easier these days to switch from one provider to another without having to invest in a six month project team. Implementation timeframes now are really driven by how much configuration you actually want to do. Many providers have the most common workflows, forms, communications and other configuration templated for you, so you can just tweak some settings and launch the system. Even if the change management department within your business turns a six week implementation into three months, as sometimes happens, that’s still less than your average large vendor implementation timeframes.
Your subject matter experts and ‘Super Users’ need to be involved, but the typical best of breed implementation uses very few IT resources. The only time IT needs to be involved is when integrating with your other systems, or getting a careers site hooked up to your corporate website.
5. Agility and Flexibility
Myth: A monolithic vendor has more people so they will be able to serve me better.
Don’t be fooled by headcount. Size is not a pre-requisite for quality service. Monolithic vendors have many priorities and are generally much less flexible when it comes to tailoring a solution to your stakeholder’s specific needs. Consider whether your HR team can actually influence the roadmap of a large vendor, or if you needed action fast. Could you get the CEO on the phone? Best of breed talent management gives you access to fast-paced organisations that can partner and innovate alongside you. Yes, sure, with monolithic vendors you can get premium account management, but it comes at a cost, often not included in the pricing you’re comparing with a best of breed offering. Your HR stakeholders will thank you for selecting a vendor who can truly drive great outcomes through the marriage of technology and an intimate understanding of your talent processes.
If you are interested in reading more about these topics, here are our helpful resources:
- Vendor risk management: https://authentic8.blog/five-vendor-risk-reports-every-it-leader-should-read/
- If you’re concerned about any of the mentioned high profile breaches, you should check your details here: https://haveibeenpwned.com/.
- Further reading on APIs: https://medium.com/pageup-tech/towards-modern-integrations-9d320b8f81dd
To see how PageUp stacks up against other best-of-breed and ERP solutions, reach out to our team of solution consultants who can help you make an informed comparison.