Whitepaper One Size Doesn t Fit All:

Whitepaper One Size Doesn t Fit All: 4 questions HR technology buyers should ask before making big buying decisions

INTRODUCTION What you see isn t always what you get with HR, talent, and learning software. Did you know that, even with the rigor frequently put into selection, two-thirds of HR software projects fail to produce at least half of the expected benefits? 1 Or how about that a recent research project from Clarkson University determined that there was no link between HR software and HR s ability to be more strategic? 2 Even though HR technology is often sold as best practices in a box, looks can be deceiving. That s not to say that HR technology can t benefit your organization. It s that too much technology tries to apply solutions broadly using those best practices that may or may not actually meet your needs. As one of the authors of the Clarkson study put it: Best practices will, at best, only let you perform as well as the other organizations that use them and sometimes not even then because best practices may not work for every organization. 3 One-size-fits-all solutions aren t going to fit the needs of most organizations, especially when those organizations are looking to create a competitive advantage through their talent. To really meet its promise, HR software must do more than just improve efficiency. Buyers today expect these systems to transform their talent strategies and help them achieve strategic outcomes. However, many buyers make their decisions based on product demonstrations from sales people, where they only see the software in its best light and under extremely controlled conditions. To avoid being duped by pretty demos of software with no substance and find a partner that can meet the hidden complexities that exist in your unique processes, you need to ask the right questions. 1 Panorama Consulting. 2 http://www.hreonline.com/hre/view/story.jhtml?id=534354879 3 Ibid. 2

WHY ARE BUYERS DISSATISFIED, ANYWAY? A sad fact about HR technology is that many buyers and their customers are unhappy with the solutions and the results. For example, nearly 80% of executives are dissatisfied with talent management support 4, and 67% of people don t think HR technology helps them do their jobs better. 5 The roots of this dissatisfaction can be traced back to expectations that were set in the sales process and then unfulfilled during delivery. It s little wonder that Bersin by Deloitte research shows that 24% of HR buyers are considering replacing their software vendor. When asked which areas fell short, hundreds of HR professionals pointed to specific functional shortcomings: 28% Software is not sufficiently configurable 26% Software is difficult to deploy, upgrade or maintain 23% Software does not integrate well with solutions from other business units (e.g., finance, supply chain) 17% Software is not sufficiently scalable 16% Software is not user friendly or is difficult to use 6 14% Software is not capable of handling the complexity of my workforce In most instances, it s not that buyers didn t ask about criteria that were important to them, such as configurability or capabilities. Instead, buyers aren t getting what they think they re getting. When a buyer asks about configurability for a critical need, they re told that it s covered by a built-in best practice. 4 The Hackett Group. 5 SumTotal Survey of 398 HR Technology Buyers. 2012. 6 SumTotal Survey of 398 HR Technology Buyers. 2012. 3

GETTING WHAT YOU WANT AND NEED How can you find the right solution for your organization? Unfortunately, it s too easy to buy HR technology that really doesn t do what you need it to do. You should go beyond tell me to show me, and be prepared to ask the right questions when you re sitting in the room with a software vendor s sales and product people. You can t always take what they say at face value. After all, they don t know your organization or what you re trying to do as well as you do. In fact, the things that make your organization and its people great are often the things that are different. You must dig a little deeper and ask the right questions. To help you avoid these mistakes, here s a list of four questions buyers wish they had asked before buying the wrong HR solution: Question 1: Which of your customers have challenges similar to my organization s, and how have they solved those challenges? Before you even sit down for a software demonstration, you and the vendors you are evaluating should deeply understand the strategy driving your potential software selection. Do you need to manage compliance-related training and reduce risk? Do you want to pay based on performance and increase retention of your best people? Do you need to implement succession planning for critical roles to ensure availability of the right talent? Or are you looking to increase productivity across the board? What you are trying to accomplish with your strategy should be the most important consideration in choosing your technology. Ensuring that the vendors you evaluate have experience in achieving similar strategies with similar organizations is an important first step. But remember, achieving competitive advantage means doing things differently, so don t be afraid to explain the nuances of your organization. TIP: Compare apple to apples. What s your strategic need? Connecting learning and development to performance management? Finding the best talent for your most important initiatives? Getting more productivity from your workforce? If you need to implement career development for five different employee groups, you ll likely need software that can handle each group a bit differently. Whatever it is, ask for examples of ways the vendor helped solve similar or identical challenges in similar or identical environments. Even companies with a few hundred employees can have needs as challenging as a multinational enterprise, and best practices may not be able to account for all of the variables specific to your capability and configurability needs. 4

Question 2: How will you address the specific needs of my people? Keep this in mind as you sit down to meet with an HR software company. You ll likely see a smooth, well-choreographed product demonstration that shows the best of that vendor s product. This is the point where you need to get specific with them. Ask targeted questions about your requirements. For example, compliance-related training will certainly vary from industry to industry but also within industries, by location and between workforce groups (full-time/part-time, exempt/non-exempt, union/nonunion, job roles, etc.). In a healthcare setting, continuing education requirements for licensed professionals, such as registered nurses and radiology techs, will be different from housekeeping staff or administrative personnel. Workflow, assessment and manager signoff requirements can differ in significant ways. HR software should be able to handle all of these variations, exceptions and requirements. However, that s not always the case. You might have two or three different groups or you might have hundreds. Things can get complicated, even with two or three different employee groups. When a large global energy company adopted new learning management software, one of its basic requirements was delivery of different course completion timelines, assessments, and final manager signoffs for three different employee groups. When it chose a wellknown vendor for its solution, the selection team was told that meeting the requirements was easy. During implementation, however, the company found out that it was anything but easy. In fact, creating different requirements for different user groups wasn t even possible. Unfortunately, this happens more often than you might think, with the reality of implementation often not matching the vision painted during the sales process. Make your potential partners prove that they can meet your unique needs, and don t underestimate the uniqueness of your environment. The right thing for you may mean doing things differently from everyone else. 5

Think of all the different people in your organization. Generally speaking, you have one group your people. Of course, your people includes executives, managers and employees. There are different categories and classifications within each group: full-time and part-time, exempt and non-exempt, different tiers of management, and employees at different locations. Some work in an office, and some work in the field. All of your people are responsible for delivering different things to the organization, which means each person needs a different type of support from you to be effective: Executive leadership: Can your CFO and COO forecast and proactively address current workforce management needs? Can they model the domino effect of closing talent gaps so they can plan for future workforce needs? Your leaders need specific, actionable recommendations about your workforce, not general best practices. Line managers: A manager in a finance department has different needs from a manager on an assembly line. They both may need to align goals, access employee information and assign training, but an office environment and a factory floor are vastly different. Can one software system accommodate both of these managers? TIP: Think different. Identify two employee groups that may have very different needs, requirements and capabilities. Ask the vendor how it would support the specific needs and address the unique challenges of each group. For example, in a consumer package goods environment, employees who manufacture food items that are subject to FDA guidelines would not have the same training and compliance requirements as employees who load trucks. Employees: Some employees have access to computers, some don t. Some need a bunch of data to make decisions, some don t. All have different profiles and capabilities and need tailored interventions to be as effective as possible. The software you choose needs to be flexible enough to help them do their jobs better while they are doing them, not just automate occasional tasks that they see little value in. Employees need the ability to access relevant information within the context of their work, whether they work in a corporate office, a retail store or a distribution center. When HR software actually helps people be more productive and increase their capabilities, we call it Talent Expansion it s been proved to drive significantly better adoption and results than traditional HR technology. HR software should help people be better at their jobs while they do them. General HR software that tries to fit everyone s needs often doesn t fit anyone s. 6

Question 3: How will your analytics and reporting support my organization with real-time decision-making? Any HR technology buyer today should ask specific questions about analytics and reporting. Recent research from the Harvard Business Review shows that lack of workforce analytics data and technology is limiting the effectiveness of talent and learning initiatives. In light of this, it s not surprising that purchases of workforce analytics solutions will almost triple in next three years, according to research from CedarCrestone. 7 When it comes to analytics and reporting, you should base your evaluation on integration and accessibility 8 with three things in mind: How easy is it to access crossfunctional data? Transactional TIP: Dive deep into specifics reporting is easy for most software; about data integration and anyone can tell you that 500 people completed a performance review. But can your HR software show you that closing competency gaps on your team accessibility. Take time to understand how a software provider handles data. Not all systems are equal. Look for HR Master Data Management (MDM) through specific development activities capabilities that help you maintain will actually improve the overall security and make sense of all of your performance of the team? data, even when it s coming from How easy is it to access crossplatform data? Combining HR data multiple systems. Many software providers only integrate easily with their own solutions or preferred with other enterprise systems is quickly partners. Ask specific questions about becoming must-have functionality. ease of systems integration and data However, for most HR software, reporting capabilities with systems combining people data with information and data that aren t from that vendor. from other enterprise systems, such as CRM, financials, and operations data, is next to impossible without difficult, risky, and resource-consuming systems consolidation initiatives. When data can be accessed, limitations within dashboards and reporting tools often restrict the ability to track trends over time, much less understand what the data means. How easy is it to access information from third-party systems? Lots of vendors can make promises that all of your data and analytics problems will go away if you buy all of your solutions from them. That doesn t help if you have technology that you aren t ready to replace. And it certainly doesn t help with popular third-party systems, such as LinkedIn, that are essential systems for many of your employees outside of your infrastructure. 7 CedarCrestone. 2012-2013 HR Systems Survey. 8 Ibid. 7

Workforce analytics are too important to the future of your organization to ignore, and you need software that makes it easier to put data in the hands of your people. How easy is it for everyone in your organization executives, line managers, and employees to access data and get recommendations on demand? Can software integrate easily with your other HR and enterprise systems? You should expect your HR software to make it easy to access relevant people and business information within the context of daily work whether it s accessed from a desktop system in your office or from a mobile device in the field. Question 4: How will we hold each other accountable for achieving the vision during implementation? If you re looking for the question that will make salespeople uncomfortable, this is it. In many fast-growth HR software companies, it s all about signing the deal and handing you off to a third party for implementation. It s easy to make promises if you know you won t need to deliver on them. Ask who is implementing your software. If it isn t the software company itself doing it, how much upfront guidance can you expect? You should probably start asking a lot more questions about the company s ability to meet your expectations. When you sign an agreement with a software company, the relationship should just be starting. Ask about what happens after the sale. What kind of support is available to improve processes, manage change, support organizational development, define metrics for success, and achieve those strategic goals you defined at the beginning of the relationship? TIP: Ask about what happens after the sale. Customer retention and Net Promoter Scores (NPS) are critical to understanding the real value others get in partnership with these vendors. Will you have a strategic partner to help with continuous improvements on your journey? Is the company you are considering a partnership with profitable and running its business like you run yours? Many software companies aren t, and if they can t run their business well, you can t expect them to help you run yours any better. If they re losing money today and putting all their focus on the front end of your relationship, what happens to their ability to support you down the road? 8

CONCLUSION Before you buy HR software, you should understand that your organization isn t like everyone else s. It s doubtful that a general one-size-fits-all solution or what you might see in a brief demo will actually fit your needs. Besides, how can you develop a competitive advantage if you re using the software the same way as everyone else? SumTotal gets it. In a world of sameness, you need something different. Instead of traditional HR software, we built Talent Expansion tools to help every employee in your organization be more productive. We ve developed solutions that easily configure to meet your unique needs and provide the right fit, and are still awesome to use and easy to implement. Our elixhr Platform is a different approach to systems integration and data management that makes it simple to get the real-time information you need. We re also the only provider to offer a full range of talent, learning, workforce and payroll solutions. We re committed to your success. We ve built our company to create sustainable value for our customers over the long haul because we like long-term relationships. As the independent market leader with more than 45 million users, we have plenty of customers to vouch for us. We ve been around for nearly 30 years, and because we run our business focused on your success, we expect to be around for a lot longer. Got questions for us? We re ready with answers. We take time to understand your business, your goals and how you define success. Visit, call 1-866-SMTOTAL (1-866-768-6825) or +1 352-264-2800, or email connect@sumtotalsystems.com. About SumTotal SumTotal Systems LLC, the largest independent provider of integrated human resources (HR) solutions, is increasing the performance of some of the world s most successful organizations, including AstraZeneca (NYSE: AZN[ADR]; London: AZN), Amway (KUL: AMWAY), and Seagate (NYSE: STX). The only HR solution provider to deliver Talent Expansion, a whole new approach to discovering, developing, and unleashing hidden potential within our customers workforces, SumTotal delivers employee enablement solutions that help organizations become great places to work. SumTotal s people-focused applications, available on premise and in the cloud, enable contextual, just-in-time development designed to advance employees skills and knowledge. Today, more than 3,500 organizations, including several of Fortune s Best Places to Work, rely on SumTotal s on-premise and cloud-based Talent Expansion applications to enable and empower their employees. For more information or to request a demo, please call 1-366-768-6825 (U.S./Canada), +1 352-264-2800 (international) or visit. 9