HRTech’s Evolution

On January 18, 2016, in HRExaminer, John Sumser, by John Sumser

photo of woman in office working on two computers in HRExaminer Article by John Sumser HRTech's Evolution Published January 19, 2016

John Sumser examines how HR Technology is evolving from a feature comparison checklist to one where purchase decisions are drifting towards cost, cultural fit, experience, and status.

 

There are at least three ways to optimize the relationship between an employer and an HR Tech vendor:

  • Complete laissez-faire (the software works and the customer has no substantial relationship with the vendor)
  • The Common Approach (if it’s important enough, the customer participates in user groups and conferences while developing one on one relationships in critical areas)
  • The Deep Integration (In the best of cases, customers use the vendor as an R&D Lab. The vendor does the same in return.)

It’s a complex arena that feels both simple and unfamiliar to the human beings who inhabit it. As mentioned last week, there is no particular training (on either side of the relationship) to help practitioners navigate this realtime, ongoing aspect of purchasing software and services in HR.

While it seems like it ought to be easy to distinguish individuals from the organizations they belong to on both the customer and vendor sides, it is not always an accurate reflection of reality. On one level, a vendor’s sales and support teams are composed of unique individuals who act on their own volition. On another (and simultaneous) level, they are simply representatives of their home organization. The same is true of practitioners. They are at once individuals and representatives of their home culture. In both cases, ‘representatives of their home organization’ is a term of art that understates the importance of membership within groups inside of home territory.

Each organization, vendor and customer alike, are dynamic settings with internal and external motivations that have nothing to do with the relationship, but drive it none the less.

The vendor sits in the midst of ecosystems of partners, suppliers, and support organizations. The simple act of making something happen often involves elaborate choreography among competing parts of the vendor system.

The customer, in all of its complexity, is also enmeshed in a sea of mission-centric relationships. Practitioners may seem aligned from the vendors perspective, while in fact, they are at odds with each other over internal questions. With so much complexity, it is delightful when something actually gets done.

Yet, there is still more fundamental complexity.

The product itself is some sort of technology that helps the customer execute some of the HR workload. (I’ll use the word product to describe the core deliverable in the vendor practitioner relationship.) The term suggests something more finite than software. Software has an organic aspect that involves its continuous improvement. That isn’t what most products are like.

Each technology has a series of Life-Cycle Elements that require differing expertise on both sides of the relationship. The Evaluation (purchasing/selling) team is rarely the same group responsible for Implementation. Neither of those two groups does the long term Operation/Support the Implementation. While some of support is concerned with refining the delivery of new customer requirements, the support teams are rarely the people who renegotiate the contract.

Those aspects include: Evaluation, Administration, Implementation, Training, Adoption, Operations/Support, Product, and the Overall Relationship. Each element has cost, schedule, quality, integration and execution implications.

In today’s operating environment, these features compose the elements of the cost (in time, people and money) of operating a piece of technology. But, it’s rarely the case that it’s managed as such. It’s even rarer that the total cost of ownership is even addressed in the purchasing process.

Instead, we continue to focus on comparative functionality.

In more mature industries, the focus of differentiation shifts once the core offering becomes a relative commodity. In cars, for instance, the sales process focused on performance variables for a very long time. A trip to the showroom always involved some level of collaborative grunting about things under the hood. Today, the sale is about status and the aspects of luxury included in the deal.

The same is quickly becoming true of software. Since much of the functionality delivered (and almost all of the functionality that is used) is the same, purchasing decisions are drifting towards cost, cultural fit, experience and status. We are in the early days of this unfolding.

 



 
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