Today's guest blogger is Lisa Rowan,VP of HR Research for IDC.
End-to-end HCM solutions and the benefits they provide have generated lots of buzz in the market lately, especially in HR circles. But peel back the hype -- and the notion of the single-vendor solution is a myth that's just begging to be busted.
Unfortunately, no one offers a solution that covers everything HR needs from a software and services perspective. And no HR department I've ever talked to – including small employers – has a single-vendor solution covering everything. Some suppliers may offer large components covering HR recordkeeping, payroll, and benefits. Those are significant functions. However, there are lots of core HR functions left to be covered by specialists including time and attendance, workforce scheduling, COBRA processing, background checks, retirement benefits administration, tax filing, and many more. On the talent management front, there are options to get the full suite from a single vendor. Yet many companies opt instead to go for a best-of-breed approach with some solutions from one vendor and one or more from another.
As I wrote in last week's blog, the various talent functions are complex and the people who rely most on specialized functionality are choosing to hold fast to their best-of-breed systems. The latter mindset is particularly prevalent in recruiting and compensation. Both recruiting and compensation are complex and primarily serve a particular type of user that operates a bit out of the HR mainstream while also needing to serve more casual users.
Now some vendors are bringing forward end-to-end solutions that cover both the core HR AND the talent functions. While this approach gets closer to minimizing the number of systems in use, not all of the components of these solutions are as deep as those offered by a specialist. In some cases, components are acquired but not a fully integrated when it comes to the underlying data model, technology stack, or user interface. We also can't forget that there are still a whole set of HR functions not covered as mentioned above. Nor should we lose sight of the fact that many HR departments work with both cloud-based and on-premise systems. For this reason, integrating data and analytics across the suite – and the enterprise – is of primary importance.
All of this is to point to the fact that a single-vendor system is a myth. So what can HR do?
Seek out solution providers that have a strong integration philosophy backed by real world practices. In the age of cloud it should be easier to bring together disparate systems and data, so don't settle for solutions that can't bridge the gap. Focus instead on finding the right provider for the right solution. To that end, HR needs to look for supplier programs that:
- Support both cloud and on-premise solutions,
- Will work with any HRMS, ERP, talent management, or outsourcing provider,
- Can work across geographic locations to offer a single world view, and
- Demonstrate that the supplier "plays well with others."
I'll close with just a few facts from IDC research that support the assertion that a single-vendor HR solution is a myth.
- Fact 1: The typical Fortune 1000 firm utilizes 23 different HR systems or services.
- Fact 2: 40% of HR executives have no interest in an end-to-end solution.
The only way to thrive is to get it all your solutions working together as though they were one. Cloud will help but the software and services suppliers need to do their part. That includes debunking the myth of integration complexity, a driver of the single-vendor solution. As integration becomes a commodity, this is no longer a concern. For example, standards like web services ensure communication and data integrity, and managed services by vendors maintain loosely coupled applications to sustain their integration.
Editor's note: Interested in continuing the discussion about best-of-breed talent management software and integration into core HR? Visit us at Booth 2300 at HR Tech next week! Contact Jack Hill, PeopleFluent’s Director of Talent Acquisition Solutions, to schedule a meeting: email@example.com