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Selecting and Contracting for HR Software and Systems Integrator Service

by Maribeth Sivak

New ISG research suggests that human resource (HR) enterprise buyers are increasingly focused on selecting and contracting for human capital management (HCM) software-as-a-service (SaaS) solutions. The expanding marketplace pits Workday against Oracle HCM Cloud and SuccessFactors and Ultimate against Ceridian DayForce and ADP Vantage, presenting a wide range of options for buyers. ISG has found that, in this confusing environment, buyers struggle to assess the alternatives and select the best fit HR software and systems integrator (SI). Can an independent sourcing advisor help you make the right choice?

Consider the following Top 5 contributions an outside expert can make in your selection and contracting process.

1. Align stakeholders on the future state. Selecting new software is often an exercise in getting people on the same page. If key stakeholders do not agree on the timing and direction of a software change, an advisor can provide an objective perspective on the HCM and SI market(s) and bring a structured approach to decision making.

2. Develop an HCM Request for Solution (RFS). You may need to rethink your plan if it involves issuing a Request for Proposal (RFP) that asks SaaS HCM providers to prove how well their solution delivers on your functional, technical and standard terms and conditions. An advisor can help you create an RFS or a pricing-only proposal that allows you to quickly “down select” and then gives providers a chance to demonstrate how their solution matches your business needs.

3. Create a financial business case backed by the “top of the house.” Don’t expect significant savings when comparing monthly subscription SaaS fees to the cost of a traditional ERP. Real savings come in avoiding upgrades, which means the business case must include at least one upgrade, extending about five to seven years. If this period does not work, an advisor can help build innovative approaches to quantifying savings into the financial business case.

4. Tap experts with SaaS contracting experience. Shared, multi-tenant cloud platforms are a revolution for IT, Finance, Procurement and Counsel. Ensuring early transparency around the SaaS business model can address a number of financial, contractual and operational barriers in the transition to the new delivery model.

5. Do away with allegiances to any one systems integrator. A transparent and competitive decision making process that engages a broad team of stakeholders will help you select the right SI partner. We recommend considering the SI’s bench of certified consultants, proposed team members, client references, past implementation scores, vertical knowledge, business process savvy and rates.

ISG is well positioned to support your company in evaluating cloud technologies tailored to your HR goals. Get more data-driven research on the AccessISGTM Sourcing Portal or contact Maribeth Sivak for strategic insight.

See ISG Research Finds Surging Demand for SaaS Solutions Among HR Enterprise Buyers.

You can also visit the ISG blog for HR Predictions for 2014.

About the author

Ms. Sivak is a Principal Consultant who advises ISG clients on all aspects of human resources service delivery. Maribeth brings over 15 years of experience developing and implementing strategic HR initiatives and best practices that drive enhanced business results and improve the capabilities of Fortune 500 and mid-sized global organizations. A background in human resources, finance and HRIT provides her with a unique ability to address the people implications of today's business challenges.