13 HR software buying mistakes to avoid
The HR system selection process is rife with the potential for mistakes. Learn about some of the most common ones and how the HR software buying team can avoid them.
Evaluating and selecting a new HR system is often a lengthy, detailed process. HR software buying teams need to understand common mistakes and how to avoid them.
Once the HR software buying team comes together, members can define the potential risks upfront and monitor them throughout the process to ensure that the risks are mitigated.
Here are 13 mistakes that can occur during the HR system buying process and tips on how to avoid them.
1. Having vague time requirements
Not confirming time commitments with stakeholders is common, but it will likely also lead to project failure. It's critical to ensure upfront that the evaluation team can devote the time needed to evaluate all software under consideration. It might be necessary to backfill some positions to help the core team clear their schedules for the task.
2. Going through the process alone
Even if the HR team knows what they want from a system, including IT in the process is key. Not doing so can lead to problems that can affect their ability to implement, integrate and support the HR system. IT brings critical technical and systems know-how, which helps ensure the new HR system can talk to other systems in the landscape. IT can also ensure that the system can be adequately maintained in-house.
3. Beginning the process without budget approval
Having a budget commitment before the process begins is important. A lengthy and time-consuming evaluation that doesn't result in a purchase due to an unapproved budget will be a waste of time and money and can also potentially damage HR's credibility. Vendors don't like to spend time and energy on a process that was never going anywhere.
4. Moving forward without clear buy-in from executive sponsors
Without executive buy-in, there is no guarantee of an approval or getting a budget. Likewise, it might not be possible to get the time commitment from critical stakeholders. This could lead to a bad decision or, even worse, no decision.
5. Having tunnel vision
Not looking at other vendor functionality that might bring unexpected benefits can be detrimental to the buying process. While an evaluation might start with an initial focus, HR should look at the rest of the software's processes and capabilities. Some unexpected, positive surprises or future capabilities might be uncovered that HR didn't realize the organization needed. It's possible these discoveries might redefine HR's strategy or the HR technology roadmap.
6. Making a hasty decision based on current needs
HR teams might only want to solve immediate problem areas, but not having a long-term HR technology roadmap might turn a current decision into the wrong vendor selection later on. Everyone on the team should understand the technology strategy to ensure the chosen vendor can support all of the department's requirements. HR might need to make small sacrifices now to gain functionality later.
7. Setting hazy goals
What is the organization trying to achieve from the evaluation, apart from selecting software? What challenges does the organization have that the vendor can solve? What else is HR trying to achieve? For example, maybe HR wants to establish itself as an important player in the organization or introduce self-services for the first time. Whatever it is, make sure goals are clear from day one.
8. Defining requirements without stakeholder approval
If HR does not define system requirements, the buying team will be unable to select the right system. The HR team should understand other stakeholders' system requirements and get approval so the buying team can select the software that serves cross-organizational goals.
9. Evaluating the software more than the vendor
The vendor is just as important as the software. If there will be a long-term relationship with the vendor, HR needs to evaluate the fit of that vendor and whether they can help support HR's success and deliver on their promises.
10. Asking the wrong questions
Vendors will often talk about how great their software is by focusing purely on its strong points and only showing the flashy parts, but it's important to dig into the nuts and bolts. Additionally, it is important to ask pointed questions about the vendor, their roadmap and their support during and after implementation.
11. Listening to a high-level sales pitch
All product demonstrations need to be defined based on HR's needs. Otherwise, the vendor will just show the most impressive parts of the system and often only from a high-level perspective. HR should expect to ask the vendor to customize the system to encompass HR's processes and usage requirements.
12. Looking at only a few vendors
While the buying team is likely to consider the big three HR technology vendors -- Oracle, SAP SuccessFactors and Workday -- there might be other vendors that are a better fit for what HR is trying to achieve. The team should evaluate a wide range of vendors initially, before narrowing the options to a shortlist of two or three vendors for deeper analysis.
13. Allowing bias for vendors to occur within the buying team
Some team members might have seen a great demo at a user conference or spoken to a friend that uses a particular piece of software. Team members might even show a particular bias toward one vendor or piece of software, despite evidence of one's suitability versus another. While it can be difficult to change this perception, it can be managed or even ignored.
Editor's note: This article was updated in July 2024 to improve the reader experience.
Luke Marson is a principal architect and part of the management team of a global SAP SuccessFactors consulting partner, where he focuses on SuccessFactors Employee Central, extensibility and integration technologies.
