Ranking “Decision Drivers” For Your Organization

June 29, 2012

HRchitect has been involved in approximately 2000 HR technology related projects for hundreds of companies of all sizes and industries across the world. We have gained tremendous insight (and continue to every single day) and feel an obligation to share our expertise, and our war stories, with you. After all, with 15 years in business behind us in working with many of today’s leading companies, we’ve gained a unique perspective on the very puzzling world of HR technology.

We’ve covered the benefits and rationale of Decision Drivers along with definitions of key Decision Drivers. Now, let’s talk about ranking them for your HR technology evaluation and selection project.

It is critical for the client project team to gain consensus on the relative priority of these drivers as early as possible in the selection process; doing so provides an “anchor” that will help keep project team members from being inordinately influenced by a particular package’s “bells and whistles.” Therefore, a Decision

Driver ranking exercise is one of the early stage deliverables in HRchitect’s selection methodology.

The ranking process generally takes place during a short series (generally 1-3) of on-site meetings or conference calls. Once the team understands what is included in each decision driver, the concept is to divide the twelve decision drivers into four main “levels” for consideration:

  • Exclude—these criteria are not at all relevant to the business (e.g., Global Capability may not apply to a US-only retail organization, Scalability may not materially affect a midmarket company)
  • Level 1 (Knock-out)—these criteria are so critical that they drive whether or not a vendor is even sent an RFI or RFP (e.g., Technology requirement is for a SaaS vendor, vendor must have HCM revenues in excess of $100M)
  • Level 2 (RFI/RFP/Demo)—these criteria are best assessed by evaluating vendor written responses and by viewing product demonstrations. All criteria in this level are weighted, usually on a 100 point scale.
  • Level 3 (Due Diligence/Purchase)—due to the need for the team in this phase to uncover more detailed information via reference calls, detailed financial discussions, and other due diligence tasks, there may be some initial Knockout criteria repeated here. This level is also weighed on a 100 point scale.

Below is a generic example of how a project team might rank the decision driver criteria:

Because ABC Company is based in the US, the project team excluded Global Capability from further consideration. Next, they determined the Knockout criteria (high level, but specific enough to drive the vendors to be selected). Level 2 criteria focused mostly on the capabilities of the software itself, with allocation of 100 weighting points. Finally, Level 3 criteria were defined—note the return of Vendor Viability and Cost, as more specific information is now available as a result of due diligence activities; note also that a number of other decision drivers appear here, as a more accurate assessment can be made based on the results of customer references.

This approach is typical of the majority of decision driver ranking exercises that

HRchitect does with clients, although the base process is often modified to include more or less detail per the desires of the client project team. Many HRchitect clients report a substantial benefit to having a 3rd party consultant involved with the ranking exercise due to the following:

  • A neutral 3rd party guide with no vested interest can help to surface and resolve political or “turf” issues that otherwise might derail consensus—resulting in a quicker ranking process with improved team dynamics
  • An outside perspective aware of current trends and capabilities of vendors in the market can provide expert fact-based commentary that supports the ranking process
  • Involvement by a competent 3rd party consultant who is able to testify to the impartiality of the process will often add legitimacy in the eyes of senior leadership.

We hope you enjoyed this series of blogs on “Decision Drivers” which described a leading practice methodology for incorporating decision drivers into an HCM technology evaluation project. While organizations may vary somewhat in the actual steps performed (as well as the sequence), the most important thing is that there is some form of decision driver ranking process conducted as a part of any HCM technology selection, and that it be completed early in the project in order to keep the team focused on the most important selection criteria based on the needs of the organization. Doing so will prevent a loss of focus by the project team, a potentially stalled decision making process, an undue focus on functionality and cost, and an inappropriate level of subjectivity. Using decision drivers to get the full picture of organization requirements will lead to a “best fit” package selection that has the greatest chance of meeting the firm’s needs over the long term.

It’s an extremely puzzling world out there. Many vendor offerings look alike, the vendor community is in a constant state of flux, and there is not a “one solution fits all”. HRchitect’s Decision Drivers process will help ensure you get the best-fit system for your needs, the first time.

As always, please let us know how HRchitect can assist you to get maximum benefit that comes from automating your Human Capital Management functions. We exist to serve you!

Matt Lafata
HRchitect

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“Decision Drivers” – Definitions, Part 2

June 22, 2012

HRchitect has been involved in approximately 2000 HR technology related projects for hundreds of companies of all sizes and industries across the world. We have gained tremendous insight (and continue to every single day) and feel an obligation to share our expertise, and our war stories, with you. After all, with 15 years in business behind us in working with many of today’s leading companies, we’ve gained a unique perspective on the very puzzling world of HR technology.

We’ve touched on how critical decision drivers are in selecting or replacing an HCM system. We’ve also talked about the rationale and benefits behind all of this. We’ve even touched on a handful of decision drivers themselves. Now let’s define some additional decision drivers.

Technology & Scalability—often a ‘knockout’ criteria (e.g., a vendor not able to satisfy the client standard is eliminated from further consideration), this item examines overall fit with the organization’s tech standards/conventions, and also assesses the strengths/ qualities of vendor’s technology strategy and infrastructure. From a scalability standpoint, does the software and vendor operational environment have the “horsepower” to meet the current and anticipated future processing volumes of your organization? Depending on the particular functionality being selected, specific measures range from requisition and applicant volumes to the number of worker records and user counts. Prospects should also look at the bandwidth of the vendor hosting center as well as the performance of the software to identify possible bottlenecks.

This criterion is often assessed via the RFI or RFP earlier in the evaluation, and then confirmed at either a technical breakout session during the demo or a follow-up technical review meeting. Scalability is also confirmed via customer reference calls.

Service and Support—Of primary importance in this category is the breadth and quality of the vendor’s professional services offerings as well as the customer-facing support functions. Prospects should look at the size/tenure/hours of support staff, the vendor’s implementation methodology, and especially how vendor liability is defined within the service level agreement (e.g., issue escalation/resolution process). If the solution is hosted by the vendor, then another set of criteria must be weighed, including the hosting facility security (access to buildings, access to data, extent of background checks of staff), data backup and disaster recovery procedures, and compliance with prospect hosting site standards. Much of this information can be gathered during the RFP phase, but it is essential for vendor references to address these questions during the contracting/due diligence phase.

Global Capability—As one might expect, this decision driver addresses the extent to which the vendor software supports multiple languages, currencies, and/or country-specific legislative and regulatory requirements. It is important for you to understand any current and potential future plans your organization may have for expanding into additional countries in order to give proper weight to this criterion. Also included in this area are Safe Harbor Certification, data privacy regulations, data center requirements, and any country-specific legislative support (e.g., Sarbanes Oxley, Basel II, HIPAA). While statements of compliance can be gathered during the RFI/RFP phase, references from global customers are key to accurately determining the level of compliance.

Cost/ROI—always important, the focus on cost has certainly increased during the economic downturn, as firms scrutinize every potential investment to the nth degree. In most cases this criteria reflects the total cost of ownership for the solution over a multi-year period (three and five years are the most common time periods). Often part of this criterion is cost allocation—how the cost of ownership will be shared between the client’s various business units/companies (e.g., chargebacks). This rating normally includes software purchase or rent price, hosting or subscription fees, implementation services price, client resources needed during implementation and post-implementation, hardware, and any other third party costs.

Functionality- Package functionality is generally given an overall priority compared to the other decision drivers at the beginning of the project; however, most organizations break this criterion down into the various functional areas to be covered by the application (see sidebars for representative examples of functionality for three major HCM technology areas). No matter the type of project, there is almost always a priority order of functionality, driven by major organizational “pain points.” Therefore, any project team is likely to have to prioritize the most critical functionality that will drive system selection.

So there you have it. All of the key decision drivers covered and in the final segment, the next blog, we will talk about ranking these decision drivers. HRchitect’s Decision Drivers process will help ensure you get the best-fit system for your needs, the first time.

As always, please let us know how HRchitect can assist you to get maximum benefit that comes from automating your Human Capital Management functions.

Matt Lafata
HRchitect

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“Decision Drivers” – Definitions, Part 1

June 20, 2012

HRchitect has been involved in approximately 2000 HR technology related projects for hundreds of companies of all sizes and industries across the world. We have gained tremendous insight (and continue to every single day) and feel an obligation to share our expertise, and our war stories, with you. After all, with 15 years in business behind us in working with many of today’s leading companies, we’ve gained a unique perspective on the very puzzling world of HR technology.

We’ve touched on how critical decision drivers are in selecting or replacing an HCM system. We’ve also talked about the rationale and benefits behind all of this. Now let’s define some of these decision drivers.

Vendor Viability & Interactions—the best software functionality in the world doesn’t help if the vendor is not around to support and enhance the application. Viability is usually an aggregate rating composed of the following elements: Financial status of company (such as funding, cash position, burn rate, profitability), market position, strength of product landscape/road map, vision, execution, and channels/partners. Potential metrics supporting the ranking may include client wins in recent quarters, number of customers, number of employees, or likelihood to be acquired. There is also a subjective analysis of the vendor’s culture and what kind of a partner they will be. In addition, the project team should take advantage of the company CFO and his/her staff’s expertise to help assess the financial health of the vendors being evaluated.

Ease of Integration/Interoperability—regardless of the scope or extent of the application under consideration, it will need to connect with other HR and enterprise systems. Even though there has been some general progress in building better integration frameworks and enabling technologies, most organizations still underestimate the cost and time needed to integrate these systems, which suggests that the criteria should be given a higher priority. The criteria rating should include an assessment of the application’s integration framework, Application Program Interfaces (APIs), and ease of integration with 3rd party applications. In addition, this category examines the extent to which the vendor has implemented services-oriented architecture (SOA) to enable/increase interoperability.

Package User Experience—the rapid emergence of easy-to-use social networking and commercial applications has increased the importance of this criterion for most organizations, especially those that have a higher percentage of younger workers that are “digital natives.” Overall user experience is usually determined by demo script hands-on scoring, results of any “sandbox” or “conference room pilot” usability testing, and reference feedback. How intuitive is the system? What is the number of clicks required to complete a transaction? How easy is it for end users to navigate through the system? Are the screens cluttered or clean? Can the application appearance be configured to reflect the client style guide? How much training per client role will be required?

For HR functional administrator roles, operational effectiveness is a key component of the user experience; this assesses the impact the vendor application will have on the staffing and running of the HR function(s) covered by the software. To what extent does the system impact staffing (either reducing headcount needed to administer the software, or reducing the need to add staff as the organization grows or adds more processes)? The best way to get an accurate assessment of operational effectiveness is via references of customers who have been using the vendor application for a while (more than a year) in order to avoid anomalous feedback based on inexperience with the new software and/or processes.

Package Configurability—This criteria addresses the ability of the software to make changes in application panels / pages, workflow, user-defined fields, and reporting without customization. How robust is the system administration “workbench” for end users, and how self-reliant can the client ultimately become from vendor resources? Prospects should assess the comprehensiveness of the configuration parameters for the system in order to determine how much of the system can be tailored to their requirements without impacting system upgrades.

A critical aspect of configurability is business segmentation, the degree to which the vendor’s software architecture can meet the prospect’s multi-company or multi-division requirements. A good example of this would be an organization where some regions require review and approval of performance appraisals by HR, while others require only manager and next level supervisor approval. Evaluation of business segmentation should focus on how easily process nuances are accommodated in the application, and how process differences are tracked and monitored within the system.

Overall package configurability is predominantly assessed in the Request for Proposal (RFP) /demo phases (ultimately by hands-on demonstration) and confirmed by reference calls. Data on business segmentation can also be gathered during the Request for Information (RFI) / RFP process, but whether or not the software truly passes muster in this area is generally revealed during vendor demos and follow-up discussions as a part of due diligence.

Confusing? Perhaps but if you follow the process (and those that we will present in the next blog), as well as utilizing HRchitect to assist, you’ll be in great shape. HRchitect’s Decision Drivers process will help ensure you get the best-fit system for your needs, the first time.

As always, please let us know how HRchitect can assist you to get maximum benefit that comes from automating your Human Capital Management functions.

Matt Lafata
HRchitect

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“Decision Drivers” – The Rational and Benefits When Evaluating and Selecting Human Capital Management (HCM) Technology

June 12, 2012
HRchitect has been involved in approximately 2000 HR technology related projects for hundreds of companies of all sizes and industries across the world. We have gained tremendous insight (and continue to every single day) and feel an obligation to share our expertise, and our war stories, with you. After all, with 15 years in business behind us in working with many of today’s leading companies, we’ve gained a unique perspective on the very puzzling world of HR technology.

In the previous blog, we touched on how vital the use of Decision Drivers can be when selecting or replacing a system. So let’s dig a little deeper before we start defining some of the different decision drivers that HRchitect recommends.

HCM system selections have significantly increased in complexity over the last ten years due to the expanding scope of functionality covered by packaged software, the increased maturity of the industry, and the sheer number of vendors and solutions in the HCM market. Depending on the detail desired by the project team, the number of functional requirements alone can range from hundreds to thousands, and it is too easy for “requirements analysis paralysis” to bog down the selection process. Taking the decision drivers approach provides an effective means to more objectively and systematically conduct a selection process, as it allows the team to take a step back from hundreds of defined functional requirements and apply the “80/20” rule (e.g., spend 20% of effort to gather the most important 80% of the total set of requirements). It also promotes the Rule of Proportionality—spend the greatest amount of time defining and analyzing the most critical, differentiating requirements (of all types) rather than trying to capture every single functional requirement.

Decision drivers should be developed very early in the critical path of any HCM system selection project, generally during the Project Definition or Strategy Development phases. It is important to document decision drivers and priorities in writing, as it is a form of contract between the project team and the rest of the enterprise. Once documented, it is critical to get formal agreement on priority from the core project team, steering committee, and project sponsors or “champions.” Decision drivers, if defined early in the evaluation process, will yield a more rapid team consensus through all the evaluation steps, and their use greatly increases the chances of a unanimous purchase decision. It also provides the rigor of a formal methodology, as the software evaluation is not over until the project team has enough information to rank each decision driver for each vendor.

The decision drivers approach provides the following benefits:

  • A fact-based, objective process for HCM technology evaluation
  • Greater depth of fit with a broad scope of organizational requirements
  • Better user buy-in across all of the roles in the firm
  • Potential for increased product longevity due to depth of fit
  • A more complete realization of the project’s Return on Investment (ROI)

Depending on how a firm might break these decision drivers down, there are about 10-12 that should be utilized. In no particular order of importance, we will tackle several in our next few blogs and have categorized them as follows:

  • Vendor Viability and Interactions
  • Ease of Integration/Interoperability
  • Package User Experience
  • Package Configurability
  • Technology and Scalability
  • Service and Support
  • Global Capability
  • Cost/Return on Investment (ROI)
  • Functionality

Yes, it’s an extremely puzzling world out there and the selection of a new or replacement system may seem daunting. Many vendor offerings look alike, the vendor community is in a constant state of flux, and there is not a “one solution fits all”, despite what others may tell you. HRchitect’s Decision Drivers process will help ensure you get the best-fit system for your needs, the first time.

As always, please let us know how HRchitect can assist you to get maximum benefit that comes from automating your Human Capital Management functions.

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Decision Drivers: Vitally Important When Evaluating and Selecting Human Capital Management (HCM) Technology

June 5, 2012
 
HRchitect has been involved in approximately 2000 HR technology related projects for hundreds of companies of all sizes and industries across the world. We have gained tremendous insight (and continue to every single day) and feel an obligation to share our expertise, and our war stories, with you. After all, with 15 years in business behind us in working with many of today’s leading companies, we’ve gained a unique perspective on the very puzzling world of HR technology.

I hope that you enjoyed the series of blogs around successfully executing the Integrated Talent Management (ITM) concept, the holy grail for many organizations, if you will. It’s a proven seven-step process that encompasses Philosophy, Strategy, Science and Measurement, Process, Technology, Implementation, and Sustainability. Sure you can probably hobble along without following this methodology, and possibly even have success, but why chance it? Let us help you ensure the greatest of success so that you look like a hero to the rest of the organization both today and for many years to come.

So let’s say you have gone through the first four steps (or maybe you haven’t and won’t be for whatever reason) and you are ready to choose Technology, whether it be a core HR system, Talent Acquisition, Talent Management, Workforce Management…basically any kind of Human Capital Management system. As you have heard us say many times, it’s a major investment that you and your organization are going to have to live with for at least a few years. Again, don’t leave it to chance. Spending some time and money up front with the experts from HRchitect could save you countless dollars and much heartache. Trust us, we’ve seen some real messes that we’ve had to go in and clean up. Don’t be one of those horror stories!

HRchitect’s vast experience in this area has revealed that a singular focus on feature/function requirements can result in a flawed software selection process, and ultimately an implementation that does not deliver value to the organization. There are a number of other criteria that a project team should factor into the overall evaluation to ensure a more balanced view of the available vendors; one of the team’s first tasks should be prioritizing these “decision drivers” based on their organization’s unique characteristics, strategies and priorities. While specific decision drivers may vary by organization and by the technology being evaluated, we will discuss, through a series of blogs, why decision drivers add value to HCM software selection projects, provide definitions for many of the most commonly used decision driver criteria, describe the major benefits that accrue from decision driver use, and outline a methodology for ranking and utilizing decision drivers throughout a typical HCM technology evaluation project.

While organizations may vary somewhat in the actual steps performed (as well as the sequence), the most important thing is that there is some form of decision driver ranking process conducted as a part of any HCM technology selection, and that it be completed early in the project in order to keep the team focused on the most important selection criteria based on the needs of the organization. Doing so will prevent a loss of focus by the project team, a potentially stalled decision making process, an undue focus on functionality and cost, and an inappropriate level of subjectivity. Using decision drivers to get the full picture of organization requirements will lead to a “best fit” package selection that has the greatest chance of meeting the firm’s needs over the long term.

It’s an extremely puzzling world out there. Many vendor offerings look alike, the vendor community is in a constant state of flux, and there is not a “one solution fits all”. HRchitect’s Decision Drivers process will help ensure you get the best-fit system for your needs, the first time.

As always, please let us know how HRchitect can assist you to get maximum benefit that comes from automating your Human Capital Management functions.

Matt Lafata
HRchitect

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Executing Integrated Talent Management (ITM) – Step 7: Sustainability

June 1, 2012

HRchitect has been involved in approximately 2000 HR technology related projects for hundreds of companies of all sizes and industries across the world. We have gained tremendous insight that we love to share with you so that you can benefit from the experience, and the lessons learned from others. With 15 years in business behind us in working with many of today’s leading companies, let us best position your company for a successful future with Talent Management Systems!

Successfully executing the ITM concept requires a holistic approach that includes embracing ITM as a philosophy, developing a strategy, applying science & measurement disciplines, breaking down process barriers, selecting and implementing enabling technology, and sustaining the new solution over time.

Seven previous posts around this subject have given you an overview of our seven-step process for a successful approach to ITM and covered the first six steps – Philosophy, Strategy, Science & Measurement, Process, Technology, and Implementation. Now we move on to the final step, step #7, Sustainability.

Step 7 –

Sustainability

Fundamental question: How do we maintain and evolve the solution to adapt to changing business and HR needs?

So, the new solution is live – Hooray! However, you can’t afford to rest on your laurels, because your business is not standing still. The pace of change is ever increasing, and now the issue will be determining the best way to keep moving forward – how to optimize processes, drive user adoption, and increase the ITM solution’s impact on business results. HRchitect recommends the following to enable Sustainability:

  • Plan and budget for the evolution of the solution on a regular basis – if you’ve just implemented a SaaS application, expect that there will be a steady stream of new features available in the package. Not all of these capabilities will be relevant to your business, and it will be an exercise to determine which features to include in your own “upgrade” based on which user roles are impacted, the ability of those roles to absorb further change, and the impact of other HCM or enterprise deployments
  • Selling the system to users does not go away a few months after “Go Live.” You must develop and execute an ongoing marketing plan that continues to extol the benefits of the application, describes pending changes, and highlights the experiences of “poster child” users.
  • Regularly update senior management on the progress being made, continue to educate them on the ROI of the project, and ask for their continued support.
  • Keep close to users and stakeholders at all levels of the organization, and build their feedback into the application roadmap. Develop a governance model that includes a steering committee that meets regularly to review the plan, prioritize issues, and re-allocate resources if necessary.

Conclusion

It is important to note that this seven step methodology for executing ITM focuses on business goals and objectives (the “What”) before addressing lower-level concerns like processes and technologies (the “How”). As a result, a firm can have multiple ITM technologies from disparate vendors, and still be executing a comprehensive ITM strategy. This broader, more inclusive definition is critical, given the state of the vendor marketplace that is attempting to fulfill the ITM vision of many organizations. For a more detailed view of current ITM market trends, see HRchitect’s companion report, “Integrated Talent Management Technology Trends 2012.”

As always, please let us know how HRchitect can assist you to get maximum benefit that comes from Integrated Talent Management.

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Executing Integrated Talent Management (ITM) – Step 6: Implementation

May 30, 2012

HRchitect has been involved in approximately 2000 HR technology related projects for hundreds of companies of all sizes and industries across the world. We have gained tremendous insight that we love to share with you so that you can benefit from the experience, and the lessons learned from others. With 15 years in business behind us in working with many of today’s leading companies, let us best position your company for a successful future with Talent Management Systems!

Successfully executing the ITM concept requires a holistic approach that includes embracing ITM as a philosophy, developing a strategy, applying science & measurement disciplines, breaking down process barriers, selecting and implementing enabling technology, and sustaining the new solution over time.

Six previous posts around this subject have given you an overview of our seven-step process for a successful approach to ITM and covered the first five steps – Philosophy, Strategy, Science & Measurement, Process, and Technology Now we move on to step #6, Implementation.

Step 6 –

Implementation

 

Fundamental question:  How do we deploy the new technology-enabled processes to achieve desired strategic outcomes?

Now that the technology has been selected, the real work begins. Once the implementation team has been established and preliminary product training is complete, the team should conduct a detailed fit/gap analysis, using the high-level process redesigns developed in the Process phase as a guide. The results of the fit/gap are then used to develop detailed process redesigns that fully leverage the strengths of the selected technology, as well as accommodate product gaps with “creative solutions” (e.g., workarounds). The Implementation phase typically includes a number of additional steps:

  • Deployment of development and testing instances or “zones” that can be used for conference room pilots as well as product configuration.
  • Design and development of integration to various 3rd party and enterprise applications.
  • Configuration of the technology based on the detailed process redesigns, including workflow routing, approvals, and embedded metrics/analytics.
  • Development of initial reporting, metrics dashboards, and analytics based on the measurement framework constructed during the Strategy phase.
  • Conversion of current and historical data – with the amount of historical data carefully determined based on business need.
  • System testing – individual component, process, and full system, followed by user acceptance testing to ensure conformance with detailed design
  • User training and change management activities to educate users on the new technology-enabled processes
  • Ongoing communication to project stakeholders and an internal marketing campaign to sell the benefits of the new system
  • Transition to live production, followed by a stabilization period, as users become accustomed to the new environment.

HRchitect makes the following recommendations to increase the likelihood of a good result during the Implementation phase:

  • Avoid the “big bang,” multi-function deployment plan where possible. Instead, pursue a “chunking” strategy over several years that starts with the biggest pain points currently being experienced by the organization. This will enable the proper allocation of project resources, and also help allay fears that the organization will not be able to absorb too much change at one time.
  • Project teams almost always underestimate the complexity of integrating the new technology to enterprise applications, 3rd party providers, and existing niche solutions. Therefore, carefully examine any vendor-provided resource templates to determine if additional resources should be added.
  • Firms chronically under-invest in change management, internal marketing, training, and application roll-out. Sometimes this is due to an optimistic view of the new application’s user experience (“We shouldn’t need to train managers because the system is so easy to use), and sometimes the budget for these items is plundered due to an overage suffered in an preceding component (e.g., Design, Configure, Test). Whatever the cause for the shortage, budget appropriately for these items and fight to keep the allocation by whatever means necessary!
  • Utilize dedicated project resources if possible, particularly for core team members. These are complex projects, and the organization can’t afford for this to be someone’s “night job.”

We’ll address the next and final step in successful ITM execution, Sustainability, in the next blog and please let us know how HRchitect can assist you to get maximum benefit that comes from Integrated Talent Management.

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Executing Integrated Talent Management (ITM) – Step 5: Technology

May 23, 2012

HRchitect has been involved in approximately 2000 HR technology related projects for hundreds of companies of all sizes and industries across the world. We have gained tremendous insight that we love to share with you so that you can benefit from the experience, and the lessons learned from others. With 15 years in business behind us in working with many of today’s leading companies, let us best position your company for a successful future with Talent Management Systems!

Successfully executing the ITM concept requires a holistic approach that includes embracing ITM as a philosophy, developing a strategy, applying science & measurement disciplines, breaking down process barriers, selecting and implementing enabling technology, and sustaining the new solution over time.

Five previous posts around this subject have given you an overview of our seven-step process for a successful approach to ITM and covered the first four steps – Philosophy, Strategy, Science & Measurement, and Process Now we move on to step #5, Technology (bet you thought we would never get there!).

Step 5 – Technology

 

Fundamental question:  What technology (or technologies) best optimize our ITM processes?

Armed with philosophy, strategy, science, metrics, and a high-level process redesign, the ITM project team can now develop the ITM technology strategy (e.g, the timing and sequence of ITM technology-enabled process changes), document requirements, and select the ‘best fit’ enabling technology (or technologies) for the organization. It is critical for the project team to focus on the real requirements of the business in order to avoid being led astray by the “bells and whistles” of vendor demonstrations (most of which end up never being implemented).

To that end, we recommend the following in this step:

  • Make sure that the ITM technology “tail” is not wagging the “dog” – the ITM technology strategy must be linked to the HR / ITM strategy, which itself should be linked to the overall business strategy
  • Ensure a balanced evaluation of all decision drivers developed in the Strategy step, not just functionality and cost. Other decision drivers include Vendor Viability, Ease of Integration/Interoperability, Package User Experience, Package Configurability, Technology & Scalability, Service & Support, and Global Capability – and it is important to conduct a ranking exercise as a framework for making the best technology decision (see HRchitect’s Decision Drivers white paper for a full treatment of this topic).
  • HRchitect advocates the use of scenario-based evaluations versus exhaustive checklist-style RFPs; scenarios of your critical ITM use cases will force vendors to explain how their application will meet your business needs, and not just the availability of a particular feature.
  • Those vendors that pass the RFP stage should be invited to a comprehensive product demonstration that is based on a script developed by the project team. This ensures an ‘apples to apples’ comparison of vendor offerings, and should be formally scored by team members.
  • Identified finalist vendors should be subjected to proper due diligence, including discussions of financial status, review of publically available financial data, customer reference checking, and negotiation to arrive at the chosen vendor package.

We’ll address the next step in successful ITM execution, Implementation, in the next blog and please let us know how HRchitect can assist you to get maximum benefit that comes from Integrated Talent Management.

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Executing Integrated Talent Management (ITM) – Step 4: Process

May 14, 2012

HRchitect has been involved in approximately 2000 HR technology related projects for hundreds of companies of all sizes and industries across the world. We have gained tremendous insight that we love to share with you so that you can benefit from the experience, and the lessons learned from others. With 15 years in business behind us in working with many of today’s leading companies, let us best position your company for a successful future with Talent Management Systems!

Successfully executing the ITM concept requires a holistic approach that includes embracing ITM as a philosophy, developing a strategy, applying science & measurement disciplines, breaking down process barriers, selecting and implementing enabling technology, and sustaining the new solution over time.

Four previous posts around this subject have given you an overview of our seven-step process for a successful approach to ITM and covered the first three steps – Philosophy, Strategy, and Science & Measurement. Now we move on to step #4.

Step 4 – Process

 

Fundamental question:  Which practices maximize process efficiency, effectiveness and business value?

Clearly, some level of process redesign must occur in order to maximize the impact of new technologies – otherwise it is very difficult to justify the cost, time and energy spent on the project. Guided by outcomes of the previous steps in the methodology, this phase examines the major ITM processes and assesses which integration ‘leverage points’ (data, process outcomes, metrics that can be shared between ITM functions) are critical to success. Some examples of ITM leverage points include:

  • Recruiting – ‘Resume’ data gathered on an applicant becomes part of the talent profile, where it can then be accessed by multiple ITM functions. Results of candidate assessments are used to build the initial learning plan and as a base for performance management.
  • Performance management – outcomes of an appraisal process can drive learning (performance gaps result in recommendations from the learning catalog to reduce the gap), compensation (ratings drive merit and bonus allocations) and succession planning (high performers may be flagged to participate in successor related activities).
  • Career development – based on the mix of data in an employee’s talent profile combined with career aspirations, an employee’s designated career path could trigger adjustments to learning plans as well as participation in a succession plan, or even an internal recruiting effort for a position on the employee’s career path.

The ultimate goal of the Process step is to develop high-level redesigned processes that are appropriately woven together to deliver improved business outcomes, more efficient / effective ITM processes, and the best utilization of enabling technologies. Note that HRchitect does not advocate detailed process redesign until the Implementation phase, when a detailed fit/gap analysis of the selected technology can be done; the project team should again apply the 80/20 rule and focus on a high-level redesign that is sufficient to drive selection of the enabling technologies.

We’ll address the next step in successful ITM execution, Technology (yes, Technology doesn’t happen until the 5th step), in the next blog and please let us know how HRchitect can assist you to get maximum benefit that comes from Integrated Talent Management.

Leave a Comment » | HCM, HR Systems, HR technology, Human Capital Management | Tagged: , , , , , , , , | Permalink
Posted by mattlafata

Executing Integrated Talent Management (ITM) – Step 3: Science and Measurement

May 10, 2012

HRchitect has been involved in approximately 2000 HR technology related projects for hundreds of companies of all sizes and industries across the world. We have gained tremendous insight that we love to share with you so that you can benefit from the experience, and the lessons learned from others. With 15 years in business behind us in working with many of today’s leading companies, let us best position your company for a successful future with Talent Management Systems!

Successfully executing the ITM concept requires a holistic approach that includes embracing ITM as a philosophy, developing a strategy, applying science & measurement disciplines, breaking down process barriers, selecting and implementing enabling technology, and sustaining the new solution over time.

Three previous posts around this subject have given you an overview of our seven-step process for a successful approach to ITM and covered the first two steps – Philosophy & Strategy. Now we move on to step #3.

Step 3 – Science

& Measurement

 

Fundamental question:  What tools and methodologies will enable us to best measure and predict outcomes?

Another critical element that is unfortunately often neglected or totally absent in ITM implementations is the application of the science of individual and organizational psychology to strategy, processes, and technologies. Note that it’s not just about the individual employee – their skills, competencies, performance, etc. – but also how organizational elements like culture, HR program effectiveness, and linkage to business outcomes can impact both individual and organizational performance.

One area where the application of science is extremely important is pre-hire assessment. Providers of scientifically validated assessments have partnered with many customers to demonstrate dramatic overall improvements in traditional HR measures. As an example, Kenexa (a leading provider of assessments) reports that one customer experienced 26% higher performance review scores and 40% fewer counterproductive incidents after an assessment was implemented for a key job category; another customer showed a direct improvement in customer satisfaction of 32% compared to the period before the pre-hire assessment was put in place. A retail customer of SHL (another leader in the assessment space) reports that associates that scored well on the pre-hire assessment sold on average $12 more per hour – a significant impact to the business when multiplied by the sales force of 6,000+ employees.

These examples show that the application of science to ITM processes can make a dramatic difference to workforce performance, and thus substantially improve business outcomes. Science can be applied in more than just the area of pre-hire assessments; it plays a key role in analyzing the impact of changes to process and technology and developing a ‘closed loop’ metrics feedback system, which leads us to the second component of this step – measurement.

It is not possible to overstate the importance of developing a strong foundation of measurement to support ITM. The HR function has historically been a laggard in this area, with a prevailing opinion that HR is “about people” and that “it’s just too hard to measure HR – it’s too soft.” We believe that this attitude is a cop-out, one that has its historical roots in the lack of analytical thinking skills resident in many early HR practitioners. Lack of understanding and expectations by senior business leaders has also been a contributing factor, and the dearth of user-friendly HR reporting and analysis tools has also had a part to play. Whatever the reasons for the lack of HR measurement in the past, it is clear that there is no excuse for this mindset moving forward. As one senior HR leader of an HRchitect client recently put it, “What gets measured gets done. We must continually strive to increase the measurement acumen of the HR function in order to increase the impact of HR program investments on business outcomes.”

In this methodology, the definition of the measurement framework is best accomplished via dialogue with stakeholders throughout the organization. We recommend that project teams conduct a role-based analysis to determine critical metrics. This usually results in a very large pool of potential metrics. Although it is tempting to try to ‘boil the ocean’ and give all roles everything, it is much more realistic to prioritize the metrics list based on the number of roles needing a given metric, impact to the business, ease of delivery, and other criteria. The result will be an initial subset of metrics that satisfy the 80/20 rule, and a plan for delivering extensions in phases over time.

HRchitect finds it useful to categorize metrics according to the following taxonomy, which is based on metrics complexity versus impact:

Figure 1 – HCM Metrics Taxonomy

 

  • Information Distribution – these HR metrics are simple, fairly easy to gather, and sent out to stakeholder roles periodically (e.g., standard reports)
  • Metrics Delivery (Dashboards) – as we move up the complexity scale a bit, this category includes ratios and graphical depictions of data delivered to a role; more sophisticated capabilities include the option to drill down to the underlying details from summary metrics.
  • Contextual Embedded Analytics – another step up in both complexity and impact, this category includes metrics and analysis that is embedded into the supporting technology in order to provide ‘just in time’ information needed by a role to make a decision.
  • Correlated Analytics – this category of metric takes data out of the HR silo and links it with enterprise financial and operational information to understand the impact of HR program investments.
  • Predictive Modeling – this “Holy Grail” of measurement is to use historical and current data to predict future results – this is the most complex of all measurement categories, but has the potential to deliver the greatest impact, once the organization is able to accumulate longitudinal data for robust trend analysis

To show how this taxonomy plays out in an ITM function, here is an example from Performance Management:

 

Figure 2 – Performance Management Metrics that Matter

Beginning at the bottom left are metrics commonly delivered via standard reports – useful, easy to gather, but more focused on the efficiency of this ITM process. Metrics in the middle of the chart are more commonly delivered via dashboards or embedded analytics, and move into the realm of effectiveness. Finally, those examples in the top right are related to correlation and prediction; complex to accumulate and analyze, but of great value in determining the impact on the business.

As an ITM project team works to identify the initial metrics subset and extensions, is it likely that the first delivery will have a higher ratio of efficiency metrics, as it will be important to deliver the standard data that roles are expecting. However, we recommend that at least some effectiveness and impact metrics be included (1 or 2 minimum per ITM function) in order to prove the value to HR and the business, and to build momentum for future delivery of the extensions to the measurement framework. In this way, the project team can team science with measurement to define critical organizational metrics for roles and stakeholders within the organization; this will ultimately drive improved linkage to business outcomes in subsequent phases.

We’ll address the next step in successful ITM execution, Process, in the next blog and please let us know how HRchitect can assist you to get maximum benefit that comes from Integrated Talent Management.

Leave a Comment » | HCM, HR Systems, HR technology, Human Capital Management, Talent Management | Tagged: , , , , , | Permalink
Posted by mattlafata

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