“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.


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


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.


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 questionHow 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.


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 questionWhat 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.


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 questionWhich 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.


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.


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