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8 out of 10 regret their choice of HR system. This is revealed by a 2024 study from Gartner (2024 HR Technology Imperatives). This alarmingly high figure is particularly striking in light of organisations’ current investment focus, where HR technology tops the priority list. In fact, 89% of HR leaders expect to maintain or increase their technology investments.
Ending up with the wrong HR system can be a costly mistake. However, behind these challenging statistics lies an important insight: successful HR system selections follow a clear pattern. What they all have in common is that they are built on a foundation of thorough and organisationally anchored preparation.
The right choice of HR system should not only meet the organisation’s current needs but also support its strategic ambitions for the future. The decision is therefore not just about solving today’s challenges but also about ensuring a scalable platform that can grow alongside the organisation’s needs and the technological advancements of the market.
With this in mind, we provide you with a step-by-step insight into how proper preparation can make a difference when selecting the provider for your new HR system.
1. Maturity assessment
To establish the foundation for any successful system transformation, it is crucial to assess the maturity of existing HR processes, systems and data flows. Building this overview creates an understanding of the starting point and highlights existing pain points as well as the key focus areas for improvement.
Consider the following:
- How standardised and documented are our HR processes?
- How well do the existing processes support our HR, managers and employees?
- How capable are our current HR processes of scaling with the organisation’s growth?
- How accurate and reliable is our HR data?
2. Ambition and impact objective
Based on the maturity assessment, you should define your ambition for the new HR system. Establish concrete impact objectives for both the business and employees to ensure measurable value from the implementation. This involves a precise mapping of how the system should support your strategic goals and improve daily workflows.
Consider the following:
- What main issue should our future HR system help solve?
- How should our future HR system contribute to our strategic goals and business growth?
- How should our future HR system transform our business, and what behaviours should it encourage among our employees?
- What success criteria should our future HR system fulfill?
3. Market dialogue and inspiration
Based on your maturity assessment and objectives, you can benefit from exploring different solutions and best practices offered by vendors. This dialogue can provide both inspiration and an essential reference point for your subsequent needs assessment.
Consider the following:
- Which trends and best practices within HR systems could benefit our organisation?
- How important is user-friendliness versus the level of advancement in the HR system for us?
- How can either best-of-suite, best-of-breed or a combination of these best support our ambition?
4. Needs assessment and 'people' validation
A thorough needs assessment is essential to identify the specific features and capabilities your new HR system must have. By involving key stakeholders and end-users early in the process, you not only gain valuable insights into actual needs but also lay the foundation for successful change management. This early involvement fosters the ownership and buy-in that are critical for the system's future success and reduces the risk of resistance to change later in the implementation.
Consider the following:
- Which specific HR areas should have functional priority over others?
- Which specific features and capabilities are essential for our future HR processes?
- How can we involve key stakeholders and end-users to ensure that we have defined the right needs for our organisation?
- Which vendors qualify to be shortlisted and invited to bid on our upcoming tender?
5. Requirement specification and tender
Here, we move out of the preparatory phase, which now serves as the foundation for translating all identified needs into a detailed requirement specification. By structuring the requirements as user stories, you clearly define which user group’s needs are being addressed, the functionality requirements, and what the user should be able to achieve as a result. The requirement specification is then sent out to tender to the vendors you have identified as qualified to deliver the desired solution.
Consider the following:
- Which requirements should we define to serve as key components in realising our ambition?
- How do we select the right vendors to bid on and respond to our requirement specification?
- How should we prioritise and evaluate the different proposals and solutions from the vendors?
6. Vendor selection
Once you have received proposals and solutions from the vendors, the next step is to conduct a thorough selection process. This involves evaluating how well each vendor meets the defined user stories outlined in your requirement specification. The selection process should ensure that vendors are assessed based on the appropriate weighting and scoring system, designed with your ambition and impact objectives in mind. It is also essential that this evaluation is comparable across vendors to ensure that you select the right system solution, implementation approach and a future foundation that enables you to achieve the desired impact and support your organisation’s strategy moving forward.
Consider the following:
- How do the vendor responses align with our desired ambition and impact?
- How does the vendor's implementation approach fit our organisation?
- What would constitute a successful implementation for us?
Can we assist with the journey?
Have you been inspired to begin your journey towards a new HR system, or do you need further guidance on how a new system can make a difference in your organisation?
Then do not hesitate to reach out.