Free DownloadHow to choose an HR software system in 2023: A complete guide
An HR system is one of the most important purchases an organization makes. Nowadays, the stakes couldn't be higher. The market for HR tools has exploded, and people management has become an urgent priority amid the disruption wrought by the COVID-19 pandemic.
This overview gets you off to a strong start. It explains all the key steps in setting up an effective buying process and identifies the HR software features that ultimately determine whether a product will meet your needs. The links in the guide take you to articles that provide more detail on important topics.
The HR software buying team: Roles, responsibilities, tips
Choosing the right HR software requires teamwork and forethought. Here's a look at which people to include in the evaluation and selection process and what their roles should be.
Including the right people on the HR software buying team is critical to a successful purchase.
Evaluating and selecting the most effective HR software can be a complex process, involving multiple stakeholders and bound by requirements that are mission-critical to a company's HR strategy. An HR software purchase can have long-lasting impact on people management and employee experience strategy success. It can also affect current HR systems architecture or future purchases. If the HR system or application purchase doesn't show the planned ROI, then getting funding for other HR initiatives and technologies may be difficult. The software's success or failure can even affect resourcing and budgets in other departments.
To that end, here's advice on putting together a successful buying team and considerations for purchasing the right software.
HR buying team roles and responsibilities
Usually, a sponsor or stakeholder will work to put the team together, but that can also be delegated to a senior HR professional, depending on how the organization is structured and how activities of this type are planned.
The HR software buying team should include key members of the HR team, members of the IT team and -- where relevant for the software that the team is selecting -- representatives from other departments. While HR will be the primary system user, IT will need to integrate the system during the project and maintain it after go-live.
For larger purchases, an HR or IT leader will need to be a key stakeholder or present to a C-level executive on how the HR software will benefit the organization, and they will need to get formal approval and funding before moving forward to the software evaluation stage.
Different buying teams will vary by number of people and types of roles, depending on the organization and the software under consideration. However, these are some typical roles that make up the HR software selection team and their responsibilities.
While HR will be the primary system user, IT will need to integrate the system during the project and maintain it after go-live.
Sponsor. The sponsor typically comes from company leadership and oversees the initiative from a strategic standpoint. They will make key decisions and may sit in on some of the important sessions, as well as the product demos. This person ensures the process follows the strategic goals and ensures that the team looks at the bigger picture. Usually, this is a chief HR officer (CHRO) or HR director, but this person may also be a CIO or CFO, depending on who in the organization drives systems projects.
Selection manager. This person runs the software evaluation process itself -- essentially, a project manager for the evaluation and selection process. They manage all parts of the process, keep a project plan, organize meetings and delegate tasks to the team members.
Selection advisor. Many software selection processes use a specialist adviser to help the selection team. This potentially could be someone internal but often is an outside consultant or consulting firm that specializes in advising on software evaluation and selection. Typically, the HR software buying team should expect this person to guide the team on topics such as structuring the process, creating a timeline, establishing the requirements and defining key questions to ask the vendor. They will also help to write the request for information and request for proposal documents to send out to vendors.
Subject matter experts. Depending on the different applications the team is evaluating, one or more subject matter experts will be needed to provide expert guidance. Depending on the application, this could be someone like a compensation and benefits manager, a learning and development specialist, a payroll manager or payroll processor, a recruiting manager or a succession planner.
However, the team could also include multiple people from one function. For example, if the team is evaluating a compensation management tool, a compensation coordinator may need to join the process alongside the compensation and benefits manager. For a payroll system, individuals who manage and run payroll will need to look at the capabilities of the system, and someone from finance needs to ensure the system meets financial and statutory reporting requirements and is able to integrate into the general ledger. For recruiting software, regional recruiting managers and recruiting coordinators may need to provide their input into the process.
Demo team. Not all HR professionals and subject matter experts will necessarily participate in the entire evaluation process, but they should sit in on the product presentations and demos. Demos give the opportunity to ask important questions about supported processes and functionality that relates to their everyday HR work.
These are some helpful HCM buying tips for any team.
HR software buying team examples
Since the HR software selection team composition is dictated in part by what software is under consideration, looking at a couple examples can be helpful.
Selection manager: internal project manager or senior HR professional;
Selection advisor: external consultant;
Subject matter experts: HR manager, payroll manager, payroll administrators (one per country or payroll), compensation and benefits manager, pensions administrator, finance manager and IT analyst; and
Demo team: all of the above, senior IT professionals and staff that support payroll processing, compensation, benefits and pensions.
Buying advice
When a purchase is only for a simple HR application -- such as a performance management application or succession planning application -- the team still needs to consider how it may affect future software purchases.
If the company purchases a new core HR system at a later date, can IT integrate it with the job and positions data in the recruiting system and have successful candidates automatically hired into the core HR system?
What will self-service look like if the applications purchased are from different vendors and have different UIs and different integration points?
Can the HR system integrate with the current financial planning system?
How will 401(k) deductions be extracted from the payroll system and sent to the pension provider?
These are the types of questions that a given HR software buying team needs to think about whether the purchase is a single application or a full-blown suite.
