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HR Systems Transformation: 6 Signs that It’s Time for An Upgrade

As an HR technology manager, it can be difficult to determine the optimal time to upgrade your company’s information systems and platforms. Here are six indicators that can help inform your decision-making.

Anybody with experience in Human Capital Management (HCM) technology platforms is familiar with the trade-offs associated with a system upgrade. On the one hand, over a long enough timescale, implementing a new HCM platform will likely result in positive organizational gains. Processes will become more efficient, time will be saved, and everyone’s lives will become a bit easier.

However, the change management concerns associated with such a transition can pile up quickly and persist for several months or even years. This cumbersome and challenging adoption period may absorb a large portion of your organization’s focus and capacity, so getting the timing right is extremely important.

So how do you know when it’s time to make the switch? To make an informed and strategic decision, start by reviewing the following five indicators and seeing whether any of them match your current situation:

  1. Your System is Unable to Support Organizational Growth

Have you outgrown your current HCM system? If your current platform seems to be lacking critical functionality or is otherwise mismatched with your current needs, then the answer may be yes.

One telltale sign of this can be seen when you ask your provider about desired features. If you keep receiving answers like “Sorry, our system doesn’t do that,” or “Our product wasn’t designed with that application in mind,” it could mean that your organization has outstripped the original intent of the platform. This doesn’t mean that the provider is incompetent or that the initial decision to purchase their product was incorrect. Rather, it means that your organization has evolved beyond the target market of that product and you should begin seeking out a more suitable replacement.

As you come across desired features that are missing from your current system, it may be advisable to compile them into a list. Ideally, this list will serve as a helpful reference point when it comes time to shop for new solutions.

  1. You are Negatively Impacted by Sunsetting and/or Acquisitions

Have you been notified that an HR program or platform used by your organization will stop receiving vendor support? This could occur because of an acquisition, in which case the program’s new owner will likely push you into transitioning to one of their products. This is worth exploring, but it pays to be cognizant of how significant the change management of this transition appears to be, as well as how quickly they would like you to execute said transition.

Cessation of support could also happen because the system you are using is sliding into obsolescence, and the company that developed it has decided that there is no longer an economic rationale for continuing to provide service. While you could continue to stick with the platform, this is risky because the system will not reflect updates to regulations and there will be nobody to help you when something has gone wrong.

In either case, it is worth looking into other options. If you are faced with a vendor deadline for leaving a soon-to-be defunct platform, it pays to give yourself sufficient time to evaluate, select, and implement a new system that is suitable for your organizational needs.

  1. Your Vendor Relationship is Poor

A vendor is only as good as the people they employ. The quality of a vendor relationship can significantly impact the efficacy of an HR system, and deteriorating customer service is just as valid a reason to switch to a new partner as any technical issues. Over time, negative changes in support quality, personnel availability, or general vendor engagement can undermine even the highest-quality products. In such scenarios, organizations should seriously consider seeking out alternative vendors.

However, if you genuinely like the product in question, it is worth trying to salvage the relationship before migrating your organization to another solution. In some cases, initiating a new request for proposal (RFP) process may be enough to get your vendor’s attention and prompt them to reinvest in a higher caliber of service.

  1. Your Current Costs are Too High

An HR technology partner that fails to evolve with an organization can lead to disproportionate costs. Whether it’s escalating per-employee pricing models or excessive charges for system enhancements, such cost inefficiencies may prompt organizations to seek more appropriately-priced alternatives.

For example, if you negotiated a per-employee pricing model when your company had 150 employees, but you have now grown to 1,500 employees, if they haven’t done so over time, your vendor should be open to negotiating that rate downwards. Vendors who are not accommodating, or who are constantly nickel-and-diming you for routine calls and baseline support, may not be the best long-term partner from a fiscal perspective. As mentioned above, going through an RFP process to see what else is on the market can help motivate a vendor to make adjustments to their cost model in order to keep your business.

  1. Your User Satisfaction is Low

Ever-increasing expectations surrounding user experience, spurred by advancements in consumer-grade technology, extend to workplace systems as well. An HR system that fails to meet these expectations can cause irritating bottlenecks, impact employee satisfaction, and dampen recruitment efforts.

If your current HR technology environment hasn’t kept up with providing just such an experience, the noise level in your organization might be so high that bringing in a new solution is the only answer. This may not yield a financial cost/benefit but can definitely help in employee satisfaction and recruiting efforts.

  1. Your Tech Stack is Outdated

Before cloud-based systems became the norm, many organizations deployed a “best-of-breed” approach. This, by definition, requires dual entry of the same data into different systems or building integrations across the landscape. The cost of maintenance and lack of a single source of truth for data is inefficient and ineffective compared to newer technology, and those who are still using these types of systems should consider switching to a modern alternative. Such alternatives generally consist of unified, cloud-based systems that operate on a single source of truth.

Strategically aligning your tech stack with up-to-date technology paradigms can significantly enhance operational effectiveness and decision-making capabilities. If you are hamstrung with an older system, it is wise to try and capture all the ways that data is manually manipulated in your current setup in order to compare that to what could be done in a fully unified environment. Sometimes the business case to select a new partner builds itself.

Ultimately, the decision to undertake an HCM technology transformation should be driven by a combination of strategic business needs, awareness of technological advancements, and evolving employee expectations. Organizations contemplating this transition must carefully evaluate their current systems’ limitations, strategic objectives, and the potential for enhanced operational efficiency and employee engagement.

Article provided by OneDigital

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