Mythbusters: Best of breed HR software vs all-in-one
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Choosing an HR software solution can be daunting. With so many options available, it can be hard to evaluate which is the best bet for the long term. One of the first considerations is whether to go for a specialist talent management vendor, also known as a ‘best of breed’ solution (e.g. PageUp, Cornerstone, OnDemand, Saba), or to opt for a large enterprise solution or an ‘all-in-one’ vendor (e.g. SAP, Oracle). Best of breed solutions integrate with your core HR systems, such as payroll, whereas all-in-one vendors offer talent management and core HR systems.
You may have heard that bigger is better, less risky or more convenient. But that isn’t always the case, so let’s set the record straight. Below are my top five myth-busting truths to help you make an informed software decision:
Myth: Larger providers are more secure and reliable.
It’s easy to make this assumption, but with organisations like Equifax and LinkedIn tackling major security breaches in recent years, it’s natural to be cautious when evaluating any software vendor. Security breaches among such well-known brands tell us that larger HR software solution providers are just as susceptible to attack as smaller vendors. Going with one vendor who can handle all your HR needs might seem logical, but it’s important to keep in mind that putting all your eggs in one basket does expose you to risk.
In fact, best of breed talent management solutions actually reduce the risk of working with a vast number of HR technology providers by integrating them into their ecosystem. This means applicants and employees aren’t managing multiple passwords for the different systems that you use. Plus, most all-in-one vendors don’t always integrate as quickly with external vendors which means you could potentially have data being transferred insecurely from the vendor to your HR team.
Suffice to say that you should do your due diligence, but know that best of breed vendors are just as conscious of security as all-in-one vendors.
Myth: A larger provider will give me more integrated vendors to choose from.
This is highly unlikely. The number of startups providing HR technology is at an all-time high and, to give you an idea, there were 402 deals worth $2.2B in funding in 2016 alone. Best of breed talent management vendors can move quickly to tap into this growing ecosystem and provide your HR stakeholders with the latest technology for attracting and engaging candidates. However, large vendors don’t specialise, typically choosing to meet client needs by housing as many pieces of software from high volume providers as possible, as well as providing support for aggregator vendors. As a result, the likelihood of a large vendor integrating with all your local and niche vendors is rare.
On the other hand, best of breed talent management vendors make it a priority to integrate with the best HR technology, localising by country and providing the APIs to work with a diverse ecosystem.
Myth: Large providers are one platform, so integration overheads are removed.
Payroll sold as “SaaS” is a problem that businesses need to be aware of. Instead it’s the integration between an all-in-one vendor’s cloud service and their on-premise HRIS, and versioned “SaaS” deployment - it’s the last thing you want on the cloud. With the high volume of acquisitions and mergers in the Human Capital Management (HCM) space over the last 10 years, larger vendors are playing catch-up when it comes to the integration between their purchases. The reality is that an integration between your on-premise system and cloud talent management software from the same vendor actually requires the same amount of effort to integrate with best of breed talent management.
Additionally, there is a perception that larger providers offer a better user experience but, due to clunky integrations of acquisitions made over the years, a seamless experience still remains the utopia that all-in-one vendors seek to achieve. For best of breed providers, it’s essential they make sure that candidates, employees, managers and HR users all have a great user experience, no matter if they’re transitioning between the modules of a talent management suite or off to another system.
4. Business Managed Software
Myth: Implementing and maintaining a talent management platform needs a lot of IT resources.
Actually, it doesn’t. Businesses have found themselves estimating a certain amount of monetary investment and IT resources for a service from an all-in-one vendor, only to realise later that the actual costs and resources utilised are much higher. There are additional costs for consulting as well as for a range of add-on services (such as configuration, training, and optimisation), which means that they have incentive to limit the configurability of their platforms and charge a premium for their services.
On the other hand, it’s in the interest of best of breed vendors to make sure that you’re empowered to get a maximum return on investment from your platform. After all, if you don’t like the service or the product, it’s a lot easier these days to switch from one provider to another without having to invest in a six-month project team.
Implementation timeframes today are driven by how much configuration you actually want to do. Many providers have the most common workflows, forms, communications and other configuration templated for you, so you can just tweak some settings and launch the system. Even if the change management department within your business turns a six-week implementation into three months – as it sometimes happens – that’s still less than your average large vendor implementation timeframes.
Your subject matter experts and ‘Super Users’ need to be involved, but the typical best of breed implementation uses very few IT resources. The only time IT needs to be involved is when integrating with your other systems, or getting a careers site hooked up to your corporate website.
5. Agility and Flexibility
Myth: An all-in-one vendor has more people, so they will be able to serve me better.
Size is not a pre-requisite for quality service. All-in-one vendors have many priorities and are generally less flexible when it comes to tailoring a solution to your stakeholder’s specific needs. Consider whether your HR team can actually influence the roadmap of a large vendor or – if you needed action fast – could you get the CEO on the phone? While all-in-one vendors do provide premium account management, this comes at a cost that is often not included in the pricing you’re comparing against a best of breed offering. Best of breed vendors, on the other hand, typically provide end-to-end services across both strategy and operation, incorporating all hidden costs in the initial pricing.
Best of breed vendors also give you access to other fast-paced organisations they partner with, who can innovate alongside you and help you create a best of breed HR technology stack. Your stakeholders will thank you for selecting a vendor that’s fit-for-purpose and aligns with the business’s requirements.
By Aaron Hardy, Product Manager, PageUp