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Buying a Human Capital Management System? The Right Partner is Essential

  • HCM
  • Article
  • 6 min. Read
  • Last Updated: 05/15/2017

human capital management solution partner
When researching human capital management systems, you'll want to look for a solution that allows you to both streamline HR workflows and make analytics-driven decisions. Learn more about key considerations when it comes to choosing an HCM vendor.

Table of Contents

Today's human capital management (HCM) solutions are powerful, sophisticated tools that can help you manage your workforce. HCM solutions can help you streamline human resource (HR) workflow, allow instant access to all employee records, integrate personnel, payroll, and benefits information, and electronically safeguard data. In addition, the technology's analytical capabilities aid decision making with data-driven evidence.

Most companies now automate at least some HR functions, even if only to store employees' demographic and payroll information. Deloitte's 2017 survey of more than 10,400 business and HR leaders across 140 countries (in companies of all types and sizes) found that 73 percent rated digital HR as important/very important.

Importance of digital HR

You may be starting from ground zero: ready to purchase an HCM solution to lift your company out of the paper age. Or your firm may be poised to replace an outdated system with the latest, most robust technology. In either case, the most pivotal decision in choosing the right HCM system is choosing the right partner.

the right HCM solution

Seek simple, usable technology

Many vendors offer HCM systems for businesses large and small. But no matter the size of your company, you want simple, usable technology that can drive the efficiency of your enterprise. The more time you and your staff spend on busy work and administrative tasks, the less time you have for market analysis, strategy, and growth.

The right HCM vendor can help your business maximize its human capital. Choosing the wrong partner, however, can lead to complications, aggravation, and a less-than-ideal bottom line for years to come. This can hold true for companies of all sizes, in every industry.

What should you look for in an HCM solution provider?

Streamlined workflow

First, target your biggest opportunity to drive efficiency — perhaps benefits administration, record-keeping, regulatory compliance, or time and expense management. Focus your selection process around that component.

Integration with other HR software

Seek a system that integrates HR functions into a single HCM platform with a single employee record. This is the most cost-effective approach and:

  • Reduces manual data entry and administrative work across your company;
  • Requires only one vendor to train employees;
  • Ensures that all functions interact with one another; and
  • Presents all functions in a similar user interface, significantly reducing your training costs.

You may hear sales pitches on the benefits of integrating with several vendors. That can work if the provider is adept at application programming interfaces. However, you must handle all service issues, such as working through data mismatches between systems. This represents a potential sinkhole of headaches and time commitments.

Intangibles count

The product vendor should not only provide all of the systems and capabilities you deem most important, it must also demonstrate that it can deliver on the intangibles that accompany an HCM solution. Carefully evaluate the vendor's:

  • Customer service – When is support available? During business hours only, or 24/7? On holidays? Will you receive dedicated service from a team that can help your staff get the most from the system, or do you connect with a large, impersonal call center? Does a service component come with the software, or are you only buying the programs and operating information? Beware of buying software without support.
  • Mobile designs – Many HCM providers offer separate mobile applications to accompany their software; typically scaled-down versions of the full application designed for a mobile device. Users must learn multiple ways to interact with the software — one for the desktop or the internet, and a second for mobile devices. Look for a partner with a consistent mobile design approach.
  • Self-service capabilities – Companies increasingly prefer that workers enter and update their own personnel information. Giving employees 24/7 access to their data frees managers and HR staff from a great deal of administrative work. Seek a system that allows employees to access their demographic data, payroll withholding, 401(k) deferral percentage, timecards, etc.
  • Analytics and reporting – You want immediate access to key transactional data and trends. HCM software should provide ready analyses of relevant information, such as paid-time-off tracking, the cash requirement for this week's payroll, or year-to-date overtime payments.
  • System scalability – Look for an HCM solution that can grow with your business. A scalable HCM system will allow you to stick with a product and vendor, making modifications as needed. You won't have to seek out new technology a few years down the road.
  • System security – HCM platforms hold highly sensitive information, making them prime targets for cyber criminals. Yours should feature vigorous data protection including encryption, authentication requirements, and other security measures. Cloud-based HCM solutions provide greater security protections than locally hosted software, reducing the risk of data breaches and business interruptions. In addition, they're cost-effective since you don't have to purchase and maintain hardware, retain a large IT staff, or buy and install annual upgrades.
  • Disaster recovery – Your HCM system should have strong safeguards to keep your critical systems online. Vendors that host your data at their own sites have more control than those that rely exclusively on off-site client data storage. Also, vendors that mind your information on-site can leverage cloud computing technologies.
  • Financial stability – Will this vendor be around in one, five, or 10 years? Examine every candidate's fiscal background to ensure you choose a partner for the long haul.

In addition, check vendors' references. Peruse the details of potential contracts. Ensure you understand what each vendor offers regarding data security, data ownership, and data access — as well as data recovery if the relationship ends.

The choice of an HCM solution affects everyone in your company. It's an investment in the future of the business. Do it right, and you can reap significant dividends in cost savings, labor efficiency, and employee morale.


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* This content is for educational purposes only, is not intended to provide specific legal advice, and should not be used as a substitute for the legal advice of a qualified attorney or other professional. The information may not reflect the most current legal developments, may be changed without notice and is not guaranteed to be complete, correct, or up-to-date.

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