The 5 Steps to Buying HR Technology #HRTechConf

Hey kids! I’m out at the HR Technology Conference this week, and I have 26 meetings set up with HR Technology companies to do briefings. My buddy, KD, says I do a hundred crappy HR tech demos a year, so you don’t have to. That means this week, I’ll knock about 25% of those! It was 27, but I had one cancel because they felt like I didn’t do enough “HR” tech, and I only know “Talent Acquisition” Tech. That made me laugh! Thankfully, I’ll survive. They most likely won’t.

If you are an HR or TA Leader, the biggest budget purchase you’ll most likely ever make in your position is technology. What I find is that even though this will be one of the most important leadership decisions you’ll ever make, most leaders really have no idea how to buy the technology that runs their business. By the way, as leaders, almost know functional leader knows how to buy technology, so we aren’t alone!

Because we lack this knowledge, most of us will either let our IT department make this purchase for us (a super bad idea!) or pay a giant consulting firm a giant fee to help us make this decision (not as bad of an idea, but not great). Your IT department doesn’t know HR/TA. You do. That should be enough said about IT choosing your functional technology. The giant consulting firms are paid millions of dollars by certain vendors for “research.” So, guess who they will recommend you buy?

Since I get to do a lot of demos and briefings, I like to think I most likely have some good insight into how to do this. Wait, what the heck is a “Briefing” with an HR Technology company? Basically, “briefing” is analyst-speak for speed dating with a tech vendor. In 30 minutes, they’ll tell you why they’re awesome, what they have built recently, and what they plan on building in the future. Then I get to ask them what their favorite movie is, where they’ve traveled, etc. You know, all the normal dating questions. If they really know what they’re doing, they’ll bring diet Dew to butter me up!

How Should You Buy HR Technology?

Step 1 – You actually use your current software fully and truly figure out what it can’t do that you desperately need to do your job better. I find almost no one does this first step. They just want something better, even though when asked, they struggle to verbalize what better is.

Step 2 – Once you know what you need, you figure out who the best players are in the market who do that thing. That takes some research and a hell of a lot of demos. For anything you need, figure out at least twenty vendors selling that solution. Based on your size, that will limit your selections, but at least 5-6 will always be in play. Think about Enterprise-level HCM alone; you have: Workday, Oracle, SAP, Infor, Ceridian, ADP, UKG, and I’m sure others that I’ve missed. This is why I got to the HR Technology Conference every year, to keep up with the market. Every HR and TA leader should be doing the same.

Step 3 – Depending on your size, you’ll have to RFP. For many SMB and Mid-enterprise buys of point solutions, you’ll just be on your own trying to find a partner. In this case, step 2 becomes super important for you because I find that most HR/TA shops buy what is “Sold” to them, not what is available. Turns out, HR Tech companies are super good at marketing and advertising to potential buyers. Those companies marketing to you might be the right choice if you’re lucky, or it could be an awful choice. You need to know your options!

Step 4 – You need to talk with users of the technology you decide to buy before you buy it in three ways: 1. Users currently going through an implementation. 2. Users who are through implementation for at least one year. 3. A user who has left them within the past year. If the vendor doesn’t give you these references, walk away! You need to know how much pain you’ll be in and the realistic timing of implementation, you need to know what learnings others had during their ramp-up of the technology, and you need to know what could go very wrong as a worst-case scenario.

Step 5 – Network in the community for other users who use the same technology you want to use and find out what they are paying for that same technology. I find tech vendors charge as much as they can, and some buyers are better at negotiating than you’ll be. If you can come back with some hard numbers, the vendor will work with you. If you have no idea, you’ll pay a much higher rate than another company using the exact same solution. Also, if the big giant consulting firm that you’re paying six figures for can’t give you these introductions, you’re paying them too much!

There are obviously a bunch of steps within these steps, but this framework will give you a good start and make sure you don’t make a bad purchase. Also, remember the old technology buying saying, “no one ever got fired for buying IBM.” That was said because, at the time, IBM was the gold standard and the most expensive. So, while you might be able to find a good technology cheaper, you also have more risk of it failing.

The same goes for HR/TA buying decisions. There are over 10,000 HR Tech solutions on the market. You can find some amazing technology where the vendor will almost give it away to gain you as a client and get more users, but that comes with some big-time, unproven risk. For some, that risk will be worth it because you’ll be able to get and use the technology you could never afford without taking that risk.

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