Build, Buy or Integrate: Why your HR supplier’s growth strategy matters

I was chatting to someone at an HR networking event last week about the trials and tribulations of selecting HR software. They’d invested a lot of time and energy in selecting a new HR solution, only to take the difficult decision to pull the plug on the whole project several months in.

The vendor they’d selected was extremely reputable and offered a portfolio of HR solutions that covered the HR processes they were interested in – and more besides. But, when they came to put the pieces in place, it became clear that key elements of the suite had been bought, and not built, and the integration was, for the most part, still a work in progress. As a result, the implementation was dragging out and the company wasn’t confident it would get all of the benefits they’d anticipated.

Since few – if any – Cloud HR suppliers can offer depth and breadth across the complete employee lifecycle this led us to a discussion about which HR processes need to be managed in a single system, and where a third party HR system (albeit with integration) would be acceptable.

Her view was that any system that had to be used by the whole company, from the MD to the newest recruit, absolutely had to be a single, harmonious whole. Whilst systems that were largely the domain of the HR team (such as payroll or recruiting) could be independent.

She also felt that there were other occasions when independent solutions might be more appropriate. An example she gave was expense management. In an ideal world, they’d like it to be part of the core HR suite, but it wasn’t as important to them as other elements, like performance management and time tracking.

The logic here was that systems are used on a regular basis and have minimal “touch points” with processes managed by other applications, employees are likely to get to grips with it relatively easily, especially if the IT team can remove some of the friction by implementing single sign on.

While there are benefits to having expense management as part of your HR suite, aside from “knowing” the employee and who they report to for sign off, there’s not so much in common with core HR. Integration with payroll, CRM or PSA software is arguably more valuable.

Conversely, managing timesheets independently of the system that tracks employees’ working time patterns, holiday entitlements, booked leave, or time off for training, is going to add a massive overhead – unless the integration between the two systems is seamless.

So, next time you go shopping for an HRIS system, it’s worth spending a few moments reviewing your requirements in light of where integration really matters, and where best of breed would be fine, and then making sure the HR systems you review really are as joined up as you need them to be.

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