Why it’s time to ditch the traditional RFP for SaaS HRM

There are significant benefits in opting for a SaaS HRM solution over the customary RFP process

There are significant benefits in opting for a different selection process for SaaS HRM products, writes Rob Scott

The “stalwart” of on-premise software selection has for many years been the elongated activity of compiling hundreds of feature, function and technical wishlist items into a document known as the “Request for Proposal” (RFP). Vendors are then expected to honestly answer each question, explain workarounds in detail and accurately price the implementation and licensing. The highly structured format allows a client to compare responses and confidently make an appropriate and risk-reduced software selection.

The RFP process is not perfect; there are many who challenge its lack of scientific rigour and the fact that it’s often used to play vendors against one another to achieve better financial deals. But even with all its flaws, the complexities and risks inherent in on-premise software selection demand a method which implies thorough process, design, integration and technical interrogation. The reality is this takes significant time – six to 12 months is not uncommon.

The principles and fundamental design of SaaS HRM solutions don’t warrant the same degree of detailed investigation as on-premise software, for the following key reasons:

  • SaaS HRM products and platforms are highly standardised
  • you don’t own or have access to the code or back-end infrastructure
  • you have limited choices in configuring and technically integrating the system
  • SaaS HRM vendors generally adopt a “keep-it-simple” design philosophy
  • functionality is much of a muchness across vendor solutions
  • “Ah-ha” moments can be experienced through software trialling
  • SaaS HRM software is updated every three to six months
  • SaaS HRM is a commodity purchase, with lower long-term investment risk.

If you decide to adopt SaaS, then by definition you accept the fundamentals and limitations inherent in SaaS software. Generating lengthy lists of requirements and using the RFP process as a vendor bargaining mechanism is not the best use of time. I’m not suggesting you select SaaS software in an arbitrary fashion, there are important components such as platform capability, API strategies, security and legislative requirements to be considered.

A much better use of your time is to fast-track the selection of the SaaS HRM software. Then spend significantly more time engaging with a single vendor to build a business case and evaluate the solution – a process which should take between eight and 10 weeks to complete using the following five-phased approach:

  1. Analyse: Identify your high-level functional needs (performance management, Core HR etc) and your legal and technical requirements. Using an independent consultant who understands HRM and SaaS technology, identify solutions which support your needs. Use reports from analysts such as Garner as well as crowd opinion sites like “Inspector Jones” to corroborate your choices and offer further insights.
  2. Speed date: Select two to three vendors and brief them on your business outcomes and objectives (not functional specifications). Give each vendor a two-day period to demonstrate how their solution delivers your business outcomes and supports your technical and legislative requirements.
  3. Eliminate: Select the one vendor you prefer – don’t waste the other vendors’ time. Work openly with the chosen vendor to unpack a full solution design and roadmap and define the people, process, technical, implementation and annuity costs for inclusion into a business case.
  4. Assess risk: Use internal or external resources to conduct a full risk assessment based on the vendor submissions and demonstrations. These should be discussed openly with the vendor and mitigation options considered.
  5. Validate: Good SaaS vendors will let you “try before you buy”. This is an opportunity to work on the real software for a period of time to confirm its suitability from a functional, technical, support, services and user experience perspective.

In the unlikely event you get to phase 4 or 5 and decide the vendor or product is not suitable, you have made a decision based on real insights and experience rather than tick-boxes and marketing promises. Repeating the process is still quicker than the traditional RFP.

Benefits of a SaaS HRM solution

  • The traditional RFP is geared for highly complex on-premise software selection. SaaS is fundamentally different and requires a different and quicker process.
  • Speed is of the essence in selecting SaaS software. If you take 10 to 12 months to complete an RFP, the software will have changed significantly over that period.
  • The risk of selecting the wrong SaaS HRM solution is appreciably less than selecting an on-premise solution.
  • It’s a myth to think a fast-track selection approach reduces your ability to negotiate a great deal with the vendor.

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