HCM SaaS Implementation: Selecting the Right System Integration Partner

The popularity of cloud-based Human Capital Management (HCM) solutions continues to grow as organizations trade in traditional enterprise resource planning (ERP) platforms for the added functionality, improved efficiency and consumer-grade user experience of HCM software-as-a-service (SaaS) solutions. But uprooting a legacy human resource management system (HRMS) environment is a momentous transformation that justifiably draws significant attention and scrutiny from stakeholders across an organization.

Two components are critical to this transformation: First, an organization must complete a thorough evaluation of market-leading HCM vendors to select the HCM software that best addresses its functional and technical HR requirements. Second, it must implement the solution. While selecting the best-fit software with the required functionality is paramount to the success of any HR technology strategy, ensuring the HCM software is deployed correctly, on time and within budget is a close second, if not of equal importance. Implementation of an HCM SaaS platform requires a significant time commitment and can be quite costly, so organizations should focus sufficient attention on getting it right the first time.

Options for Systems Integrators

Most enterprises use one of two current approaches to implementing a HCM SaaS solution: the HCM SaaS vendor’s own professional services resources or a third-party system integrator (who may also be an human resource outsourcing (HRO) provider). In the second approach, the HCM vendor often will provide the buyer a list of certified implementation partners. This list typically includes system integrators with a successful track record implementing the software and are certified by the HCM SaaS vendor in implementing the solution. The table below includes some of the leading system integrator options in the market:

As seen in the table above, some HRO providers are certified system integrators for market-leading HCM SaaS platforms. HRO providers that serve as system integrators bring to bear their expertise on best practices in process design and service delivery, as well as their ability to fit the system to the customer’s specific service delivery model and their experience in ongoing application management services. Some view this bundling as “putting too many eggs in one basket” and purposefully choose a different firm to serve as system integrator to ensure they have more than one voice at the table.

Criteria for Choosing a Partner

Whether the customer chooses a partner from the vendor-provided list or chooses a partner independent of that list, it is critical to find an appropriate fit for the organization. Evaluating and selecting a system integrator should demand the same level of rigor, diligence and scrutiny as evaluating and selecting the HCM SaaS technology itself.

The following seven criteria are critical in evaluating and selecting a HCM SaaS system integration partner.

1. Experience. No organization wants to be the “guinea pig” for a system integrator implementing an HCM SaaS software module for the first time. Insist on a system integrator that has appropriately trained staff with extensive experience completing implementations of the specific HCM SaaS solution for all the in-scope modules. Ask for customer references that demonstrate the firm’s experience with implementations on a similar scale and on a similar timeline. Past successful implementations provide evidence that the system integrator has the appropriate project management skillset (methodologies, tools, controls and reporting) to complete the work. Confirm the system integrator’s experience includes adherence to the standardized deployment methodologies most HCM SaaS platforms require. This adherence initially might prove all system integrators alike, but differentiation will be evident through the added methodologies, unique tools and best-practice processes the system integrator uses in deployment.
2. Knowledge. Ensure the system integrator has experience with and knowledge of the specific local data privacy, tax and social insurance requirements and other regulations for in-scope geographies that could influence the design of the HCM solution. A lack of experience implementing the software in these geographies could lead to delays in the implementation as the system integrator uncovers legal or regulatory issues it has not previously encountered.
3. Reputation. Some of the most helpful information to have in selecting a system integrator is firsthand feedback from current and past customers and HCM vendors. The system integrator often will provide a list of references including customers that have completed a successful implementation. Be sure to ask other HR organizations that have implemented or are currently implementing an HCM SaaS solution with that system integrator for candid feedback that pinpoints the system integrator’s strengths and weaknesses. Use reference calls for evaluating the HCM software to solicit feedback about the HCM provider and any third-party system integrator the customer may have used.
4. Flexibility. The system integrator should be able to tailor the implementation to the customer’s specific needs and timing, including requirements around the organization’s merit-planning process, end-of-year payroll and current system contract terms. For example, an HR organization’s technology environment may include multiple systems on multiple contract timelines that must run to completion before being moved to the HCM SaaS solution. In this case, a phased implementation approach may fit best, allowing the organization to implement specific HCM modules while delaying others until they can retire legacy systems. For organizations that desire a phased implementation, a system integrator that only recommends a “big bang” approach or lacks experience with a phased approach can be quickly eliminated from consideration.
5. Culture. The system integrator is responsible for assigning project resources that align well with the customer’s culture and team. During the selection process, interview the individual team members who will be responsible for completing the implementation. If there appears to be misalignment or skill gaps requiring personnel changes, it’s likely that misalignment will persist in the implementation and could have an adverse effect on the outcome.
6. Price. The system integrator’s proposal should be price competitive. Conduct an independent multi-vendor or sole-source evaluation based on real market data. A pricing proposal should include rate cards by geography, the level of assigned resources and locations and estimated days/hours for project completion by phase.
7. A detailed plan. The system integrator’s proposal should include a detailed plan for completing the implementation from start to finish, including:

• Clear delineation between responsibilities, deliverables and dependencies of the system integrator and the customer – including testing, training, data conversion, decision making/acceptance criteria – so nothing is left to be done “on the fly.”
• A defined process for identifying and documenting configuration requirements, business processes and alignment with the service delivery model, including workshops and verification sessions with customer and system integrator personnel
• Established steps for converting customer data to the new environment
• A structured governance model to be enforced by both the system integrator and customer
• Confirmed capabilities for organizational change management and communications
• A detailed outline of implementation personnel, including:
  • Onshore and offshore split of system integrator roles
  • Required customer roles along with estimated time commitments
  • Involvement from the HCM SaaS provider personnel
• A detailed end-to-end testing process to meet all customer requirements so the system can go live with full functionality
• An outline of requirements to ensure key customer personnel are properly trained prior to go live as well as plans to train customer end users
• A plan for how deployment of the system will occur once implementation is complete
• A playbook for ongoing configuration support once implementation is complete
• A detailed description of available post-production support, including the level of support and the timeline for the support.

Implementing an HCM SaaS solution can be an exciting and daunting task, but when it is successful it can pave the way for a more efficient, effective and technologically advanced HR organization. Choosing the right implementation partner is key to that success. A detailed and thorough analysis of the system integrator market is critical. ISG helps HR organizations conduct evaluations of HCM SaaS solutions and system integrators so they find the right fit for an implementation project plan that meets their needs.

About the author

Mark Bray is a Principal Consultant with over ten years of experience in the sourcing industry in the areas of HR, finance and accounting and information technology. Mark is equipped with a comprehensive set of skills including financial modeling, contract review, pricing normalization, ARC/RRC analysis, break-even analysis, NPV/IRR analysis, and statistical trend analysis. He has extensive experience in the development of numerous products including Financial Base Case, Financial Business Case, RFP Pricing analysis, Strategic Assessments, and Mark-to-Market analysis.