Buyers Beware: The Commoditization of Professional Services

The Driving Force Behind this Trend

June 14, 2013
This article posted in: HRIS Services  Tags: Implementation, Technology

As the adoption of cloud HRIS systems accelerates from early adopters to becoming the norm, the way HR technology vendors package and propose implementation services is being commoditized and/or diluted to help win new business. The actual implementation delivery versus what you viewed during the sales demonstration(s) may not be possible with the low services estimate provided. Like any commodity, low costs trumps value (implementation services in this case), which I believe is critical to the client’s success and their happiness and willingness to renew their next software subscription. Some HRIS vendors are deploying implementation strategies focused only on the initial customer acquisition versus the longevity of the client’s success by diluting implementation services to drive the implementation fees down. So buyers need to beware of the commoditization of professional services.

Diluted vlaueA major goal or objective of cloud HR providers is to get your new HRIS up and running fast in order to begin billing you for the monthly software subscription fees.  The implementation and training services is nothing more than an obstacle for some of these vendors. A classic example is the ATS provider Taleo (now referred to as Oracle Taleo Cloud Service) with their Business Edition implementation deployment model. Taleo has always offered an inexpensive, quick, remote deployment strategy to help to get the system configured and deployed fast at an affordable price. An investment that can be sold to an executive without going to RFP or a long sales evaluation process. This strategy for Taleo, prior to the Oracle acquisition, was very successful and handsomely rewarded their stockholders in tune of $1.8 billion in revenue. Today, Oracle is peeling back what they purchased and in my opinion realized that Taleo’s client base is under-utilizing the Taleo ATS system because of the lack of upfront planning, project management, training, testing and supporting specific business issues the client was trying to solve. As a result, some clients have blamed the system for being inept and purchased a new ATS solution when their subscription expired.

It is imperative that business leaders realize that they are not going to solve all of their workforce related challenges with a ‘cookie-cutter’ approach to implementation and training services. The HRIS vendors that are in this for the long haul realize that they need to spend the time up front listening to the customer and providing a detailed proposal with an explanation of their implementation methodology, configuration plan and ability to enable the most relevant and important features of the application for each of their clients. The HRIS vendors that focus on these types of implementation services realize that there is a much higher probability of a client satisfaction, client success and software subscription renewals.

Here is my short list of red flags to consider when evaluating an HRIS vendor and their implementation approach.

FINAL THOUGHTS

Every HR solution implementation will have bumps in the road and potential delays. With careful upfront planning, and full knowledge about what type of implementation approach you are buying and the cost associated for the services to be provided, you will set the proper expectations for your internal project team and the assigned vendor resources. You’ll also significantly reduce the risk of surprises, and the need to go back to your leadership team for additional money for services needed to fully and properly implement the software you acquired that were not included in your “cookie-cutter” implementation.

Be a smart HR technology shopper from the start — you’ll be happier in the end and you won’t have to do it all over again in a few years!

 

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About the Author:

Mike Maiorino

Mike Maiorino is the Founder and CEO of HRMS Solutions. His 30 years of dedication to the HR/ Payroll technology profession, with a proven track record of results and recognition, has earned him a reputation for being a subject matter expert regarding HCM Solutions. Mike has served in a number of sales and managerial positions for leading providers of HR and Payroll solutions, including ADP, Sage Software, Kronos and Infor (fka SSA Global / Infinium). He is a member of the BAHRA Chapter (Boulder Area Human Resource Association) and completed his certification as a PHR (Professional in Human Resources) in December, 2002. Mike was also recognized in Biltmore Who's Who in 2007 as one of Washington, DC's most distinguished members.

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