Buyers Beware: The Commoditization of Professional Services

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.

A 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.

• Low cost for a limited set of implementation services
• Short delivery of services time frame (under 8 weeks)
• Remote delivery of services
• Lack of a comprehensive implementation methodology or detailed project plan and timeline providing specific project details and deliverables
• Substitution of human interaction with video’s, system documentation, online help, and community support groups
• Many implementation tasks falling on you, the client, not the vendor
• A very short or no statement of work outlining the details and responsibilities of professional implementation services to be delivered for your project

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!