5 Steps to identify the right HCM Partner

Deciding to embark on the journey of HR digital transformation is like getting your heart transplant done while running a marathon and identifying the right HCM partner is equivalent to choosing the surgeon you trust to do the operation1. It’s an incredibly complex process where it’s not just about survival but about being able to thrive. With a staggering failure rate of 50-75% for all enterprise resource planning (ERP) projects2, it is imperative to find the right Strategic Partner with the right solution for your business.

The market is flooded with hundreds of players offering cloud-based, and some still offering server-based, HCM or HRMS solutions. Almost all of them have a bunch of overlapping features with each of them offering a few unique ones too. How then do you choose the right one for your organization?

Here are 5 simple steps to help find the right HCM partner for your business needs.

1. Define the objective you wish to achieve

Change can be emotionally intense, making employees anxious, confused, and feeling threatened, which leads to resistance. It is important to speak to key HR members to address their fears, define new roles, and help them see the light at the end of the tunnel. Involving the leadership team, line managers, HR, IT, and a set of key employees early in the process will go a long way in making it a success. It is about creating a buy-in with internal champions to drive change across the organization.

With all onboard start your groundwork.

  • What is your organization’s digital transformation history?
  • What are the learnings that you can benefit from?
  • Can you get former champions on board?
  • Speak to all stakeholders in the HR Value Chain to understand the challenges being faced.
  • Identify the impact of these challenges on your people and the organization.

This exercise if done right, across all your HR processes, will help you deeply identify your pain areas thereby giving extreme clarity on the objective you wish to achieve.

Remember, you will never be able to get the right HCM partner unless you know what you are looking to achieve.

2. Look at the Big Picture

Oftentimes businesses focus a lot on features and use them as a sole basis for decision-making. While features that meet your requirements are necessary, each system may address your core needs differently. Dive deep to understand the flexibility, configurability, and workflows, and how they will impact your business. Since HCM is the only enterprise solution that touches each employee’s life, focus on the foundation of the system, its core design principles, and the team that you will work with, as features can always be custom-built.

While evaluating, spend time to understand if it is a unified platform that offers you end-to-end HR Management. Research shows that attempting to maintain multiple systems with employee information results in data inconsistency and increased administrative workload. A single source of truth for data helps streamline and optimize processes while increasing employee productivity and engagement.

Payroll compliance can be a complex thing to manage, and clients often look to outsource this element. We suggest that you split compliance into two buckets pre-payroll / payroll, and post-payroll activities. Ensure that your HCM partner is willing to support you for the pre-payroll / payroll activities, including minimum wage adherence, compensation structures, tax deductions, bonus calculation, gratuity, and payroll compliance data and reports generation among others. For post-payroll activities including statutory and income tax challan generation and payment, and IT proof validation, among others, you can select a vendor specializing in compliance outsourcing or manage it internally with your accounts team. Just like you would never think of going to a dentist to resolve your heart issues, we suggest you pick a specialist for Statutory Compliance support and HCM respectively.

Key Factors for Choosing the Right HCM Partner

3. How will your Partner help solve your Challenges?

Map the transformation journey for your business so you know where you wish to be a few years from now, then validate that your HCM partner will be able to meet your current and future needs. Insist on meeting the team and focusing on core functional and industry expertise that they offer to know the kind of support you can expect through your association with them. This is a critical step to help build the required confidence to take things forward.

Discuss your challenges, and their impact on your people and organization and prepare a business case along with your partner. Define what success means to you and mutually agree on the metrics that will be used to measure it. Define the roles and responsibilities of your team and the partner, not just for the implementation, but for the entire duration of your business relationship. List down the challenges you could face on the go and create a plan of action with the realignment of responsibilities in each scenario.

Check their track record in terms of successful HR Transformations and study their business model to know how they operate; this will give you a great understanding of their intent and priorities and give you a fair idea of your value as a customer for them.

4. How Strong is your Partner in Implementation?

HCM platforms are often underrated by management and teams alike where they may not be completely aware of the breadth and depth of the system, its configurability, and the areas of customization required. Most HCM providers utilize their in-house team of experts for implementation, while some of the providers outsource it to implementation partners who act as a bridge between the HCM provider and customer to set up, configure, and ensure they’re getting the most out of your product.

The success or failure of the HCM implementation will ultimately depend on the expertise and experience of the chosen partner. Understand the implementation methodology, approach, and process followed by your partner, for they should be designed to lead you toward better practices and greater success. Executing the changes during the implementation process across the organization hierarchy can be a challenging task, and hence, it’s important to consider your potential partner’s experience in change management, for they should know what it takes to make it a success.

Ideally, you should look for a partner whose key objective is to deliver a great experience while helping your organization move up the HR Maturity curve. They should have, and willing to share functional knowledge that could potentially enhance your HR processes to create a greater business impact. Remember all good things take time, and your partner should be willing to walk with you through your journey of transformation.

5. What is your Partner’s approach to customer success?

HCMs are large and complex products where even a minor change can impact the usability of the system. Despite detailed training and support, Admin Account management for such a system can be a daunting task. Corroborate the functional expertise of the partner to manage your Admin Account effectively and efficiently, so you and your team can focus on change management and process optimization.

Carefully analyse the design architecture of the HCM. Many HCM solutions may claim to be an all-in-one solution, however, are essentially different products, often with different technologies, connected together. Resolving issues on such platforms can be challenging as it may require talking to multiple support agents due to the multiple products and technologies involved. While HCMs with a unified platform can resolve issues faster as there is only one product to manage.

The key determinant of success is ROI, where three factors play a key role:

  • Speed of implementation:  A structured implementation plan with a deep level of functional expertise in change management can go a long way in ensuring a smooth and timely implementation.
  • User adoption: Engaging stakeholders early in the process and aligning them to the organization’s objective and long-term value of the technology can directly impact the speed and rate of user adoption.
  • Utilization of all modules to avoid dead investment: One of the biggest grey areas is the utilization of all the modules to their fullest. Organizations often choose to subscribe to all available modules as their focus is on getting a bargain deal upfront. While getting a bargain deal may seem like a great win, most organizations fail to implement and use all modules. Hence, it’s important to discuss this point upfront with your partner to understand their support system and methodology to ensure that you fructify your investment.

All said and done, it finally boils down to the intent and values of why your partner first came into existence. Are they playing the valuation game to make investors and shareholders happy or are they here with a desire to make a real business impact on their customers?

It’s worth noting that while the size of a potential partner’s organization and its large portfolio of clients can be highly reassuring, however, it does not mean they are right for your business. So, choose your partner wisely and you will reap the rewards for years to come.


1Source: Gurus Solutions – The 5 Selection Criteria for Choosing An ERP Implementation Partner | The Cloud GURU by NetSuite & Oracle Cloud Solutions channel on YouTube

2Source: Gartner