Best of Breed or Unified Solution? You Decide!
There are times when the opportunity is just too good to pass and jumping in on one of the favorite topics of workforce technologists everywhere is definitely one of those can’t miss discussions. The topic has been a significant discussion of debate for at least four decades and probably goes much farther than what we can discuss in this forum. The concept that it would be possible to link multiple diverse technologies to create an expansive and sophisticated solution was definitely a logical hypothesis. Weren’t the same brilliant people who invented this amazing technology the same people who said they could integrate with any data source. Unfortunately, barriers to information exchange, security and access created some barriers that made global sharing difficult if not completely impossible. Issues with programming codes, browser compatibilities and data structures were just the initial hurdles to creating a unified employee experience from disparate platforms.
Best-of-breed vs. unified solutions have been a debatable topic for many years and the collected experience of myself and the three other authors in this discussion exceed a century (we all started in our teens 😊)! During the past forty years there have been galactic changes in the speed of processing, user-friendly nature of most transactions and the evolution from green screen terminals to desktop and laptop computers, to today’s profusion of end point devices including tablets, smart phones, and an increasing population of other-worldly devices that operate on your watch and anywhere else your imagination may take you. What has remained the same is that organizations buy these solutions in various formats to mainly to provide employees with tools to achieve business goals.
If our only focus was the provision of the consummate functional solution regardless of cost and interoperability the end result and collective assemblage would perhaps be a little Frankenstein-like in appearance, but unrivaled in capabilities. We would be free to pursue technology that provided the perfect fit for compensation management and the ideal platform for learning management with unlimited resources to generate any report at any time. The transcendence of anything that is truly best-in-breed should be accommodated in a structure that allows seamless integration without limits of security structure and database formats. The roadblock today is the lack of a common data structure that allows complete integration across all functions and features of everything focused on supporting the enterprise.
There are a few principles that hold fast regardless of your approach. Start by getting crystal clear on what you really need, not what you want, but what you really need to help support your team. Many companies purchase elegant Human Capital Solutions and end up deploying a minimal people data base that is used to generate payroll. Once you understand the definition of a requirement it becomes easier to assess the difference between needs vs. desires and the selection process gets easier. Now before we engage the debate further let’s establish some consensus in vocabulary. Best-of-Breed = The best product of its type. Companies often purchase software from different vendors in order to obtain the best-of-breed for each application area. Taking the best-of-breed approach means you are in control of choosing the ‘best’ software for your company, so you need to be really clear about your requirements before assessing the market and selecting your chosen provider. The best-of-breed approach will only succeed if the systems you implement are connected, so data is always accurate and up to date. Look for vendors and products that have proven integrations, APIs are ideal!
A fully-integrated or unified HCM simply provides a range of HR functions in one system. These functions often include as a minimum a workforce database, time and attendance, leave management, and may also offer payroll, performance management, recruitment, onboarding, talent management and even learning administration. Many unified solutions aim to provide end-to-end management of the whole employee life cycle. All these functions work off a single database or system of record that makes it easy to share information between function. Single-vendor solutions are appealing because they can be deployed across an organization all at once. The problem with this, however, is that employees have to rely primarily on the products in a suite, regardless of whether they’re the best solution for the task. This can result in having to use programs and databases that aren’t fit for the purpose and result in poor user adoption. Let’s see where our panel of experts go as they explore this contentious topic.
Best of Breed versus Single Integrated HRIS – Scott Smith
As a management consultant over the past 35 years, I have heard strong arguments on both sides of the issue regarding having best of breed components versus a single integrated Human Resource Information System (HRIS) environment. However, I have always come down on the side of a single integrated Human Resource Information System HRIS.
The reasons are simple – an integrated HRIS:
- has a lower total cost of ownership.
- eliminates interfaces between best of breed applications.
- creates common user interfaces, language and syntax across the enterprise.
- simplifies implementation as skills are transferable across HRIS components.
- provides a platform for standardized and unified data.
Let’s look at each of these:
Lower total cost of ownership and interface elimination. With a single platform there are economies of scale with the vendor of choice. It’s typically less expensive to have a single subscription fee than multiple users’ fees for multiple applications.
A single HRIS also reduces the cost of ongoing maintenance due to the reduction of interfaces.
A single integrated HRIS environment assumes a single software provider can provide all aspects for a complex HR environment. A best of breed approach would require interfaces be developed and maintained between the following HRIS components. Not to mention that with a single integrated HRIS, updates and upgrades are coordinated by a single vendor, further reducing the cost of interface and data maintenance.
- Core HR (system of record for employee data)
- Talent Acquisition and Onboarding
- Benefits Management
- Performance Management
- Employee Relations
- Payroll/Time entry
- Work Force Management
- Learning Management
- Safety and Health
- Absence Management
- HR Service Delivery (ticket management and resolution)
Common User Interface:
A single integrated HRIS creates a user experience that is common across the HR department. Ease of use, sharing of duties, common language and syntax create an HR department that finds it easier to communicate and resolve issues, collaborate and decentralize many everyday tasks.
Ease of implementation: Large scale implementations are never easy. However, implementing a single integrated HRIS environment allows all of the above components to operate on a platform that has a consistent user interface and would not need custom interfaces to transform data, to move data or “talk” to each other. Reporting from the single environment is typically easier too. No need to define multiple systems to the reporting tool and rationalize and/or normalize data for consistency in the reports.
Platform for standardized and unified data: A single integrated HRIS provides a platform to standardize and unify data. The best of breed approach creates non-standardized and non-unified data which makes it difficult to do analytics and basic reporting across applications.
In conclusion, a single integrated Human Resource Information System has a lower cost of total ownership, requires fewer or no custom interfaces, creates a common culture and user experience across HR, is easier to implement and provides a platform for standardized and unified data.
It Doesn’t Have to be This Way (Roy Altman)
Companies are faced with the conundrum of implementing the entire HR suite of modules from the same vendor or to pick and choose “best-of-breed” point solutions that best address their needs. There is no right answer. It always depends on the individual circumstances. But my observation is that most companies’ strategy (to the extent they have a strategy) it is to consolidate on a single vendor.
Getting companies to buy all modules from a single vendor has been the vendors’ aim for decades. Oracle, SAP, PeopleSoft in the ERP era, IBM in the earlier days and Workday and UKG today all employ the same goal to expand their footprint so that companies will adopt all modules. There are some tangible benefits: the modules from a single vendor are pre-integrated by the vendor, and companies realize that integrations are not easy. Parts of the suite are developed in a unified way: based on the same programming design and data model, so that reporting and security spans across modules. There’s the “one throat to choke” factor: if anything goes wrong, that single vendor is responsible for fixing it; there is no opportunity for them to blame another vendor of a module in the application stack. Then there’s the FUD factor (fear, uncertainty, doubt): once you decide on your strategic partner, there’s the feeling that nobody ever got fired for buying everything from that vendor.
But there are drawbacks to this approach. Many of these application suites are built by acquisition, not designed in a unified way. Although they are integrated by the vendor, each module looks and works differently and runs on different databases, so the user experience is as if it was a different product. No vendor does everything well: each of the product suites have one or two weak links – modules that haven’t been enhanced as much as the rest of the suite. Even the industry giants don’t have endless funds to devote to R&D for all modules equally. There may be a function that is strategic to your company, such as talent acquisition or compensation, and having a module that doesn’t meet your requirements will hinder that strategy. There may be some functionality your vendor of choice doesn’t provide at all.
Even if a company consolidates on a single vendor, there will always be software from a different vendor in your application stack, in which case you are ultimately responsible for the integrations. There are different levels of integration: batch flat-file transfers, near real-time integrations using web-services API’s, and interoperability, whereby the integration appears seamless to the user. The vast majority are batch flat-file transfers – the tried-and-true method that’s been dominant since the 1980’s, which are limiting and fragile. We should strive for interoperability, and companies should make integrations expertise a fundamental part of their IT competencies.
My observation is that companies are consolidating on a single vendor, and I’ve actually seen companies convert from best-of-breed point solutions to inferior products from their vendor of choice. But it doesn’t have to be that way if they have a plan for integrating to achieve interoperability.
Point-Counterpoint: – An Integrated HR Technology Solution or a Best of Breed Approach? (Bruno Querenet Onfroy de Breville)
The number of potential HR Technology solutions you could choose from is huge. It is divided in so many segments, and those are evolving at such a high speed. What was covered yesterday by one master application, such as a Learning Management Solution (LMS) for Learning and Development, or an Applicant Tracking System for Talent Acquisition, is now covered by a set of applications with an aggregation /integration layer. Outside of the core HR Management System, you could therefore think about a dynamic set of ecosystems covering the different functional areas that you would like to address to support your HR organization: You would have one for Learning, one for Staffing, one for Employee Listening, one for a Talent Marketplace, one for Diversity and Inclusion, one ….
But is this the solution?
If you do so, you will have to make sure that all of those systems can be introduced rationally to the end users, employees, managers, executives or contractors. This will probably lead you to introduce a new integration layer so that users won’t have to learn different user interfaces and figure out, by themselves, which application to choose and launch. You will create a typology of events and, for each, guide the users on what to do and where to go.
You will also realize that some of your metadata, some of the taxonomies required to make some of your solutions work should be duplicated in different solutions and, therefore, should be synchronized or you would bear the risk of divergent or incongruent outcomes. For examples, you may have a skills database in your ATS, but also one in your Learning Experience (LXP) solution, in your Talent Marketplace or career management system. The profile of your employees may be tracked differently in those environments and in the tools used in “the flow of work”, creating the feeling that systems do not talk together, and that the integration layer is left to be managed manually by the users.
Think also about the support required from a large set of providers, some of them growing nicely, some of them missing the pace of change in their market segment, some suddenly overlapping as the market evolve, and consolidation occurs.
Therefore, why not consider an integrated solution?
All of the points mentioned above would be addressed, but I can see what you could say: Are you then ready to put all of your eggs in the same basket? Are you ready to go for a solution that may be great for some functional areas but weak or not even relevant for others?
There are some really great integrated solutions on the market today from companies that are here to stay, I mean Workday, SuccessFactors, Oracle, UKG, ADP or others. Why not look at them? Just pick the vendor that matches your critical needs, and you are most aligned with in terms of culture, approach to building solutions, and just pure human chemistry between you and them.
Now, you may feel that they are playing catch up in most functional areas but, in reality, their different functional modules, in most areas, are good enough and may even force you to focus and define processes that can be supported and are addressing your business needs.
Think about where you need to go over the next 3 to 5 years and enjoy the flexibility that an integrated solution could provide to you.
There are many variables to consider before you find the right Human Capital Solution system for your business. No single integrated system or combination of best-of-breed modules is likely to fulfill all requirements for every company. The good news is that this is a topic of significant discussion and analysis and the comparisons of pros and cons of both approaches will help ensure that you remain focused on your needs and not the glamour of the vendor’s marketing.