Organizations spend billions every year on talent management software, but they often do so without a vendor assessment checklist. But as a finance leader, you should have a methodology in place to inform and support HR leadership as it relates to strategic vendor assessments. What should be in your assessment checklist from both a finance and HR perspective?
According to Forbes, HR technology is a rapidly-growing $15 billion industry. But according to ERE Media, "80 percent of all corporate talent management technology purchases don't produce a measurable ROI for the corporation within two years. Talent technology is a natural extension of strategic workforce planning, according to the ADP Research Institute® report, Strategic Drift: How HR Plans for Change. So as a finance leader, you should strive to have game plan to assess whether the organization's technology partners are truly helping you put the right people in place at the right time. A detailed checklist for assessing talent-tech vendors and their products should be able to help have a clearer understanding of the ROI of your technology investments.
Your vendor assessment checklist for talent-technology vendors will naturally evolve over time and change as your organization's priorities change. But from the start, it should take into account goals that are common to both HR and your organization as a whole — namely, finding and keeping the best and most productive hires possible.
A sample checklist could include the following:
1. An Excellent Talent Acquisition Process
Simply inserting technology into poorly designed talent processes can reduce your chances of success. For example, do your departments communicate effectively? Does HR understand management's needs and functions and vice versa? Do your recruiting efforts interact with such existing technology as social media and your website?
2. Proven Track Record of Results
Look for quantifiable job performance of new hires, better productivity and innovation from employees and increased revenue generation. Data is vital to this process and can help you understand the correlation between the ability of the technology to find people and the history of success that those individuals have exhibited.
3. Desirable Product Features
Does the technology perform to its specifications? Do you actually need all the individual features? Or can you save costs by eliminating one or more?
As part of your vendor assessment, consider asking about this sales claim issue:
- Cost and Time Estimates
Remember that low purchase prices and initial cost estimates can often be part of the sales process. A survey of your prospective vendor's users can reveal any major variation between estimates and reality.
Key Vendor Assessments
Other critical vendor assessments include:
- Quality of service — Talk with a cross-section of a vendor's existing customers, selected by you, about the vendor's response time and the client's satisfaction rates.
- Stability — What background does the vendor have? Will another vendor likely buy them in the near future?
- Security — Whatever vendor you go with will probably have access to your organization's most sensitive data. It may be worth engaging a data security expert beforehand to examine protections.
- Acknowledgment of potential problems — Ask for a list of the potential troubles you might encounter during implementation and operation and possible solutions to each issue. A vendor's inability to be proactive enough to have considered these possibilities could be a red flag.
- Pay for performance — Is the vendor willing to refund or reduce part of your cost based on subpar performance of the product?
Talent tech will likely be one of your organization's largest investments now — and in the future. Understanding what you really need from your technology services and then creating a checklist to ensure a vendor's product meets those needs should be a vital component of your vendor acquisition and assessment process.
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