Buying Strategies

Best Practices for Buying an HRIS

February 15, 2021
Brett Ungashick

There are simple skills and processes that can help buyers be more effective when purchasing HR software. However, those processes are rarely taught in HR programs or SHRM continuous learning lessons. Here's a quick guide:

Many HR software buyers are uncomfortable going into the software market and beginning a new HRIS evaluation. And this is quite understandable.

Buying software has, historically, not been something that has been taught in HR programs or covered in SHRM continuous learning sessions.

However, in our new era of work, having the skills to effectively buy HR software can make a world of difference for an HR leader and their organization.

The process of effectively buying HR software can be boiled down to a few tried-and-true steps. None of these steps require special technical skills or knowledge; they simply require a concerted effort.

Here's how you can be a savvy software buyer:

1.) Start Internally

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Determine Requirements

Before you go to market, make sure you know exactly what you're looking for. If you don't know exactly what you need, then it will be very hard to discern between different options and you'll also open yourself up to being sold unnecessary features and functionality.

Most buyers know this, but most buyers also make the mistake of listing out a bunch of features that they need, rather than starting the requirements building process at a higher level.

We always recommend our clients boil their needs down to five key outcomes. If this project could only succeed in five areas, what would those be? Often that can be: better integrations, better reporting, more responsive support, fewer systems, more scalability, etc.

Get your key outcomes together and agreed upon, then start to think through functionality and features.

Build Consensus

Get your team together and bought in before you go to market. The last thing that you'll want to do is spend hours falling in love with a certain software platform, only to find out that your teammates aren't onboard with the decision.

We always recommend having a project kick-off call with your cross-functional stakeholders. This meeting helps you bring allows you to hear from your key stakeholders early on and it makes the project real for everyone.

In this meeting, ask each member of the project team two questions:

  • What do you hope to get out of this transition?
  • What do you need to see from a vendor to be comfortable enough to move?

Having this meeting will allow you to determine who are your project advocates and who are the people who you will need to work on, in order to get their buy in

2.) Shortlist Efficiently

Start Broad

Once you know what you're looking for, it's time to figure out who can do it.

Not to self-promote, but OutSail will do the shortlisting work for you at no cost, so save yourself the time and reach out. However, for people who like working independently, there are ways to shortlist effectively.

The first thing you’ll want to do is just start broadly. Build your initial list by canvasing review websites and blogs, and reaching out to your colleagues and peers to see which names pop up the most.

It will be easier to feel confident in your final decision, if you've already ruled out a number of competing options.

Narrow Quickly
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But how do you rule out options without getting on demos? I'm glad you asked. There are three ways:

  1. Missing functionality - Go to software vendors websites to see if any of them do not have key modules that are in your requirements (i.e., vendors that don't process payroll, don't have an ATS, etc)
  2. Size Match & Scalability - Go to software review websites and see what sized companies are predominantly reviewing these platforms. If all of the reviews come from companies with fewer than 50 employees, you'll know this is an SMB tool and might be too limiting. Vice versa, if all of the reviews are from companies with 1,000+ employees, you'll now this is an enterprise tool and might be too robust
  3. Low Market Presence - Check each software vendors' LinkedIn page to see how many employees they have, their Crunchbase page to see their ownership structure and funding. Also look at different review websites to see how many reviews they have. You don't need to go with the biggest option in the market, but the vendor should have a decent sized team, some customer reviews and growth potential

3.) Evaluate Discerningly

Prepare for Demos

Don’t show up to the meetings empty handed and expect the salesperson on the other end to give you all of the answers you're looking for.

Your job is to be the one driving the evaluations, not the one who gets sold to.

Create a meeting agenda to make it clear to the vendor what needs to be covered. Come up with key questions and workflow scenarios that you want to see the vendors respond to in real-time.

A little preparation will go a long way in making sure you get everything you need out of your 60-90 minute demonstrations

Align Around Key Criteria

Don't forget about that key criteria that you worked so hard to build in the first phase.

When you're preparing for your vendor meetings, build a scorecard tool that can weigh each of those criteria accordingly.

Also, make sure that when you're preparing your agenda and questions, you'll have a chance to cover each of those key drivers

4.) Select Confidently

Check References

References are a high variance resource. The right reference can really open your eyes to what to expect moving forward. However, many references are available because they had the perfect experience, which may not always be replicable.

Request each of your finalists to provide references. And be specific about what type of reference you want (i.e., someone who left the same platform as is, is in the same industry, built a similar integration, etc.)

When speaking to those references, get a real sense of what the day-to-day partnership is like. Ask about support turnaround times. Ask about the process of setting up integrations.

A great question to ask is always: What did you wish you knew when you were in our shoes?

Always Negotiate

Negotiations are the most underutilized step in the HRIS buying process. Buyers just assume that the list price is fixed and can't be moved.

But in our experience, almost every single buyer who negotiates ends up with a far better deal.

We've built a long guide detailing how to negotiate, but a few of the key things to keep in mind are:

  • It's a give and a take, so if you want better terms, you'll likely have to agree to signing a contract by a certain date
  • Your sales rep is your ally, so arm them with what they need to bargain on your behalf
  • Annual software fees are always more valuable than implementation fees

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Brett Ungashick
Brett is the founder of OutSail. He spent the early part of his career selling HR software before switching sides and going to work for the people buying the software.

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