Best-of-breed vs integrated HRMS: which should you choose?

Bespoke software curated to your particular business requirements or off-the-shelf ease and convenience? It’s an age-old question in the world of HRMS: a selection of best-of-breed modules, each designed for a specific function or an integrated, do-everything software suite?

As you’d imagine, there is no single clear answer. What’s best for your organization depends solely on what you’re looking for… what you need. So, let’s take a look at the pros and cons of best-of-breed HRMS and integrated suites to help you decide.

Best-of-breed HRMS

Each best-of-breed software module aims to excel in one particular HR function, such as talent management, workforce planning, or payroll. By definition, the features in such software modules tend to win out over the equivalent offered by an all-in-one integrated HRMS suite.

The key advantages of best-of-breed software include:

• Installation and implementation is often quicker and easier due to the narrower scope and impact of software seeking to fulfill a single function.
• The tighter focus on just one HR function means that best-of-breed options often come with more features for users – e.g. gamification and social media use are more likely in a best-of-breed recruitment package compared to the recruitment element of an integrated HRMS.
• Fewer users compared to an integrated suite means fewer employees using each system so training is simpler.
• Best-of-breed software depends on being, well, the ‘best’… Hence, updates tend to be frequent. It’s easier for providers to make changes to focused, niche software.
• Being focused on specific niche means best-of-breed vendors often bring best-of-breed expertise to the table.
• Switching systems is easier because the disruption is only to one of your HR functions. Your business won’t grind to a halt if you decide you want to switch to a different software vendor. 
• Similarly, with multiple best-of-breed modules, there’s no reliance on a single vendor; lessening and spreading the risk and impact of a provider unexpectedly going out of business.
• Best-of-breed systems are by nature less complex than integrated suites and are usually designed to be easy to use.

Overall, best-of-breed software tends to be best-suited to companies which are either looking for flexible solutions (such as startups and smaller businesses) or specialist and/or advanced functionality for which a general HRMS is inadequate.

Need some help with your HRMS selection journey? Check out our comprehensive nine-step guide to HRMS selection

Integrated HRMS

A fully-integrated HRMS offers 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, and even talent management. Many integrated HRMS packages aim to provide end-to-end management of the whole employee life cycle. All these functions work off a single database – a single system of record – making for easy sharing of information between function. The main points of an integrated HRMS include:

• It works out of the box. With multiple best-of-breed modules, work is often needed to ensure compatibility and seamless communication, requiring middleware and patches to transmit and ‘translate’ information between different software packages.
• A single vendor contact for all of your HR software support needs means that if you have a problem with an integrated HRMS there’s only one company you need to contact.
• Logically, an HRMS means lower costs. A strategy of combining several best-of-breed packages to meet your HR  tech needs can be more expensive than a single solution.
• The simpler implementation and maintenance reduces the burden on your IT team if you have one (or your outsourced IT providers if you don’t). The technical challenges are greatly reduced with an integrated HRMS.
• That said, the greater number of users usually associated with an HRMS means implementation and initial staff training costs may appear higher but… the single interface means your users are not starting from scratch when learning about each automated HR function – having mastered navigating the system, users have the basic foundation for using the full range of functions.  When compared with the cost of multiple best-of-breed implementations, an HRMS suite can still be better value financially.
• An integrated solution has little likelihood of problems around exporting or integrating data. There are no compatibility or format issues between modules because an HRMS works as a streamlined whole (or should do!)
• Similarly, the single database means you eliminate the need for multiple data entry and therefore greatly reduce the possibility of human error and inaccurate or inconsistent data.
• A single point of access or single login for all your HR technology makes life simpler for users.
• The uniformity of software across your HR functions simplifies processes (and access to those processes) for employees. A single user interface gives a familiar and unified feel to all your HR technology.
• For employees, the same HR software (with the same interface and experience) handles everything from the initial job application and recruitment, through performance management and progression, to resignation or retirement. This uniformity means that the HRMS effectively becomes a part of your HR team’s brand.
• It’s far easier to generate reports using data in a single suite rather than drawing (potentially incompatible) data from multiple modules.

The importance of these benefits will vary significantly based on the size and structure of your business. As a general rule, an integrated HRMS can be better suited to large companies, or those looking for a long term solution that will accommodate business growth. However, that’s not to rule out small to medium enterprises. Integrated HRMS suites come in a variety of shapes and sizes. Some are relatively basic, offering the basic HR functions, others are all-singing, all-dancing showcases. 

A final word on integrated HRMS: if you go the integrated route, ask some probing questions during the shortlisting and demo stages of software selection. Some systems are more integrated than others and some of the above advantages may not be available you buy what turns out to be a collection of best-of-breed standalone modules, ‘loosely stitched together’.

Is there a perfect HR automation option?

Short answer: No.

Slightly longer answer: There are dozens of variables to consider before you find the right HR system or systems for your business. No single integrated HRMS system or combination of best-of-breed modules is likely tick all the boxes for every company. However, by being crystal-clear on your current and future HR automation needs, you can search out the right solution for  you. Using the above pros and cons as a starting point, you can ensure your HRMS search is focused on your needs and not the glamour of the vendor’s marketing.

_{Originally written by Anna Roberts.}