4 mistakes to avoid when preparing your HRMS RFP

A KPMG survey found that 80% of HR departments are looking to spend the same or more on HR technology in their next budget. At the very least, this suggests that businesses are seeing a benefit in up-to-date HR technology and if you’re one of those businesses, you’ll be wanting to invest based on a rigorous RFP, or request for proposal.

The importance of an HRMS RFP

Why bother with RFP preparation? Put simply, because when you’re selecting a new HRMS, you:

a) Need to know exactly what features you need, including which features will benefit your business most;

and,

b) You´ll be looking at different products from different vendors and you need a way to fairly compare apples with oranges.

A well-drafted RFP is a way to achieve both those goals. However, as with any business process, there are some pitfalls to be avoided…

For more information, try our HRMS RFP Guide & Template.

1. Overstuffing your list of required features

Naturally, you want an HRMS with all the bells and whistles. And any vendor will be only too happy to wax lyrical about their latest feature or app. However, you need a system that will further your business and while great benefits can come from exciting new functions (get stuck into those predictive analytics!) it’s also true that a system that simply streamlines your existing procedures can be equally transformative.

So, talk to your stakeholders and put together all their requirements, but make sure it’s a real conversation so you can understand the relative benefits and therefore priorities of the features on their ‘want list’.

2. Forgetting the future

While we’re on the subject of the requirements list, remember to specifically consider your business’s future needs. Whether you’re planning expansion, diversification, new products and services, maybe even a merger… then your HRMS needs to support that.

3. Not digging into the pricing information

HRMS tends to come in one of two flavors of pricing model: the once-popular upfront license giving your perpetual usage, or the now-ubiquitous subscription/pay-as-you-go model common for cloud systems.

However, whichever you opt for, check what may lie beneath the surface of that price ticket. Business technology always comes with ‘hidden’ costs, some are attached to the system itself, others are a consequence of its installation and use. Use your RFP to explore the cost of:

• System installation – including data cleansing and migration, and any initial hardware costs if you’re deploying your HRMS on-premises.
• System upgrades and maintenance – you need to stay current but what does it cost?
• Employment costs – the cost of employing anyone needed to support the system.
• Outside consultancy – a common option is to engage an HRMS consultant to help with selection, implementation, or both.
• Indirect internal costs – consider any related corporate overheads, such as the cost of staff time spent in training on the system.

4. Accepting proposals that don’t use your template response form.

You may feel a little pedantic insisting that any interested vendor present their system to you by completing the standard response form in your RFP, but the key is in the word “standard”. If every vendor supplies their HRMS information by answering the same questions and providing that information in the same format, your task of comparing and fairly judging the different systems becomes immeasurably easier.