There was a lot of wisdom and insight to be gleaned from ConnectingUp's recent technology conference. One thing was clear from conversations with attendees, and that is, many organisations (especially those in the NFP, charity, and social enterprise sectors) are still in the very early stages of their digital transformation journeys. Which makes getting educated about the ins and outs, (and the highs and lows) of technology, an essential part of the equation. As with everything in life (especially during the last twelve months), even technology itself must undergo a process of transformation in order to remain relevant. In this week's blog, we explore the evolution of HR software from product to platform.
When was the last time you counted all the different applications you use to manage your work and private life? According to Simform, there were 204 billion apps downloaded in 2019 and the average person has 40 apps installed on their phone. Waaay back in 2017, Forbes reported that the average employee uses 9.4 applications a day at work. Imagine how much that has increased in the last 12 months...? Even 9.4 is A LOT. How productive do you think it is to be jumping from one App to another, doing different things in different Apps? Or, perhaps even more frustratingly, doing the same thing in different Apps because those Apps that your department head or IT team chose for you don't actually communicate with each other? Do you imagine that employees can be efficient, productive, innovative, and agile in that type of environment? Highly unlikely.
Last year we published a blog about Sierra Cedar's annual HR systems survey, which produced the following important intel. Their in-depth analysis revealed that improved business outcomes are based on the presence of the following four factors:
Regularly updated HR systems strategy (10% better outcomes).
Regularly updated integration strategy (12% better outcomes).
Perception of HR, viewed as adding strategic value to multiple levels of management (23% better outcomes).
Culture of change management (28% better outcomes).
In the world of #worktech and #HRtech as we know them today, which technology opportunity provides the best foundation upon which to execute your HR systems and integration strategy? If you want to build a robust digital ecosystem that can generate the outcomes mentioned, your best bet is a technology Platform, (or more specifically in the context of HR, an HR platform). The Platform has taken the lead as the technology solutiuon that will free up the most time, energy (and money), making it possible for you (and your organisation) to then focus on adding strategic value to your business and building a culture of continuous change.
What's The Difference Between a Product and a Platform??
In general terms, a software product is a set of tools from a single provider that comes in one package. Everything contained within that package is designed to work together seamlessly, as if they were one single solution. However, problems can arise when you try to integrate new tools to extend the functionality that the package doesn't contain.
A Platform, on the other hand, could be classified as a collective of software solutions that also enables you to create an ecosystem of resources (including other solutions and applications) that help you to grow your business. Whereas a product can inhibit growth (or efficiency) because of a lack of connectivity, a Platform enables growth through connection. The value of a Platform comes not just from its own features and functionality, but from its configurability and its ability to connect to and integrate with other tools, teams, data, and processes.
As Scott Brinker, VP, Platform Ecosystem at HubSpot explains, it can be helpful to imagine a platform as a central place where different products connect. He says 'Almost every SaaS product today has APIs that let it exchange data with other applications. A Platform, however, plays a more active role in coordinating how multiple products work together. You can picture a platform as a hub, with spokes connecting other products to its center. The hub binds those disparate products together and orchestrates them in a common mission. A Platform creates a stable center of gravity for your tech stack.'
There are two main factors to consider if you're assessing product versus Platform in the pursuit of the best strategy to scale your business:
The software suite: everything in one box from one company.
The software Platform: technology that contains a suite of solutions, is highly configurable AND enables users to connect multiple different technology products from multiple different providers to build a seamless, interdependent digital ecosystem.
What Benefits do Software Suites Provide?
The concept of a software suite is reasonably straightforward. A software suite is a collection of applications and computer programs that have similar user interfaces and integrate with each other. They are also often created and owned by the same brand. A suite provides one unified software offering from a single vendor that includes everything you need under one roof. The benefit of a software suite is that they are designed to remove the complexity of building your own digital ecosystem if you're using individual best-of-breed solutions from multiple vendors.
A software suite is meant to mitigate the risk, cost, and time that is usually associated with making multiple solutions in your digital ecosystem play nice. That is, they circumvent the challenges that integrating multiple solutions can create, providing a one-stop-shop instead.
If you consider the HR software market, vendors that offer a suite of HR software provide a collection of HR solutions that already talk to each other and share data seamlessly, without the need for integration. Essentially, a successful suite provides multiple benefits: a core set of features that increase efficiency, remove complexity, and reduce cost.
Things to Consider When Choosing a Software Suite
Whether you’re switching software suites, or choosing one for the first time, here's a list of parameters you need to consider when researching which suite will best serve your organisation's unique fingerprint:
Functionality: What are the essential tasks and processes that a suite must be able to handle? Create a list of must-have, nice to have, and possible future scenarios that your business will or might need.
Data: Do you have a preference about whether to share and store data via the cloud service or through other means?
Cost: How many users will you need to pay for and how often do you wish to pay?
Necessity: Do you need all the applications in a suite? Can you pick and choose which solutions in the suite you use (and pay for), or are you obliged to use all of them, thus increasing your costs?
Adoption: How quickly can your organisation get up and running using that suite of solutions? What is the implementation timetable? Will they need training for any of the applications that they’ll need to use?
Limitations of Using a Software Suite
The challenge for software suite providers, whether HR or not, is that they must have the development capacity to consistently evolve and upgrade, otherwise as technology evolves, the suite might not be able to change with the times (which then restricts the ability of your business to grow and evolve). A suite also runs the risk of becoming the jack-of-all-trades, master-of-none. But this is precisely why suites can be good for small and mid-sized enterprises - you get everything you need under one roof.
However, just because a suite offers multiple solutions that pass data seamlessly from one solution in the suite to another, that doesn't guarantee that those solutions can be configured to meet the unique needs of your organisation. Nor does it mean that the software suite integrates easily with your other business systems that sit outside of the suite.
It is not uncommon for customers to discover that the software suite you just purchased might well have the functionality you need, but that it can't be configured so that you can use it in the way you need to use it. Meaning you end up changing how you do things to meet fit the restrictions of the software suite, as opposed to the other way around. This means you find out too late (after you've signed on the dotted line) that the software you've just purchased is a total lemon in terms of your needs.
Don't be fooled by vendor marketing hype and sales teams spruiking 'software suites' (or even software suites labeled as 'software Platforms'). Just because you can get everything under one roof and the vendor's software has an API, that doesn't necessarily mean the software will do what you want it to do in the way you want it to. If you get caught out this way, you will then have to shoehorn your tasks and processes into their system architecture, thus defeating the purpose of going for a more integrated collection of solutions (that a true Platform offers).
If you're considering a vendor that provides a software suite, make sure you ask them these questions:
If the suite doesn’t have a feature you want, or it doesn’t implement it in a way that you need it to operate, is the software configurable and flexible enough to enable you to change it to suit you (without the need for code or expensive developers)?
If significant changes happen in the other systems in your organisation's digital ecosystem, how does the suite's vendor implement updates so that those other systems still integrate with the suite?
If you find out that the suite doesn't provide you the functionality you need in the way that you want it, what is the process for changing to a different vendor (and how much time, energy and money is it going to take to make it happen)?
If 2020 was anything to go by, the reality is that HR is getting more and more complex and the HR tasks around managing people are increasing exponentially. Even seemingly simple tasks can get complicated if the software suite you've chosen doesn't play nice - with you or with your other business systems. If you don't do your research properly, you and your business will find yourself in a situation where complexity has increased instead of decreasing, and everything starts to take longer and has become more frustrating for the end-user. The entire employee lifecycle then becomes riddled with bottlenecks and data issues, from onboarding new hires to creating rosters and scheduling shifts, to managing performance, and even keeping employee data up to date.
Why Use a Technology Platform To Manage HR?
One solution to the constraints of a software suite, especially for managing your employee data, is to look for a suite of solutions that is built on a software Platform. A platform doesn’t try to do everything itself, but instead provides a foundation on which many other specialised products can also be stacked (or integrated). For example, an HR Platform offers the benefit of being much more adaptable than a suite. Meaning that Platforms come with the added bonus of being highly configurable and easy to integrate with other solutions. Make no mistake, software integrations (especially HR software integrations like Payroll) can be extremely challenging. This is why many vendors don't like to do them. Especially if they haven't built their solution/s on Platform infrastructure. The process is too hard.
To the untrained eye, a Platform may initially appear suite-like, because they both provide a collection of features 'out-of the-box.' However, unlike a closed suite (with little configurability and the need to use a developer to make changes - if the vendor gives you access to the API and lets you change the code), a Platform is inherently open, making it available for partnerships with other vendors or providers (including those that don't exist yet).
In a software suite, you are more likely to find features that are fixed or static and don't provide much flexibility (meaning you have to fit your business to your provider's software, limiting its capacity to meet your operational requirements or curtailing the efficiency of your digital ecosystem). A Platform enhances your digital ecosystem by way of integrating evolving third-party solutions and giving you the capacity to customise the Platform functionality to match your unique organisational fingerprint.
A Platform is more than a collection of disparate features. Essentially, a Platform has one primary purpose, which is providing a foundational service or master data repository that other software and services can then leverage. Platforms create networks (as opposed to just being a collection - or ecosystem - of products or services). Platforms are, on one hand, digital ecosystems, but they also provide an added layer of benefit by facilitating and supporting the seamless exchange of information, content, or products between two (or more) interdependent systems.
A Platform makes it possible to integrate applications, teams, data, and processes under one digital roof. An HR software Platform (for example) has the capacity to act as the nucleus of all the business systems your organisation uses to manage operations. The Platform also makes it possible for you to configure the nucleus suite of solutions (in this instance HR) to meet your needs AND it allows you to connect all your essential business systems to seamlessly manage the flow of data using integrations.
In today's digitally enabled business landscape, the integration and configuration capabilities are just as (if not more) important than the product (or suite of products) as a stand-alone entity. That's because nothing stands alone in the digi-sphere. Nothing.
HR Platform Benefits
The technology Platform (including the HR Platform) model is set to completely transform business as we know it. As Josh Bersin says - you need an HR system (and really, all the business systems you use should operate in the same way) that is more flexible than rigid. More configurable than restrictive. More, as Bersin puts it, 'like a Swiss army knife and less like a chain saw.' What he's pointing to is the fact that across the board, business needs Platforms instead of just products. The new workplace needs technology that provides organisations with a 'toolbox' that enables you to build what you need, in addition to having configurable Apps, Wizards, Widgets, and Dashboards built-in (out-of- the-box). This gives you the best of both worlds. The ability to get up and running quickly when you first implement your new HR software, plus the added benefit of being able to customise the system to meet your needs through built-in configurability. Platforms should make it possible to do this without resorting to needing a developer to touch the code. What Bersin is saying is that you need configurable, Codeless, Cloud HR tech. That is what makes truly adaptable HR software.
Here's why the technology Platform model matters, and why it should matter to you:
Platform models build a reciprocal, self-sufficient ecosystems: Platforms can generate 'two-sided network effects,' meaning that demand is created from the supply of both buyers and sellers, providers and users, or creators and consumers.
Platforms solve for connection and efficiency issues: Platforms create a centralised location for the tools and applications businesses use to run and expand, from taking care of employees and customers to collaborating with other stakeholders. If your business needs to generate efficiencies, then Platforms solve for the reality that time, energy and money are in short supply, especially in many small and medium-sized enterprises. Better yet, Platforms (upon which software suites have been built) provide a one-stop-shop for all aspects of the end-user’s day-to-day operations and business processes.
That's where combined Platforms and suites really come into their own. They facilitate seamless interactions and transactions between all the different applications and systems that form part of an interdependent ecosystem (including the product suite that's built on that Platform).
Why Should You Choose an HR Software Platform?
Working manually in Excel spreadsheets, onboarding new employees using paper forms (and then having to input the data into a digital system that doesn't quite meet your needs but at least enables you to pay your people) takes up a lot of time. Digitisation, automation and optimisation free you up to focus on more strategic HR initiatives that will make your business stand out from the crowd, like culture and employee wellbeing. An HR software suite makes it possible for you to automate the entire employee lifecycle, from hire to retire, including all the manual HR tasks, compliance requirements, and all the other HR admin that takes up so much of your time.
Platform configuration tools extend what a product or software suite make available by also making it possible for the end-user (that's you) to do more with your software. Whether it's a dashboard, a wizard, a widget or an APP, configuration tools essentially reduce the time and knowledge you need to bend software to your will. They also remove the need for you to spend time or money making changes at the code level to get that software to do what you need it to do to meet your unique needs. Not all software is created equal however, and there's no guarantee that an HR software suite will even let you reconfigure it or make changes at the code level. This is where Platform configuration tools become even more important. They make it easier, faster and cheaper for you to get up and running with minimal technical knowledge required. When your HR software is flexible and adaptable, that means your business can be too.
What you also want to look for in an HR software platform is an implementation and ongoing user experience that's more like a continuous flow. This means the system architecture has to be built around a workflow engine that can be configured by users and customised for each company. Because a platform offers so much more flexibility than a suite (or single solution), implementation is not a process of simply 'setting up the system' but instead one of walking through your processes, configuring the functionality to meet your needs, and then turning them on both 'end-to-end' and 'in the round,' (connecting them with other business solutions you're using in your digital ecosystem). These types of Platform benefits constitute the holy grail for growth, which is scale. Ensuring that the HR software Platform you're using has the built-in capacity for you to scale your business without having to go back to the drawing board with your workplace tech (or get in a developer because you need to code) is critical to being (and staying) agile.
If you're in the market for HR software (whether you're only just beginning your digital transformation journey, or you want to change your provider because what you're using right now doesn't fit your needs), Josh Bersin offers this advice. You need to look for a unique blend of adaptability and flexibility, as well as assessing the ease of configuration and use. Bersin encourages everyone to think about these issues as you assess HR platforms for your business.
Things to Consider When Selecting an HR Software Platform
If you're in the market for an HR software Platform (or any technology Platform for that matter), then ask yourself (and the vendor where relevant) these questions during the research and selection phase of your project:
How well do the core features of the HR Platform serve your business ecosystem needs?
Does the Platform also provide a suite of HR solutions that meet the majority of your employee lifecycle management needs under one roof?
How big is the current ecosystem of integrated systems/solutions, partners and third-party developers around the Platform? Is it healthy and growing, or is it limited and restrictive?
How many of the solutions built on the Platform can be configured without code or the need to pay for a Developer to customise the software to meet your needs?
How easy is it for you to work with the vendor's API to fully access your data and build your own custom enhancements? How stable are those APIs?
Even though it might initially be more work for your organisation to harness the power of a technology Platform, the resultant ecosystem/network effect generates sifnificant efficiencies by providing seamless data-sharing across your organisation in a manner that is tailored to your business.
Another factor to consider is that when using a Platform, it’s easier to incorporate technology changes and new innovations into your ecosystem. This raises the stakes, particularly if you're a growing business. If you’re going to use a Platform as the foundation for other product purchases (or even custom development), make sure that it’s a good long-term solution. One that will carry you forward as your business adapts to growth and constant change.
Cultivating a digital ecosystem is both a technical and business-critical mission in 2021 and beyond. Make sure you assess just how much your chosen HR Platform provider invests in integrations, configurability, and building their own network of third-party solution relationships. A word of warning - this is much easier to say than it is to do (beware of the suite dressed up in a Platform’s clothing).
Build an Adaptable, Agile Business That's Designed For Growth With an HR Software Platform
The Platform model has revolutionised the economy and how organisations large and small conduct business. Not only do they bring together consumers and producers and create a valuable network, but they also solve countless connection and efficiency issues.
If you’re juggling dozens of technology tools, or even just multiple HR solutions, consider working with a Platform to help streamline your tools, teams, data, and processes. According to Sierra Cedar, the average organisation now has 11 systems of record: the typical recruiting department has more than 10, and the typical L&D department has almost 20. So the capacity to architect an ecosystem/network through the integration of solutions and Apps continues to be important.
Take heed of the lessons from 2020. In today’s world, you need agile systems that can adapt, morph, and change to meet new (unforeseeable) needs. Follow Josh Bersin's advice and look for configurability and adaptability in all the HR platforms you subscribe to from this point forward.
If you're an HR Professional who is buried under a pile of paper forms or Excel spreadsheets, there's never been a better time to start your digital transformation. Not sure where to start? We've created this quick guide to help you evaluate HR software Platforms. Just click on the button below :)