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© 2013 Towers Watson. All rights reserved.

Explore the Possibilities2013 HR Service Delivery Forum

Evaluating HR Technology and Systems: Preparing for a New Investment

© 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.towerswatson.com

Agenda

l Welcome and Introductions

l The Basics of Sourcing for HR Technology

l What are the Most Important Factors in Your Final Selection?

l Should a Vendor Search Always be Undertaken?

l The Sourcing Processl Point of View — The Buyerl Point of View — The Provider

l Common Mistakes

l Questions and Closing Remarks

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l Sourcing Agent provides over-the-shoulder advice and counsel to client organization

In-sourcedCo-sourcedOutsourced

l Sourcing agent works collaboratively with clientorganization in designing solutions

l Sourcing Agent performs most of the major work tasks

l Sourcing Agent designs and implements all work products

l Client organization reviews all sourcing agent output

Success is achieved when a true partnership between the sourcing agent and the client organization is established in any model

The basics of sourcing for HR Technology

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3

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5

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Create the Business Case andSecure Budget

Market Scan — Select Providers for Evaluation

Request for Information (RFI)

Request for Proposal (RFP)

Down-Select to Finalist Process

Contracting

A common six-step process

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Towers Watson’s sourcing methodology and approach

l Agreement on project plan, scope, approach, desired outcomes, roles and timing

l Agreement on business case specifications

l Understanding of current operations, costs and requirements

l Documented detailed functional requirements based on information gathered and RFP

l Short list of vendors to receive RFPl Vendors notified of timelinel Selection/evaluation criteria and priorities

for evaluationl Tools to assist with scoring of vendor

responses

l Final RFP distributed to vendorsl Consolidated response to vendor

questions

l Matrix of all vendor responsesl Agenda, demo scripts and report card for use

during working sessions/site visitsl Evaluation of vendors against selection

criteria; completed vendor scorecardsl Finalists presentations and on-site visits, if

appropriatel Interview guide for reference checks l Final report, including business case, with

recommendations based on evaluation criteria

l Business case and recommendations presented to steering committee

l Selected primary and alternative vendor

Project CharteringRequirements Definition and RFP Development

RFP Distribution and Vendor Management

Vendor Evaluation, Business Case and Selection

l Facilitate kickoff meetingl Understand business needs and

objectivesl Review activities and timelinel Review delivery model considerations

and discuss vendor landscapel Conduct data request for available

documentation and current costsl Gather and review existing

documentationl Leverage existing knowledge of staff

and/or current vendor

l Develop an initial straw model for requirements and the RFP

l Conduct working sessions to review and refine the straw model document

l Perform market scan and invite four vendors to provide brief overview

l Select vendors to receive the RFP according to initial requirements and knowledge of the market/market scan

l Notify the proposed vendors of the upcoming proposal, approach, scope and timing for their response

l Develop the vendor selection/evaluation criteria, priorities and scoring methodology

l Distribute the vendor packet (including the cover letter, RFP, instructions, etc.) to the potential vendors

l Gather and respond to all vendor questions

l Collect and review vendor proposals and consolidate in a matrix for ease of comparison

l Conduct a working session to review the responses, identify areas for follow-up and select the finalists (up to three)

l Participate in up to three finalist presentationsl Tailor agenda for on-site meetings with the

finalistsl Prepare final summary with recommendations

based on evaluation criteria and scoring methodology, and submit for internal approval

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What are the most important factors in making the final provider selection?

External Research

• Ease of use

• Provides simple manager and employee tools

• Solves reporting and metrics needs

• Best long-term solution• Towers Watson research

• Forester research

• Gartner research

• Look and feel

• Ease of adoptability

• Ease of use — User interface

• Functionally rich — fit with business requirements

• Business processes and workflow

• Reporting and Query tools

• Overall flexibility and adaptability

Fit with Stakeholder Criteria

• Fit with functional requirements

• Fit with technical requirements

• Vendor stability and reputation

• Ability to meet critical requirements

• Performance — flexibility and tools

• Approach to delivering services

• Services offered

• Governance model

• Risk mitigation

RFP Scoring

Functional Business Case

• Implementation and one-time cost comparison

• Ongoing and maintenance costs

• Expected Return On Investment

Financial Business Case

Right Solution

Technical Standards

• Fit with current systems and infrastructure

• Overall tools and technology

• Fit with security requirements

• Backup and recovery

• Calls and scoring of references

• Site visits

• Technical due diligence

Reference Checks and Due Diligence

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Should a vendor search always be undertaken?

Org is invested in ERP (SAP,

Oracle, etc.)

HR has documented its requirements

ERP has an HRMS that meets

requirementsHRMS is a highly

rated system

Avoid sourcing costs and

negotiate with ERP vendor

Pros ConsYou know the vendor and the service levels they provide

Make sure you are not imposing your old ways onto this search

Able to implement faster and cheaper by avoiding a lengthy RFP process

May miss out on innovations with other vendors

Best opportunity for seamless integrations and process efficiencies

May feel that due to cost reductions, willing to give up features

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The sourcing process — Different views

l We are going to walk through an illustrative evaluation timeline and process from the point of view of the provider and the vendor

l You might be surprised at the reactions and expectations that both parties exhibit at the various stages in the process

l As we go through this exercise, think about how YOU would react, and how that may be perceived by the other party

l Let’s meet our characters…

Mary St. CyrVP, HR TechnologyParadise Enterprises

Jonathan SearsVP, Sales and MarketingWidget HR Systems

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The sourcing process — TimelineWeek

1Week

2Week

3Week

4Week

5Week

6Week

7Week

8Week

9Week

10Week

11Week

12Week

13Week

14Week

15Week

16Week

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ProjectChartering

Define Requirements &Develop RFP

Distribute RFP —Vendors Respond

Site Visits

EvaluateResponses

Finalist Presentations

Final Report & Evaluation

Invitation to Bid

RFP Review/ Define Evaluation Criteria

Working Session — Review Vendor Responses & Select Finalists

Award Business

Project Management

Project Kickoff

CheckReferences

Vendor selections generally take 12 – 16 weeks.

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Common mistakes

l Don’t write the RFP before the needs are fully understood and the goals are clear

l Don’t put the solution in the RFP — describe the problems and needs to be resolved

l Don’t make assumptions about support post-implementation. Different models will have different expectations (e.g., Hosted/on-premise, software/SaaS)

l Don’t limit the vendor options before sending the RFP out

l Don’t underestimate the importance of a proper evaluation of RFP responses

l Don’t set unreasonable timelines

l Don’t be afraid to give information about existing systems, your budget guidelines or other vendors being evaluated

l Don’t use internal jargon or acronyms

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Questions

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Today’s presenters

Mary St. Cyr

HR Service Delivery, Senior [email protected]

216-937-4134

Jonathan Sears

HR Technology, Senior [email protected]

215-246-7711

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mailto:[email protected]

mailto:[email protected]

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