Benefit Solutions: Evaluate Cloud Vendors Part II
Ready or not Cloud, here we come.
The consensus is in, and Benefits Administration Systems are increasingly choosing SaaS (Software as a Service) over the traditional ERP (Employee Resource Planning). Which is good news as far as it enables us to focus less on administration, and more on core businesses. But the bad news is it means less control and essentially puts our data security and reputation in the hands of another.
Where does that leave those of us who work in Benefit Solutions? It leaves us needing to rethink how we create risk frameworks.
It's time to throw out what we think we know about software requirements and data security and ask vetted experts:
What are the new critical questions we need to consider when comparing potential providers?
Fortunately, the HR masters have answered. Recently, BusinesSolver teamed up with Employee Benefits News & Employee Benefits Advisor and assembled a panel of seasoned and insightful Benefits Administration and HR Executives and asked them to explain how to navigate this new, game-changed world. Specifically, what are the key questions everyone should be asking their vendors?
We highly recommend listening to their entire powerhouse webinar. But if you don't have time for the whole 57 minutes, then check out our highlights.
In Part I, we summarized why HR teams are ditching traditional ERP in favor of outsourcing. Below is Part II recapping the key questions to ask when reviewing Product and Provider. (Stay tuned for Part III, covering the criteria for evaluating Process and People).
The 4 Pivotal “P's” of Vendor Evaluation
Obviously, the biggest concern around SaaS and The Cloud is keeping company and employee data secure. But how do you actually do it?
How do you balance everything that IT is worried about, with all that HR is concerned with, and then translate it all into something simple (but comprehensive enough) for your C-suite?
The secret is shopping with risk management as your central criteria, focusing on 4 main categories:
Product: Have Defined Expectations
Not every data management system or HR software is built equally. Rather, there is a spectrum of solutions, each built for different needs and different levels of data sensitivity. This means your first job is to define very specifically what you're looking for. Sit down with your team and key stakeholders and ask:
#1. What exactly do we expect and need our solution to do?
Gather requirements before you shop. If you don't, scope creep will negatively impact your budget and timeline.
#2. How sensitive is our data?
Provider: Be picky
There is no "seal of approval" for Benefits Administration or HR software. In fact, there is an extremely low barrier to entry. Meaning nearly everyone and their cousin can build a platform.
Because of this wide open market, buyers need to be extra picky and make sure companies have real, and relevant, experience under their belts.
Ask providers if they have clients that "look like you," in terms of company revenue, size, and needs. Ask them to describe (in depth) their peers and competitors.
It's worth taking the extra time to be picky, because at the end of the day, if there’s a security breach, both your HR and IT departments will be held responsible...and your name (not your provider's) will be associated with it.
So as you budget and shop around, remember it's your reputation that's really on the line.
Because it's your reputation, this is one area you don't want to skimp. You should plan on paying for quality. Which goes back to why it's so critical to really understand what you're expecting from your solution and what level of security you really need.
If you handle extremely sensitive data (credit card information, medical history, etc.) you’ll need Tier 3 or Tier 4 security. And (of course), the better the security, the steeper the price tag.
Ultimately, you get what you pay for.
During the webinar, Matthew Kaiser, a HR Technology & Benefits Solutions pro (Vice President, Director of Technology Solutions at Lockton Benefit) recommended getting very specific, asking each prospect about their exact policies on availability, integrity, and data security.
He said the best advice he'd ever been given was:
“Walk delicately with discernment. The temptation will be to get seduced by technology.”
Above all, be picky.
- Like it or not, HR is "trending" away from ERP and towards SaaS.
- Which means redefining vendor requirements and security precautions.
- Have defined expectations, and know how much security you need.
- Be picky and pay for quality.
Stay tuned for Part III where we'll recap the final evaluation categories - Process and People (and why company leadership is more important than might think).