Go Live without Going Broke!
Back in the day when IT people owned their enterprise software and ran it on premise on their own companies’ computers, the cost of implementing a new package was always expected to be two to 10 times the cost of buying the perpetual software license.
A large part of that implementation cost were the extensive customizations every company made to the software to enable the often out-of-date (even wrong-headed) business processes already in place.
Another big cost element was the fact that large system-implementation firms (SIs) followed the business model typical of all major service firms everywhere: management consulting, comp and benefits consulting, legal, accounting, public relations and advertising.
Namely, sell the deal with 40- and 50-year-olds and deliver the service with 20-somethings. Now the young’ uns may be sharp as tacks and lavishly paid for their age, but when they put in 100-hour weeks, their pay may come down to $30 to $50 an hour—and customers may pay $300 an hour or more for their time. And, of course, some may be doing their first project and learning on your dime!
There’s a sound reason this model compels the use of the inexperienced: It’s the only way these service firms can make money. They can’t mark up the rates of senior executives who may already be getting $1,800 an hour! It’s one reason Deloitte has a mandatory retirement age for partners of 62, and EY, 60.
Fifty years later, very little has changed in making software work being enormously more expensive than renting it (SaaS), even with the cloud taking the applications off individual computers, discouraging customizations and making integrations a little easier.
What’s also endured—and is most astounding—is how large enterprises may spend 12 to 18 months with a committee selecting the software but only days or weeks selecting the SI partner to implement it, as though this enormously larger expense were an afterthought.
Often, that decision may be based on a very short list of SI partners from the software vendor or the imagined safety of engaging a big brand name SI (that nobody ever got fired for hiring). Sometimes it works the other way around: The SI itself suggests the software—after doing other work successfully for the client—to meet its sales quota for the necessary special privileges from the software vendor—and ends up getting the new work on a no-bid contract.
The sources of expert insight into HCM software have proliferated over the years—Gartner’s Magic Quadrants remain the gold standard—but in the last few years, the voice of the end-user has been heard more specifically on sites like G2 Crowd.
Now there is a new SI-rating service exclusively devoted to HCM called Raven Intel, which includes peer reviews from customers. Analyst firms have long examined SIs—including Gartner and Hfs—but they didn’t include many personal ratings from individual customers. That’s Raven’s unique selling proposition—being the Yelp for HCM SIs.
In addition to a burgeoning website, Raven has produced two original reports based on its review data, both easy reading and worth it for anyone nearing selecting a software vendor and then an SI: HCM Mythbusters (released in January 2019) and State of HCM Implementation (released in September 2018 at HR Tech).
Significantly in that same time, reviews have doubled from 100 last September to 200 in February 2019. Raven Intel is clearly catching on. The reviews cover price, time to finish, customer satisfaction and a host of other metrics.
Co-founder Bonnie Duncan Tinder (after years at Cornerstone, NGA, ADP and Ceridian) knew she was entering a world of hurt by starting Raven Intel. When approaching SIs to talk to their customers, some have been really open and others have slammed the door in her face.
So much of the computer industry shuns transparency, and no company wants to read a negative word about itself—ever. Chances are eventually they will on Raven Intel, because SI work is extraordinarily difficult and something nearly always goes wrong, just like in medical surgery which depends more on how well you fix it!
After a careful vetting process for the reviews, Bonnie says she and co-founder Michelle Davies have never changed a review or taken down an SI listing, even when requested. Raven does offer a paid subscription service that allows SIs to purchase advertising space (similar to Zillow or Yelp) for branding and to respond online to any reviews.
Obviously, this will be their major challenge going forward: keeping the SIs as customers and resisting pressure on negative reviews. All pioneers get arrows in their backs.
The benefits are apparent the moment you land on the homepage. You can search for all the SIs that implement,for example, Ultimate Software (about to be sold for at least $11 billion!) or at the moment any one of five other major software vendors. Or search for the SI by name and see the range of the work they do.
Each listing starts with some heavy marketing from the SI, which is exactly how the former Bersin & Associates used to start its telephone-book-sized software vendor reviews. Plus, it includes the self-reported number of certified consultants for each software vendor and projects completed. Excerpts from Gartner or Hfs follow (with links to buy their reports), along with reviews.
Given the complexity and variability of system-implementation projects, the Raven Intel questionnaire seems to do a good job making sense of it all. And while slightly irritating at first, the multiple-choice answers help newbies to understand it
My favorite question is optional at the moment and not likely to be required any time soon: “Consultant Recognized?” Every client who has been through the SI process knows—given equal proprietary tools—that project quality all depends on the quality of the team and it not changing during the process. Who wouldn’t want to know the names of the best team members?
Imagine if Raven Intel collected two or three names from each reviewer and linked to their LinkedIn profiles so a potential buyer could discover where they’re working today! And then, when actually shopping, they could contact the stars directly!
That will never happen. Who wants their best consultants poached by the competition? But while Raven Intel is a much-needed addition to end-user information sources, wouldn’t that be the most useful SI rating system of all?
For more details, listen to Diginomica’s Dennis Howlett’s recent 30-minute podcast with Raven Intel founders.