Over the last several weeks–as I prepared for the upcoming HR Technology Conference & Exposition®, took demonstrations from our Awesome New Technologies for HR participants and attended three industry events where the focus on new technology was clear–I was reminded (again) that, no matter how much time passes and how technology evolves, some of the primary challenges facing organizations remain pretty constant. One of these challenges–the “single suite versus best of breed” systems debate–was a recurring theme that several HR-tech providers, and more importantly customers, have discussed with me in meetings and on my HR Happy Hour show recently. Since this argument is one that seems eternal in HR tech, I thought it made sense to explore it in more depth, with the hopes of helping as you research HR-technology solutions for your organization.
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A Brief Review of the Debate
A “single suite” of HR applications is a solution delivered by a single HR-technology provider that supports all of the primary functions for HR and people management in one integrated system. So, HR, payroll, benefits, recruiting, talent, learning, etc. all are supported in a common suite. Proponents of the “single-suite” approach to HR-technology applications have a simple but powerful argument to advocate for this strategy: With one system managing all HR processes, users have a single design and overall workflow to learn; data move naturally throughout all of the applications; and the organization has only one vendor relationship to manage going forward. Additionally, some organizations like to have a single suite that covers HCM technology as well as finance, manufacturing and other ERP processes.
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The “best of breed” approach to building a platform or ecosystem of HR-technology applications for the organization advises selecting the “best” or most capable individual applications for specific HR functions and process areas (like recruiting, learning, benefits, etc.) and taking advantage of their superior capability (when compared to single-suite solutions). The core of the argument for this approach is that best of breed vendors are fully dedicated to just one main process area and can create solutions that offer the newest and best features and design, providing a superior user experience and better outcomes overall than more generic single-suite solutions. A best of breed approach can then end up with one provider for an ATS, a core HR/payroll system, benefits, talent management and many more.
Why is This Debate Important?
Making the right decisions about HR technology is critically important for the organization, but even before specific tech decisions can be made, the organization often starts by developing an overall HR-systems strategy–a process that usually includes going through the single suite versus best of breed debate. In this stage, several themes emerge. The relative strengths and weaknesses of each approach are evaluated, a high-level review of the solution provider landscape is conducted to assess potential partners (number and depth of capability), and internal review of the organization’s overall enterprise-technology footprint and strategy are considered.
Sometimes, the decisions on HR technology are somewhat out of HR’s direct control, particularly when the organization’s IT or CIO organization has traditionally wielded the decision-making authority over all enterprise-technology purchases. In these instances, single-suite approaches to HR tech may be more likely, as CIO-driven organizations often like to standardize with a single provider and platform. In other instances, especially with smaller organizations that have yet to find a reason to standardize on one platform, HR leaders have more influence and authority over HR-technology decisions. In these instances, the “tech” arguments for single suite tend to be de-emphasized, and the functional and capability arguments that can favor best of breed providers carry more weight.
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All Things Being Equal Then…
The most difficult debates to settle are those where compelling reasons for each side can be clearly recognized and communicated. Such is the case for the single suite versus best of breed question. To sum it up as simply as possible, with single-suite approaches to HR systems, the organization sees a significant benefit from the native integration and data flow across all the HR applications. Things like converting applicants to new hires, launching onboarding processes, getting employees set up on payroll and benefits, and enrolling them in learning courses all become much easier when the supporting systems all are components of a larger tech suite. Consolidated reporting that touches multiple functional areas is simpler, as all the data reside in a single platform. And finally, user experience, training and overall maintenance are generally better and simpler in a single-suite environment.
In the best of breed approach, the organization and its users often get newer, more innovative, more modern solutions for their specific functional areas. It is argued, by those favoring the best of breed approach, that having the “best” solutions for each functional area is better than having all solutions reside in one suite, which often comes with tradeoffs and decreased capability. The top best of breed ATS, for example, probably provides a better user and candidate experience than a single-suite solution provides. Similar arguments can be made for learning, benefits and other best of breed solutions. Of course, this approach comes with its own tradeoffs–chief among them, the challenge of effectively integrating a set of disparate systems in order to process HR and business transactions and conduct consolidated reporting. As I said, there are compelling arguments for both approaches.
The single suite versus best of breed systems debate has been running for what seems like forever, and it will likely continue to be litigated far into the future. The complexity, costs, resource commitment and technical challenges make actually developing a comprehensive suite of HR-technology applications (not to mention, apps for finance, manufacturing, CRM, etc.) extremely daunting. Thus, at any given time, especially for larger enterprise customers, there are not many technology providers offering capabilities that are deep and broad enough to be considered true single-suite solutions. But these few are very well positioned in the upper end of the HR-tech market, as we’ve seen above. And with the constant investment and innovation from the broad collection of HR-tech start-ups, we’re guaranteed to see a steady stream of new best of breed solutions entering the market as well.
There’s probably not an “end” to this debate, at least in the near term. For HR leaders, staying informed and current on the HR-tech marketplace has never been more important, and the decisions HR leaders make about technology are ones that have lasting impact on the organization and its people. Hopefully, many of you will continue your HR-tech research and learning at the HR Technology Conference next week.