- Advertisement -

When it comes to provider selection, size shouldn’t matter

Kimberly Carroll, IA
Kimberly Carroll
With more than 20 years of transformational experience across HR, finance, payroll, and shared services, Kimberly Carroll has extensive experience in strategic long-range planning, process optimization, and guiding clients through their transformational journey. As managing principal and co-leader of IA, Kimberly supports the needs of some of the largest, high-growth, dynamic, global organizations in the world with an emphasis on strategic vision, productivity improvement, internal realignment, governance, and prioritization.

One of the aspects of my job that I love the most is that I can help organizations navigate complex transformations. Sometimes these transformations stem from thoughtful planning and strategic alignment, and sometimes they are required because of an emergent need, such as a sunsetting technology. While the reasons organizations transform might be different, the one universal truth is that all businesses undergo transformation. It doesn’t matter how large or how small that business might be—change is going to happen.

- Advertisement -

Recent studies indicate that global investment in digital transformation is expected to almost double from $1.8 trillion in 2022 to $2.8 trillion in 2025. In fact, small and medium businesses (SMB) worldwide are expected to spend $1.45 trillion on IT this year alone. We have seen that trend play out in the “real world” as more and more SMBs reach out to us for support in their transformation work, from process optimization to provider selections. From our perspective, it’s not the size of the organization that matters, but rather the complexity of the business and transformation that drives the need to engage with a partner to support change.

So, why is it, then, that the size of an organization often dictates how providers respond to the needs of the business? Is a smaller business somehow less worthy of support than a larger one? Of course not. In fact, SMBs often need more support because they are commonly either starting from an outdated legacy system that drove unsustainable business processes or they are a relatively new organization that wants to be primed for rapid growth. In either situation, there is no “quick fix” to help them through this process. Unfortunately, many providers attempt to convince SMBs that their solution is a simple plug-and-play, requiring little work to maintain. Or they try to persuade the SMB to consider a sole source approach when selecting a new technology or service provider, limiting the organization’s ability to select the best-fit provider.

Related: 5 factors influencing how the C-suite is selecting HR technology

Providers are not the only ones assuming that a smaller organization doesn’t need to approach selections with rigor. Leaders are equally guilty of thinking that because their business isn’t one of the big players in the market they either won’t get—or don’t deserve—the appropriate attention from providers.

Provider selections are a critical part of transformations—how to do it right

Because I’ve seen this happen too often, I think it’s important for both providers and businesses to take a second look at the way SMBs approach provider selections:

Do the work.  Selecting a transformation partner isn’t something that should be taken lightly. As we’ve shared in the past, organizations shouldn’t assume the business processes you’re using today will work in the future, especially if that future includes new technology. Take the time to map the current state, identify pain points and design an ideal future state. This will help build a “wish list” of requirements and use cases that are critical for selecting the appropriate provider.

- Advertisement -

Providers, you need to do the work, too. Providers often use organization size to dictate recommended solutions (or, as I like to say, “put your clients in a box”), placing them in categories without really understanding the needs or complexities of the business. Sometimes a smaller company needs a more complex solution, despite what the sales matrix might say.  Learn who the organization is: What are their unique needs? What quirks exist within their industry that might need extra attention? Where are they coming from, and where are they going? Only then will you be in a position to help the organization make a good selection.

Run a fully facilitated RFP selection process. Smaller businesses often don’t run a full-use case-driven RFP process, and I think that’s a mistake. Google is not always the best place to you’re your next provider solution. Sometimes it’s simply a matter of capacity; many SMBs don’t have a formal procurement department, or it’s a department of one or two people, and they would rather simply allow a sole source approach to save time and effort. Other times, it’s more a matter of expertise. Selecting a new HCM or financial system can be quite a daunting task, especially when the organization has been on the same system for several years. I’ve worked with clients who have been on their legacy systems for over 10 years and have never been exposed to other solutions. Not only do they not know what the possibilities are, they don’t know the tech landscape. Therefore, it’s beneficial to run a full selection to learn the options and compare how providers can support the business’s specific use cases.

See also: We’re in an AI revolution. What’s HR’s role?

Now, providers often don’t like it when SMBs run a full selection (especially if there is a selection partner involved). They’d prefer to reach out to the decision-maker directly, and not the “go-between.”  Providers will then do a “cost-benefit” analysis and choose to not respond, which I respect if the provider believes they will not be a good fit because of their features or capabilities. What frustrates me is when a provider, who has had initial conversations with us, suddenly decides it’s not worth their time to participate in the RFP. Apparently, the business is worthwhile as long as the provider doesn’t have to work for it. Not only is this disrespectful to the SMB market, but it’s also incredibly short-sighted. The world of work is only getting more complex and more SMBs will be looking to add to their tech and services stack. Limiting the buyer pool simply because a provider doesn’t want to dedicate resources to an RFP just doesn’t make sense.

Don’t settle. Earlier, I highlighted the fact that SMBs sometimes think they simply can’t compete for attention from providers, so they gravitate towards providers who give them attention, even if the solution doesn’t meet their requirements. If you’re in the market for a new provider, you are just as important as any other company and I guarantee you can find a provider who can both meet your requirements and value you as a client. The economics of cloud-based systems, coupled with shifts in how work is done, has caused many of the traditional “enterprise” solution providers to move down market. We’ve seen increased flexibility in pricing, in bundling and in licensing from many providers—a trend that we welcome.

So, if you’re a business leader, you can still be picky. Accept that you deserve the same level of sophistication and attention from providers as any other company. And if you’re a provider, this serves as a wake-up call that the days of calling someone in talent acquisition and selling a solution are over.

Smaller businesses may not have the buying power of a global conglomerate, but they still have money to spend and problems to solve. Therefore, it’s beneficial for both SMBs and providers to take the time to ensure that the potential partnership makes sense for everyone involved.