Facing conflicting decision drivers and options, how do you choose talent management strategies?
In a recent survey of more than 4,700 executives worldwide, the No. 1 HR concern is managing talent. It’s no wonder that HRO decision makers are being asked some challenging questions around talent management: Which technology and delivery models are best suited for the organization? Who should be involved in these decisions? And how much of this decision should be influenced by or left to the BPO service provider?
What drives these decisions will vary significantly depending on who is engaged. Let’s raise the conversation beyond the typical “functionality vs. integration” discussion and model a holistic approach for evaluation encompassing multiple views and stakeholder interests to safeguard the ultimate goal: managing talent effectively.
One decision point for talent management concerns the choices around technology:
- Deploy the talent management suite components of the ERP vendor;
- Implement one or more best-of-breed applications for targeted functional areas; and/or
- Incorporate offerings from software-as-a-service (SaaS) vendors offered on a subscription basis.
Another decision point centers on the optimal delivery model: in-house, outsourced, or a hybrid approach. The right choice will be situational but should incorporate a thorough review of each option for its ability to deliver short- and long-term improvements in cost, process quality, and risk management (see graphic). In addition, the key elements affecting outcomes within each of those dimensions should be examined. Specifically, consider three of the largest components of cost in talent management: implementation, ongoing operations, and evolution.
Implementation/Time to Value. Functional owners will typically push for SaaS offerings in talent management due to their rapid implementation time frames, cost structure (monthly subscription vs. capital license investment), and ability to run independently. They may perceive integration as unnecessary or something to be targeted for the future. However, leveraging a common set of competencies and organizational data has become the foundation for effectively managing the talent supply chain. Here, ERP is favored for a single source of truth versus the efforts required to manage disparate user experiences, data, and processes across multiple niche solutions. Remember, though, that speed to delivery is only partially about applications and integration; change management is a significant factor when deploying talent management applications, and the availability of qualified consulting for this varies. BPO providers have begun to offer such consulting as they expand beyond transactional HRO into strategic talent management outsourcing.
Ongoing Operations and Evolution. Frequent updates (as often as monthly) are a possible benefit of SaaS over installed best-of-breed/ERP, unless they result in too much disruption and functionality that is not required or immediately consumable. Such frequent changes may also create user-retraining needs and process adaptations that can be very cumbersome. Also consider the long-term challenges to future evolution if your current technology vendor cannot support expansion into new countries or additional talent management processes. For its part, ERP may be challenged in the evolution phase by upgrades and enhancements that require substantial investment. A core advantage of BPO deployment is templated, repeatable implementations that lend themselves to ongoing evolution and innovation.
A key challenge for HRO providers offering talent management is delivering on buyers’ expectations for process expertise and outcomes while achieving economies of scale, process optimization, and labor arbitrage. In the next issue, I will examine the remaining components of quality improvement and risk management affecting the talent management decision.