From the moment I wake up in the morning until I lay my head down on the pillow at night, I am faced with choices. These choices sometimes scratch that, almost always come with consequences. Should I hit Snooze one more time and risk being late for work? Should I wear the red stripe tie or the blue one? My wife prefers the red one… which means I’m going blue! (Ha! just kidding!)
It all relates back to the economic concept of Opportunity Cost and Trade-offs. Is the cost of what I want of greater value than that which I am willing to give up in order to obtain it? By hitting the Snooze button, I get nine extra minutes of precious, glorious, warm, luxurious, dream-filled sleep, but it would also mean that I would leave the house later and hit rush hour traffic. (Can you tell we have a teething 10-month old at home? Uninterrupted sleep is almost as precious as my next breath.)
This Opportunity Cost concept transforms slightly when brought into our HR Technology world. It becomes a maxim that undergirds all of our conversations with employer clients, co-workers and vendors. On our team, we call this “the Triangle.” There are three aspects of service: quality, price and speed. Since an employer’s HR Tech project is rarely awarded an unlimited budget, there are assuredly not enough resources to fully satisfy all three aspects at the same time. Therefore, one aspect — the one of lesser value to the customer — will be sacrificed.
We all long for the magic wand that enables all three to be achieved simultaneously – but if I had that in my back pocket, we’d have seen the KC Royals in the World Series for the last decade.
We’ve found that a lot of first time buyers want a new HR system up and running fast and for as little money as possible, thus leaving the quality of the implementation or the on-going system operation to suffer. For instance, one of the short-notice projects mentioned a few posts earlier, experienced this dilemma. Because of their shortened time frame and their budget, they had fewer solutions to choose from. Not every vendor has implementation resources able to deploy on a short timeframe – and even fewer have proven they can do it successfully.
Quality in this conversation can refer to two different aspects of the process. First, there is implementation quality. Is the system set up correctly? Were all the sales promises delivered in the final product? Is the data transferring in and out of the system error-free? The second aspect of quality refers to the level of complexity the system will support. If we need utmost support for complexity, often in means a custom-programmed solution but few employers have the budget or patience for this. The Software as a Service (SaaS) vendors offer less complexity support, but exchange this for a lower cost and shorter timeframes. Tradeoffs abound around every corner of these discussions. This is one of the reasons we focus so much of our efforts on our Discovery process: We have to ensure that everyone’s on the same page about expectations and trade-offs.
A different opportunity cost happens when an employer doesn’t have the complexity or business requirements that require the top-shelf, high quality solutions. Some projects may only require an “out of the box” solution to plug in. In that regard, a fast and lower cost service fits best which we call our Targeted Technologies. With projects that require more high touch, customized features, but at an affordable price, time is the sacrificed factor. These projects require more time, which is why we’re always encouraging employers to start as early as possible (translation: Now!) for a new, high quality benefits administration solution for their 2014 fall Open Enrollment event. The earlier we start, the more time we have and that leads to greater quality and lower solution cost.
As my paycheck always reminds me, “You can’t have it all!” Which I guess is true with HR technology as well. It is important to keep in mind your main concerns and desires when going forward with a new technology system. What are your goals based on? Time? Cost? Quality? Are you having the internal conversations with your executives and/or stakeholders as to what trade-offs might need to be made for success?
What would be most important to you in an HRIS project? How would you go about determining which points of “The Triangle” you would use? Please share your thoughts by leaving a comment by clicking the comment link above or sending me an email at mkaiser@lockton.com.