Platform or point solution? It’s a dilemma shared by both those using HR technology and those creating it.
For HR technology customers, the wrong decision can mean a terrible user experience, limited adoption, and myriad of issues related to that downstream in the business. For an HR technology vendor, the decision can make or break their future – limiting their addressable market or putting them at the mercy of platform vendors’ integration policies if they pick the wrong approach for their market.
The arguments for both are circular, always leading back to the other…
Do we go with a best of breed point solution or give up some bells and whistles to minimize the number of vendors we deal with for a platform. Is integration a big deal any more? How much value does one system across the HR/employee lifecycle add when it comes to real time data access? Does using the right point solutions become a strategy – a sort of contingency plan regarding tech vendors? Are you better off picking a platform vendor that has a track record of integration and an open and well supported API?
If there was an easy answer, it wouldn’t be the dilemma that it is. This has been an ongoing conversation for as long as I can remember, and I’ve been around this market for more than 25 years now.
If anyone tells you they have this figured out, they’re probably trying to sell you one of the options.
There just isn’t one answer.
My research shows that the answer varies largely by the size and industry the customer is in, the solution category being considered, the customer’s technology culture, sophistication of the users, and technical capabilities within the firm.
If you’re buying HR technology you need to think a little about the following before you select your technology strategy or your vendors to be considered. If you’re creating HR technology you need to think about who your customers and buyers are in the following context and decide how you’re going to fit in their world.
Size and industry:
Research shows again and again that companies with 5,000 employees and above prefer to implement platforms. The advantages of minimizing the number of products in the HR technology stack, even in contrast to using the most open of integration approaches with point solutions, offers trade-offs the buyers there are willing to make.
That said, it’s not one size fits all for firms with less than 5,000 employees. However, in general the SMB is more open to selecting best of breed. They are also less rigorous with issues like compliance or IT driven policy mandates for things like security.
Industries are a good signal for user sophistication when it comes to tech, especially for any tech going beyond HR and into the line of business. See more below…
Talent acquisition is a great example where the category can largely drive the decision. If you buy in to the argument that ATS capabilities have become “table stakes”, there is a strong argument to leverage point solutions for your talent acquisition stack, integrating into other platforms. The reality is that candidate behavior is changing in lock step with consumer behavior. How people find jobs and how recruiters find people is changing rapidly. To invest in a platform locked in to one approach has long term implications if you have ongoing needs in recruiting.
Employee engagement is another. A category that is being redefined every day – and it needs it. With employee engagement in such a state of disruption the demarcation line seems squarely drawn by size and complexity to the customer firm.
Customer’s technology culture:
Some companies can handle an environment driven by “apps” and not platforms. Some IT departments, even in the largest of companies, are more focused on user experience than control and support departments in their efforts match their innovative processes to best of breed tech. Some just can’t.
Sophistication of the users:
Hand in hand with the culture goes the technical sophistication of the users. Your high growth media tech firm probably has an employee base that can adapt and adopt technology with little direction or training. They consume apps and show vendors new ways to use them. Your 200 person manufacturing company probably doesn’t have the same user profile and might be more comfortable going to one place for most of the capabilities they need.
There is also a departmental consideration to be made if the solution is going beyond HR. Think of the differences in time and attendance in a shop-floor environment vs. the engineers that supporting the same shop floor.
Technical capabilities within the firm:
At the end of the day, if you’re implementing point solutions and need to tie them together do you have the ability to support that kind of effort internally? Are you understanding the vendors’ ability to support the work you’ll need to do with their API? Do they have an API?
I’d love to hear your thoughts on this. Do you see other factors driving this decision? Do you feel the world is moving one way for another? Hit me in the comments or here
This is one of the issues I love to dig in on. If you need help, don’t be shy.