When choosing human resources software, organizations face a dilemma: invest in a packaged HR Solution, or build an in-house product? Now that legacy software has quit the race, the competition between cloud-based HR solutions and custom HR software is fiercer than ever before. However, both options have their fair share of challenges.
If you choose to buy, you are usually limited by what your software provider offers, in terms of improvements and upgrades. If you choose to build on your own, you might end up with a homemade hastily-taped-together version, or something you spend a lot of money on, that also costs you an arm and a leg to make minor fixes to.
Which one is the best choice for you? It depends on a lot of things. Or maybe there is a better third option out there.
Let’s take a deeper look at each option before you make a critical project decision.
Packaged HR tools are reshaping the future of HR. According to Sierra-Cedar’s HR systems survey, nearly 40 percent of organizations plan to move from manual process to cloud environments in 2020. So, if you’re pondering over the idea of investing in an off-the-shelf HRMS Software, you’re not alone.
At times, picking a readily available SaaS HR software seems like the most sensible option. SMBs in particular stand to gain a lot from taking this path. Packaged HR are inexpensive, ready-to-use, user-friendly, time-saving, and flexible.
Although choosing a bundled HR tool and rolling it out immediately sounds so simple, there are a lot of hurdles to overcome.
Though SaaS Human Resource Management System solutions claim to be one-size-fits-all, their generic nature rarely meets the unique business requirements of every organization. As anything off the shelf is subject to limitations, you’re forced to make compromises and find workarounds.
Off-the-shelf solutions don’t allow users behind the scene to build what they need. The inability to control or customize the product is a major shortcoming. When it comes to cloud-based offerings, organizations have little or no control over product enhancements and updates, since vendors handle this.
Canned HR solutions are often marketed as feature-rich modules that cover every HR administrative issue under the sun. However, the feature intensiveness of these products just complicates HR processes further. Often, these features turn out to be either generic or pointless or both.
Organizations are often coerced into revising their processes to fit an off-the-shelf HR tool’s limited functionality rather than having the software workaround their HR Processes.
Building an HR solution in-house (or hiring someone to build one) used to be the traditional approach to software development. Although building a custom HR software from scratch is quite expensive, the return on investment is usually worth the effort.
To develop a custom HR software, organizations may have to devote a significant amount of energy, time, and money. Sometimes these tasks might seem daunting and make packaged solutions a better alternative.
Building a custom software will:
If your competitors don’t have similar HR software, building a customized solution will mean competitive advantage. However, when a team sets out to develop custom software, a variety of complications can occur. Teams that are over-optimistic and over-ambitious can end up pushing their developers over their core competencies, making them high risk and low return.
The most publicized failure in the history of software development belongs to the FBI (Federal Bureau of Investigation). FBI ditched custom development at the cost of $600 Million after 12 long years.
The UK government scrapped the largest civil IT project in the history, the NHS health care system, after spending nearly £10 billion. The project was full of delays, technical challenges, ever-changing requirements, and very little value for users.
A report from Standish group shows that the overall success rate of in-house software development was only 16.2%. While 52.7% crossed budget, fell short of the desired features, and were delivered late, the remaining 31.1% were impaired, never delivered, and ultimately canceled.
The software development industry is littered with a long list of abandoned and unfulfilled projects. Organizations need to consider all these epic failures before venturing out to create a custom HR tool from scratch.
Here are some things that will make you reconsider the decision to build an HR software in-house:
To skip the limitations of buy and build options, businesses need to move towards an advanced alternative: building exactly what you need on a platform that makes it possible. HR workflow automation platforms offer organizations that sweet spot between purchasing a canned HR software and developing custom software.
A user-friendly HR automation tool will reduce data silos, improve efficiency, increase collaboration, and bridge process gaps.
HR automation platforms allow business users to create an HR app, customize functionalities, and deploy them without any coding. Users can create a fully functional app with ‘drag-and-drop’ tools and visual form-building wizards.
While packaged solutions put a cap on the maximum number of apps per subscription, HR automation tools give users free rein to experiment.
Most off-the-shelf solutions are built with enterprises in mind, so despite the long list of features, you might need spreadsheets and other workarounds to manage all your unique HR processes.
Any feature request in an off-the-shelf product might make organizations wait for a long period before it is finally rolled out. Custom software will demand a lot more resources to get this done. Platforms, on the other hand, offer you the power to change or customize any feature instantly.
Off-the-shelf software and custom HR solutions handle only HR processes. However, platforms don’t limit users to HR processes alone. They support cross-departmental processes/workflows and allow users can create tools that can be used by the entire organization.
Unlike the other two options, an HR automation platform offers you an all-in-one interface to support all your critical business needs. You can bid goodbye to data silos and integration nightmares!
Several organizations already depend on a cloud-based, off-the-shelf HR Software. While it seemed like the perfect all-in-one solution, these ready-made platforms demand too many ‘workarounds’ to keep things running. As a result, everything from agility, visibility, and overall efficiency goes out the window.
Investing in a custom HR Software is not just risky but also expensive and time-consuming. When you neither have the time nor the resources to hand-code every bit of functionality, but have unique requirements, it is better to customize your own HR management software on a customizable platform like Kissflow HR Cloud.
Configuring custom software using Kissflow HR Cloud allows organizations the flexibility to tailor apps specifically for unique business needs, and to improve operational efficiency. Automating HR workflows using Kissflow HR Cloud will eliminate redundancies, improve efficiency, increase coordination, reduce the turnaround time, and enhance visibility. Kissflow HR Cloud is the ideal the HR software for your small business.