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Why best of breed vendor solutions are a better choice for most mid-market companies.

What is a ‘best of breed vendor solution’ and ‘what is a single vendor solution’?

Traditionally software was an expensive investment that only large corporations could really make. 

Back in the day when software was shipped out in a pile of ‘floppy-disks’, everything about software was expensive, which is why leading single vendor solutions became the dominate entities in the enterprise vendor space.

Then came the internet, software as a service, and the smaller, more innovative software vendors, like ActionHRM, with a best of breed HR solution, making software more accessible via cost effective opt-in modelling, as well as a focused implementation approach, leading to less costly admin costs from day 1.

It has been interesting to observe how single vendors still believe that a ‘single big multifunctional software offering’ is still relevant to the majority of the mid-market given the high costs in direct comparison to best of breed vendors. 

In truth, mid-market companies should also factor-in substantial costs associated with breaking out of a single vendor contract at a future point in time, when components of the offering simply don’t, or can’t meet functional requirements without a significant re-implementation project requiring a greater overall budget, and of course a significant increase in overall risk (change, communications, multiple functional areas [HR/Payroll/Rostering].

All of these simple realities are proving to be a challenge for all but Tier1 global entities that can afford the significant team of administrators, developers, trainers, and managers to keep the software functional – which in many cases makes ongoing incremental update releases deployment to production almost impossible, and in some cases the base project is never delivered on the original set of business objectives given the significant risk associated with broad functional coverage / cross department single vendor implementation projects.

Other considerations when evaluating best of breed vendor solutions vs single contract?

Best of breed for the mid-market will offer greater flexibility, be more cost effective, and the solution of the mid-long term will simply innovate at a faster pace – all of which equates to a better mid-long term choice.

Put simply, with a best of breed vendor you will get more value for your money, retain flexibility of choice to easily swap and change solutions to meet your evolving functional requirements in the future, and most importantly you will achieve deeper functional efficiency and automation as a direct output of a more focused software vendor, as a specialist in their given space, affording you the real option to deploy the latest innovation quickly and cost effectively.

Sure, tier1 single vendor solutions providers will continue to purchase leading best of breed vendor solutions, however as we have all witnessed many times over the past three decades, ‘seldom will a tier 1 takeover of a leading best of breed vendor resulting in the continuation of rapid innovation’ – they are simply too large, with too many complex considerations, burdened by an internal roadmap often attempting to allocate, and re-allocate 5-10+ years into the future.

Why single contract solutions (HR, Payroll, Rostering) can be legally, practically and financially troublesome for most mid-market companies?

Locked-in legally, practically, and financially with nowhere to go without a massive upheaval and costs associated with a full re-draw of your application footprint, bundled with a fully blown digital transformation project.

There is an emerging sense being expressed amongst leading mid-market corporate companies, that taking the single vendor approach represents a significant risk for most – because when things don’t go to plan, at any point in time, it’s almost impossible to pull the pin and go back to market to try again.

Think about it… your main aim is to mitigate risk, so you go down the path of a single vendor contract, only to realise that the vendor is supporting dozens of disparate application solutions, non-of-which work in the same way, many-of-which are supported by different groups of people within the same single vendor, with integration a nightmare to enhance. This occurs more frequently than you might imagine, as single vendors takeover smaller quality best of breed vendors, taking the product in-house, as they desperately attempt to onboard, reshape, and redeploy in a more conservative package mirroring the parent tier1 offering. 

When something goes wrong (and there are many more moving parts, leading to arguably more risk – you as the client of a single vendor solution will be solely responsible to manage the single vendor contract. What happens when you can’t get in touch with the right group of people, or you realise you only have a single contact with no real escalation pathway to meaningful resolution? Again, this situation does often occur, compounded by complexities presented in the idea of a single contract vs the realities of the production deployment, training, maintenance, and support of comprehensive solutions.

Why it is important to think critically before signing into a single vendor contract for HR, payroll, and rostering.

If any functional component of the single vendor solution doesn’t work, you will be left with a significant risk to manage, in the transformation of your systems and procedures, back to a best of breed vendor operating model.

Keeping things simple in the mid-market is the key.

Key considerations include:

  1. Ease of Change: Can you easily move over to a best of breed vendor when you requirements change? or when new innovated tech is made available? or will you be bound by other corporate considerations outside of your departmental remit, forcing you to keep using a solution with poor functional coverage and poor support .i.e. if payroll and finance works really well for your organisation, however the single vendor HR solution provided is a dismal failure, will you as an HR Sponsor, or CIO be forced to hobble along for ‘the greater good’? And if so, for how long, and at what expense? 
  2. Budget: Unless you are willing to spend really big, and continue to pour money into operating your single vendor solutions, you should steer clear of single vendor solutions as a mid-market entity – they are really great with enterprise clients, however you will likely find they will struggle to provide the level of service a mid-market company requires, and costs are comparatively high for no logical reason.
  3. A healthy application footprint for a mid-market organisation will comprise best of breed vendor solutions. As the name suggests, they provide the best functional coverage, the most flexible pathways forward at any future point in time, and present exceptional value for money.

In truth nobody has a crystal ball, however best of breed vendors continue to offer flexibility, with a focus on mid-market companies, allowing you to change with lower costs, lower risk, and considerably less effort.