Well, that’s for you to decide. And your CHRO. And your CFO. And your CIO. And…
According to Brent Adamson, principal executive advisor at CEB and co-author of The Challenger Sale and The Challenger Customer, the average number of stakeholders involved in a business-to-business (B2B) purchasing decision is 6.8. When it comes to purchasing benefits administration technology and services, we’ve found that number to be pretty accurate.
If you’ve been saddled with the task of finding a new vendor to help you administer benefits, you’ve got an important job. Not only must you find a partner that is the right fit for your organization, you must also make recommendations to the C-suite. Unfortunately, not all those decision makers will have a direct line-of-sight into the work you and your HR team do every day to help achieve your organization’s business goals.
Unless you educate them, they may not fully understand the implications of choosing one vendor over another.
If they choose the right partner, you and your team will be able to focus on what really matters — strategy, hiring, engagement, employee satisfaction, and retention. If they make the wrong choice, your world could be upended. And not just temporarily, but for the entire length of the contract, which can span two, three or even five years.
But how do you determine who the “right” partner is?
If you said, “issue an RFP,” you’re headed in the right direction. But, as so many Greek philosophers have said, “know thyself” before you explore the unknown. In this case, of course, it’s about knowing your organization and your team. That is, you must first take stock of factors like your mission, your demographics, your culture, your skills, your capacities, and so on — big picture ideas that will help you narrow the field of candidates.
Standing at the crossroads
As you consider a new direction forward for delivering benefits, it helps to think in terms of the two primary models available these days — insourcing vs. outsourcing. Insourcing relies heavily on internal resources to manage the entire ben admin process from enrollment to customer service. An outsourced model handles all the people, processes, and technology needed and is generally tailored to suit each organization’s unique needs.
If you have fewer than 500 employees and only one or two benefits offerings, read our guide, Before You Insource Your Benefits Administration. This resource will introduce you to the total cost of administering your benefits in-house through a basic benefits module tacked on to your existing human capital management (HCM) or enterprise resource planning (ERP) software.
If you have more than 500 employees, multiple benefits offerings, or complex benefits structures, check out our guide Ten Questions for Finding the Right Benefits Technology Partner. Organizations like yours are better off with an outsourced model of benefits delivery. Also called a “point-solution” or “best-in-class” benefits administration platform, this model relies on technology specifically designed around benefits administration.
More about outsourced solutions
Unlike the insourced model, HR professionals looking for an outsourced solution should focus on their unique needs for their organization, their HR team and, of course, their employees. That’s why it’s so important to first “know thyself.” You need to ask yourself the right questions to determine exactly what those needs are. Questions like these:
Can the vendor meet my core requirements?
We’ve all bought a pair of shoes that looked great in the store only to find out that they weren’t the right fit after all. It can be that way with HR technology, too. Today’s HR tech is incredibly robust, providing agility, expansive data analysis, mobile experiences, artificial intelligence, and more. So, try not to be distracted by the latest shiny object that a vendor promises. Doing so could cause you to miss the warning signs that their foundational service model is sub-standard or, more likely, just not the right fit for you.
Does the vendor’s culture align with my organization’s?
When you outsource your benefits administration, you get a roommate. Good or bad, they’re with you throughout your lease. The last thing you want is bad chemistry. Fortunately, culture isn’t easily faked — you’ll know a good fit when you see it. As you evaluate vendors, make sure to visit each prospect’s headquarters or regional office. While there, talk to everyone you can, from the customer service representative to the IT specialist to the operations staff. You’ll soon get a sense of the kind of people you’ll be working with.
What is my projected total cost of ownership throughout the contract?
This is where it helps to understand the difference between software that is “customized” vs. software that is “configurable.” The former is a feature, extension, or modification that requires custom coding and/or some form of special implementation. Configuration, on the other hand, is when you use native tools in the system to change its behavior or features. So-called “big-box” providers tend to design solutions that are highly customized — so customized, in fact, they can become enemies of themselves, causing the developers to wonder whether it would be better to start from scratch, making updates very painful for all parties. By contrast, those that are single-source SaaS (software as a service) platforms tend to be more configurable and are therefore less costly should you decide to add plans, process active vs. passive enrollment, change rates, etc.
For seven more questions you need to ask yourself, download our guide below.