If your HR technology software is in the cloud, you’re probably paying more in subscription fees than the value you’re getting in return. 

If your HR technology software is in the cloud, you’re probably paying more in subscription fees than the value you’re getting in return. But before you go screaming to your service provider, know that it’s most likely your fault. The value is there; the problem is that you are not using it.

I equate this situation with an embarrassing truth about myself: I use a fraction of the functionality of my smartphone. I’m guessing there’s a lot of internal nodding of heads right now. Really, who understands all the things their phone can do…and takes advantage of them? The reason I’m embarrassed, however, is because part of my job is to tell people like me that they are failing to make the most of their technology.

You may already have what you’re looking for

True confessions aside, my team and I help clients optimize their HR and benefits administration technology. Clients initially come to us wanting to change providers because they are looking for XYZ functionality. It turns out, their current provider not only offers XYZ functionality, but updates it every three months. It’s understandable that the client is unaware when you consider the following scenario.

You moved your software to the cloud to save time on the formal upgrade process. You let your HR technology specialist go because 70 percent of her job was managing this process. Now comes the quarterly upgrade. Maybe you got an email about it, but you probably deleted it because you thought it was junk. When you logged on today, the menu bar that used to be on top is now on the side. And there are some new buttons, but you’re not sure what they do. You spend the next two days figuring out where the “old” functionality now resides and it’s back to business as usual. This scenario repeats itself every few months and through it all, you continue to pay the provider’s bill.

The best and worst about software in the cloud

The best thing about cloud-based software is the ease in which it is upgraded. The worst thing about cloud-based software is the ease of which it is upgraded. Great new features go unnoticed because you have no formal process to optimize your software. Innovation is part of the cost associated with your subscription (much like your smartphone), but if you fail to take advantage of the upgrades you’re already paying for, you might as well have stayed with an on-premise system.

Challenges and benefits of optimization

Optimizing your software, however, is not as simple as it should be. Optimization support should be part of the service package from your provider. Unfortunately, in today’s competitive marketspace, service is often negotiated out of the price, leaving the responsibility for optimization with employers — who likely lack a formal process (and the internal resources) to manage optimization. The result is often a missed opportunity for increased efficiencies and productivity.

Aside from the obvious bottom line benefit associated with greater productivity, HR directors may find it much easier to sell the CEO on the next technology investment if there’s a clear return on the existing one. Also, your competitors may be using the same (or similar) platform. When they leverage the upgrades and you don’t, you’re giving them a competitive edge. Finally, the industry simply gets better with optimization. If few take advantage of software innovations, then the technology just sits there and ages. Broad usage and feedback, however, will produce better software. So, think of optimization as a way to improve your future HR and benefits technology tools.

Recommendations to stakeholders

Following are recommendations related to optimization for key stakeholders with the goal of helping employers make the most of their investment in HR and benefits technology.

  • Employers: Understand what you’re buying. If optimization support isn’t included in your service contract, ask if it’s available. In many cases the cost will be more than offset by increased efficiency, especially if you’ve eliminated an in-house support position. Re-filling the position is not likely a good solution (you probably don’t need a full-time person for optimization). Instead, dedicate a limited amount of resources to ensure someone is paying attention to what the provider sends out and can identify opportunities to leverage new tools. Maintain regular communication with your provider and have a formal plan for governing that relationship (see previous article on Governing the Service Provider Relationship).
  • Service Providers: Offer true optimization service; more than just an email advising an upgrade is coming. Reach out proactively to clients to discuss how a new feature can impact their bottom line. Not only will this effort be paid back in reduced service calls, but you will also generate loyalty that supports client retention.
  • Benefits Advisors: Stop negotiating the service out of the price on behalf of your clients. Instead, educate them on the value of optimization and support. Don’t be afraid to ask for support from a consultant — someone who can help rethink processes and procedures. Finally, when a client suggests a change in provider to gain functionality, check with the current provider to see if it’s already available.

If you’re ready to create a strategy that will help you get the most out of your HR technology investment, submit a contact form and my team will help you find better organizational wellbeing through optimized HR technology.

About the Author

Rhonda Marcucci, together with Ed Barry, co-leads Gallagher’s HR and benefits technology consulting practice. Their team provides unbiased, well-researched HR technology and benefits administration consulting including sourcing advice and service provider capability audits. Rhonda’s extensive and broad-based experience in finance, accounting, administration, strategic planning, information systems, sales and marketing, and operations is instrumental in helping clients identify a comprehensive strategy and execute against it.

Consulting and insurance brokerage services to be provided by Gallagher Benefit Services, Inc. and/or its affiliate Gallagher Benefit Services (Canada) Group Inc. Gallagher Benefit Services, Inc. is a licensed insurance agency that does business in California as “Gallagher Benefit Services of California Insurance Services” and in Massachusetts as “Gallagher Benefit Insurance Services.” Neither Arthur J. Gallagher & Co., nor its affiliates provide accounting, legal or tax advice.