It's the age-old paradox, and as with most things in life, the answer is not that simple.
This article accompanies Inventing the Future of HR.
With the game-changing technology paradigm we're experiencing in the move to highly configurable, Web-native applications, we are seeing the (re-)emergence of a plethora of new vendors on the market.
Hence, it's time to revisit that age-old question: Do you "build" your own system in-house or do you "buy" vendor-developed software from outside?
The number of choices in vendor-built software now on the market can quickly overwhelm anyone inexperienced in the world and evolution of human capital management systems. Unfortunately, as with most things in life, the answer is not that simple.
As the Software-as-a-Service market continues to evolve toward Platform-as-a-Service solutions (See John Macy, "Platform-as-a-Service: The HCM Potential," HRinsights, February 2010), a third option is becoming clearly viable -- the ability to both "buy" and "build" software that meets the organization's specific business needs, is easily maintainable and is capable of handling constantly changing business requirements.
The challenge with in-house-built software has always been development and maintenance: the time needed to build the application, to continually bring new enhancements and to maintain the code with patches/fixes and legislative/regulatory requirements that are a perennial part of the HCM world.
The beauty of vendor-bought software is the more robust functionality and the ongoing support for compliance-related requirements and the promise of new enhancements. The downside to vendor-built software has been the inability to configure and build critical, adjunct functionality to meet specific business needs that are not provided by the vendor.
"ExcelSoft" has been the platform of choice for HR professionals needing additional functionality from their HRMS -- and we all know too well down which rat-hole that can lead us!
Platform-as-a-Service applications, such as Salesforce.com, Google AppEngine and Microsoft Azure, now offer a solution to this age-old paradox.
If core HCM vendors follow this new development paradigm the way they followed the movement to SaaS and Cloud computing, we will see HCMS vendors providing the platform and the tools to allow HR professionals to configure and build onto their vendor-purchased applications functionality critical to their business under the same application umbrella -- that is, with a consistent user interface, a common workflow engine, the same security rules, etc.
And the platform is provided in a vendor-maintained environment where patches/fixes and compliance-related issues are handled and new product enhancements are delivered -- all without impacting the client's unique built-on functionality.
Building an HCMS from scratch is clearly a relic of the past. Buying and building an HCMS that uniquely meets the organization's business needs is the wave of the future.
Karen Beaman is the founder and CEO of Jeitosa Group International, a global HCM consultancy. She has more than 25 years of diversified HCM experience, including strategic planning, application development, data modeling, business process design, shared services deployment, business case development, and global systems implementation. She is the co-founder and editor-in-chief of the IHRIM Journal, the editor of four books, and in 2002, received the IHRIM's Summit Award. She can be reached at firstname.lastname@example.org.