So you’ve decided you need to up your game on recognition, and take advantage of some of those talent and culture management dividends that we’re always telling you about. At some point along your recognition journey, chances are someone, somewhere, in your organization is going to pose this question:
Can’t we just do this ourselves?
The answer is, you can. Absolutely. But the key question is: Is it worth it? In other words: Will it achieve your goals? Is it cost-effective? Is it compliant? Will it stand the test of time?
That’s where this article comes in. Some questions we think you really need to consider before you choose to build (or buy) recognition. I’ve tried to take an agnostic approach for this list. Obviously, we love people who love our solution, but we also believe it is important you find the right solution or partner for your needs.
Perhaps you already have an ad hoc recognition solution and thought perhaps you might just expand it. Perhaps you need to find a way to support your vendor choice. Perhaps you just want to be sure you’re exploring all of your options.
Any which way, before you go into any discussion of Build vs. Buy, here are ten questions to give some serious thought.
- What are your real goals?
Of course, your obvious goal is to implement a recognition program. But what are the underlying needs driving that initiative? Are you looking to gather intelligence on your talent and your culture? Are you trying to boost engagement or happiness? Are you trying to identify your top performers and future leaders? Perhaps you want to improve your total rewards portfolio to drive recruitment or retention? Maybe you have scattered, tactical recognition efforts that you’re trying to bring into compliance and make strategic?Your company’s goals for its employees will dictate the keys to your recognition program’s requirements, and ultimately to the solution that can support it. Make sure you are clear on what precisely you are trying to achieve, so you can keep your eyes on the real prize.
- What is your company’s complexity?
How many countries does your company operate in? How many languages do your employees speak? How many currencies do they use? How mobile is your staff? If you design your own system, can you offer the same experience of recognition and breadth of reward to all of your employees? What is your plan for supporting multiple languages? Can you ensure equitable rewards that automatically conform to standard of living indexes and save the company money? Can you cost effectively get those rewards to the employees without issues at border crossings?Most companies also have employees who travel or use smartphones. Will you be able to offer secure access, and full operability to all of your employees around the country and world via web and mobile applications? If you are a small company (less than 200 employees) with a single location and a homogenous, single-language, static workforce—and you expect to remain so— you likely will not need this kind of footprint. However, if you have a global presence or a distributed, mobile workforce, your system just got infinitely more complex and you should consider leveraging a buy solution.
- What will be the total cost of ownership?
A typical software lifecycle is anywhere from three to about seven or eight years. According to an Infoworld interview with Mark Lutchen from PricewaterhouseCoopers, 70% of software costs are incurred after implementation. “A rigorous lifecycle analysis that realistically estimates ongoing maintenance by in-house developers often tips the balance in favor of buying,” the article claims.This is largely because a multi-tenant SaaS option—where updates and upgrades are included—is a cost-effective and flexible option for long term maintenance, where DIY solutions or single-tenant SaaS tend to be slower moving and more costly to keep up to date. And, as Naomi Bloom has pointed out, “SaaS always turns CAPEX into OPEX.” Multi-tenant SaaS shifts a lot of risk away from your bottom line and that makes your friends in Finance smile more.
- How will you stay current?
If this software has to last you as many as eight years, like Lutchen says,is it going to be flexible enough to adapt and grow with you? Consider that software developed only six years ago would not include support for smartphones. If you want to roll out a new company initiative, will it be able to support future plans? Also, what is your plan for staying current with best practices in HR and in usability?Multi-tenant SaaS solutions tend to upgrade regularly with new capabilities and features. Are you able to support that sort of ongoing development with a home-grown solution? Or do you run the risk of developing a platform that will be outdated and insufficient within a year or two? If future-proofing is important to you, consider buying.
- How much time do you have to develop the solution?
Time-to-market is another key consideration for companies shopping for recognition. In today’s fast-paced business environment, most project timelines are accelerated and demand faster time-to-results than a build solution can offer.Typically, home-grown solutions are slower to roll out, require more de-bugging, and are slower to show results.This is particularly true if you are able to simply configure, rather than customize, a purchased solution. By configuring, you can typically tailor the platform to your company’s brand and roll out in weeks rather than the months, quarters or years a build solution can often require.
- How big is your company?
I’m generally not a proponent of the Excel-document method of gathering people metrics, but the truth is, very small companies (< 200 employees) can often get away with more home-grown (low-tech) recognition solutions. Companies with more than 500 employees, however, rarely can. (This goes double for tech-savvy companies that depend on data.) In fact, the more departments, divisions and locations a company has, the more acute the need becomes for a comprehensive, specialized, and centralized solution.On the other end of the spectrum, it is tempting to think that really large companies can always use their more copious internal resources to create their own solution—but that is actually rarely a smart business case. A top-notch purchased solution will offer enough configurability or customizability to meet the needs of the biggest multinational—while leveraging efficiencies and competencies that even those large companies cannot muster on their own.
- How secure does the solution need to be?
Security is a factor that gets a lot of attention in buy vs. build debate – particularly in industries such as finance or healthcare that are fearful of an out-of-house solution. The reality is that all people and companies have sensitive data that needs to be stored securely and still accessed easily.The fact is, the cloud is often the safer bet for security. “A decade ago,” says Nikolai Behl on Venturebeat, “ I would have advised being wary of cloud solutions, emphasizing the importance of maintaining control. But we’ve come a long way in the last decade, and as SaaS solutions have evolved, security has increased; sometimes they’re more secure than what an internal team can create.” If you are able to find a recognition company that offers a secure desktop and mobile SSO solution, you can quickly allay this concern.
- Does your company thrive on data?
When recognition is strategic and designed according to best practices, one of the major dividends it offers is a way to quantify and visualize your culture and the behavior of your top talent. In fact, it transcends recognition and becomes a solution for talent management and culture management. As you consider whether to build or buy a recognition system, consider whether or not data like this is important to your company. DIY can often mean a “goody drawer” full of gift cards for managers to give away, which not only happens off the data radar, but also tends to make Finance steam at the ears.Consider also whether you have the resources to gather data on key metrics like participation, reach, and impact? Will you be able to design and support reporting as robust as you desire? Will you be able to tap into your HR big data, and compare and align your organization with benchmarks and best practices?
- What is your company’s purchasing power?
This goes along with the question about the size of your business, but this time it is more about rewards. Cash rewards have been proven to be less successfulin being memorable or engaging employees over the long term. Therefore, any good recognition program is going to include gift cards and/or merchandise.Do you have the buying power to get the most for your recognition dollar? Vendors who specialize in recognition are typically able to offer better reward value. Also, are you able to offer a broad rewards network all over the world that lets recipients choose something that is truly meaningful for them? Can you manage the breadth of rewards necessary for a best practices recognition program?
- Is this solution a core competency of your business?
This is a question posed by Nikhil Behl on Venturebeatand I thought it was an excellent one. Few companies have enough experience and knowledge in recognition to design a system as complete as a vendor who lives and breathes ideas like engagement, culture, and human capital management 100% of the time.Consider how important it is for your solution to stay abreast of improvements in HCM, and then how much of an investment it will be for your employees to acquire and keep that knowledge current. As Naomi Bloom tells us, dedicated vendors are able to “respond much more quickly to market requirements, to include the pace of change in mobile devices” where customers are apt to respond much more quickly to the needs of their own businesses and competencies. Moreover, companies (like ours) that specialize in this space are thinking beyond simple recognition. We can (and do) seamlessly bundle in high-value new features such as talent insights, culture management tools and leading-edge industry innovation in a way that would be hard to match in-house.
Do you have any other build vs. buy considerations you think should be added to this list? Share them with us here!