Why do you need a request for proposal (RFP) for a new HRMS? Two reasons. First, you need clarity on what precisely you need a new HRMS to do for your business, and the fact that you’re going to write all that up in a document for vendors prompts you to investigate carefully. Second, when you’re faced with a shortlist of several systems to choose from, you need some way of comparing them fairly – if all vendors are working from the same brief, you stand a better chance of making fair comparisons.
Your RFP is your briefing and invitation to HRMS vendors. It’s a clear statement of your HR technology requirements and in it, you’re telling them exactly what you need from a new HRMS so that vendors can make you a pitch that directly addresses your business needs.
What you should expect to include in your HRMS
Whatever form your RFP takes, as a basic template it should include the following information:
Introduction and overview
Current business context
Response instructions and format
What level of detail should you go into?
As a basic principle: be detailed. Working through the finer points of your HR technology needs ensures you understand the wider requirements of the whole organization, and offers the vendors the best possible chance of coming up with a package that hits the target for you.
Taking the above bullet list as a template, the following is the detail needed for a comprehensive RFP:
1. Introduction and overview: timing (why are you making this purchase at this time); purpose (the strategic business goals that the HRMS must support); scope (the broad parameters of your HRMS project).
2. Current business context: ensure that prospective vendors understand your business fully. Include basic information on:
Business vision and purpose
Number of employees
Locations: offices and clients
Current or upcoming expansion projects (diversification, new markets, etc.)
Previous experience with HRMS systems (good and bad)
Key stakeholder groups for the project
3. Process requirements: put simply, what HR processes do you need the system to automate? What functionality is required? Which processes have a higher priority? Any or all of the following might be included: records management, workforce directory, time and attendance, learning management, recruitment, workload management and scheduling, onboarding, predictive analytics and reports, talent management, payroll, employee self-service, manager self-service, and social collaboration.
4. Technical issues: these relate more to the deployment of the system (cloud or on-site?), how users might access the system (HR portal, mobile, multiple sites, etc.) and details of any hardware requirements or other systems that the HRMS must integrate with.
5. Response instructions and format: be clear with vendors how you want them to reply to the RFP. Provide a template response form (having all pitches in the same format will really help your selection process). Lay out the timings and selection/implementation schedule. Ensure you request full details of the personnel the vendor would be deploying to support your HRMS project. Look for some information about the vendor’s business stability (i.e. you’re hoping the HRMS will last for X years – will the vendor company be around the whole time?) Finally, ask for references from satisfied customers in similar businesses to your own.
What are the downfalls of not being specific enough
While you don’t want to overstuff your RFP with so much detail that vendors struggle to reply (or just choose not to bother) there are risks attached to including insufficient detail:
Vendor confusion – if you’re not crystal clear about what you want, vendors are likely to offer what they have. In other words, they’ll push the features they want to push which may not be what you really need.
Ill-matching pitches – either the vendors’ pitches don’t match your requirements or they do but are presented in a way that makes them difficult to compare fairly.
You don’t get enough for a shortlist – just as with recruiting employees, if you only interview one or two, you can’t be sure of getting the best candidate for what you need.
Worst case: you buy a system that isn’t right for you – you’ve spent the budget, possibly tied the business into a long-term contract, and the system doesn’t do what you need. A poor return on your investment is almost inevitable.
A well-researched, carefully-constructed RFP is a lot of work. But it’s the foundation stone of your HRMS acquisition – any lack of clarity or insufficient detail at this stage could be fatal.
Born on March 08, 1980, Amarnath Gupta spent his first 20 years as an unknown. He exploded on the scene after returning from United States at the beginning of Routeget Technologies.
While working with numerous large Enterprises and IT giants, he served as special Guest Professor at DICER and Amity, Amarnath became a Management Leader face. Amarnath is “the laureate of Business, of its management, strategies, innovations, pains, resiliences and recuperations”.
He has delivered over 15,000 hours of Leadership Trainings on IFRS, Human Resource Management, Employee and Organization Resilience Programme, Supply Chain Management, Industrial Planning, Enterprise Automation, Microsoft Dynamics, 365 Finance & Operations, Filed Service Management, Business Intelligence & Data Analytics.
His major clients have been Microsoft, Tata Consultancy Services, Capgemini, Kiwi Retail, ZS Associates, Plotinus Analytica, Haldiram Group, Saudi Aramco, Toledo Arabia, Petrochemical Conversion Company, Muvtons Castors, Avowal Technology, Jindal Railways Infrastructure Limited, Gigabyte Technologies, KEF Infrastructure India (P) Ltd, etc.
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