Six Lessons Learned in Running an RFP and Selecting a New HRIS

[Status as of October 2, 2016: KIPP LA selected Namely as its new Human Resources Information System (“HRIS”) in July 2016 and is targeting March 3, 2016 to go live with the new system. The implementation team is currently cleaning existing HR data for migration into Namely and developing integrations for third-party software modules that will sit alongside Namely.]

When KIPP LA Schools decided it needed a new HRIS system in June 2015, it made an extraordinary admission: they didn’t have the necessary expertise to select an HRIS and needed help. KIPP LA has one of the top management teams in the country and part of the ethos of high-performing, high-growth organizations is to “just figure it out.” But they ended up retaining the Leadership Advisory Group (“LAG”) in Southern California to help them create an RFP and guide them through the process (see Getting the Project Off the Ground and Hiring Good Help and Harder Than You’d Think: Hiring an HR Systems Consultant to Help Schools).

Here are the top 6 lessons learned in selecting a new HRIS system.

Lesson Learned #1: People and culture first. Business process design second. Technology third.

It is seductively easy to believe that a new technology system will solve all your business problems. But the opposite is true: clarity about how you want your organization to work will help determine which tech solution is right for you. Aligning the organization’s culture and values to businesses processes upfront is critical. Think people, process and technology!

KIPP LA began the RFP development process in two phases.

Between November 2015 and January 2016, Leadership Advisory Group partnered with KIPP LA’s HRIS Task Force (see Preparing for the 20 Mile March) to interview teachers, deans and school leaders to better understand the state of the organization’s HR systems from an end-user perspective. This work helped scope and develop a vision for the project which KIPP LA frequently referred back to throughout the year, even on the day they selected a vendor.

The project vision informed the first part of the RFP which frames KIPP LA’s current state and rationale for a new HRIS system. The feedback was also used to create a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) that informed business process mapping.

In the second phase, which ran between February and March 2016, LAG ran process mapping workshops with functional teams. During these workshops, they mapped out how key processes would ideally work in the future when the organization scales to 10,000 students. The select pages included from the RFP show high-level views of the process maps and specific questions KIPP LA wants vendors to address. These were instrumental in defining technical requirements.

Artifact:

20160412 KIPP LA Schools HRIS Solution RFP_Selected Pages.pdf

RFP Attachment A_Process Area Requirements.xlsx

Lesson Learned #2: Prepare the vendors and your own team for Demo Days.

KIPP LA issued the RFP to six vendors (Bamboo HR, Namely, SAP SuccessFactors, Ultimate Software, Vibe HCM and Workday) and received on-time responses from Workday, Ultipro and Namely. KIPP LA selected the three vendors who submitted responses to do demonstrations in the last week of May 2016. The demonstrations took the form of three-hour presentations where vendors describe how their products can support KIPP LA in the areas of Core Human Resources, Performance Management and Payroll.

KIPP LA had 15 people attend the vendor demos, which included the HRIS Task Force and additional representatives from HR, Finance and the Data Analytics team.

One key lesson was to provide more upfront framing and support for the KIPP LA team evaluating the vendors. While most members of the HRIS Task Force were deeply engaged in the HRIS process for months, it was easy to forget that other team members lacked context and were struggling with the 9+ hours of meetings required by the demos. There was debate whether each team member should sit through entire presentations, or only the parts that were relevant to their functional areas (e.g., recruiting). If the organization were to do it all over again, they would do more to frame the goals of the demo process, offer some guiding questions and ask participants to wear the dual-hats of functional experts and general end-users. That said, there is a clear tension between honoring people’s time in individual function areas vs. involving everyone to get a cross-functional, holistic perspective.

On the other side, the vendors often struggled in their presentations. Here are a few examples, without naming names, of underwhelming practices.

• Time management: failing to address the three key areas in the allotted time.
• Not knowing your customer: there were some token attempts to include KIPP LA’s logo in presentations, but some presentations were not tuned for KIPP LA, there was little discussion about how the organizations would partner with KIPP LA, and, in one case, the vendor failed to mention their work with similar school systems. School systems have some legitimately unique needs that complicate product selection and it is important for vendors to understand them.
• Remote attendance: in one presentation, the product person called in and it was very difficult to communicate. There were many repeated questions.

In the end, KIPP LA was left to weigh the following factors:

• The vendors’ interest, commitment and capacity to work with KIPP LA based on the Demo days and on-going conversations
• Product functionality which varied widely
• Pricing which also varied widely
• KIPP LA’s ability to find other solutions to gaps in vendors’ product offerings

Namely emerged from the Demo Day as the vendor that best met the above criteria. LAG observes that the “culture fit” between Namely’s vision for their software and KIPP’s vision for talent management became as important as other factors like product functionality. Additionally, Namely’s potential for growth matched KIPP LA’s — the organizations could grow together.

Lesson Learned #3: Understand where the holes are

The major difficulty with the Namely proposal is it did not offer a payroll module that fit KIPP LA’s needs (KIPP LA needs to be able to pay employees from multiple funding streams across multiple school sites to stay compliant with state and federal funding requirements). To Namely’s credit, they did not believe they could provide this functionality in a reasonable timeframe and were honest about the gap in their offering. KIPP LA worked with LAG to identify a workaround with another software vendor that could stand side-by-side with Namely. The payroll issue took a lot of time and research to resolve but it was important to determine if the problem would preclude KIPP LA from selecting Namely as its HRIS.

Lesson Learned #4: Help the team have a successful Live Demo Day

On June 14, 2016, KIPP LA’s IT team organized a live demo day where team members could try out the Namely software. Namely provisioned five user accounts for two days that KIPP LA could test drive. The IT team set up a bank of computers in a room and hung out for four hours so they could support anyone who wanted to try Namely. Team members could also access the demo accounts through their own computer so were able to access the live demo without having to be physically present.

Namely’s simplicity and user-friendly interface was very attractive to KIPP LA. But there was some apprehension prior to the demo day that all this work had been invested in the RFP process and what if no one liked the product? Megan Gaon notes that “the product came naturally after I familiarized myself, but you have to start using it for it to make sense.”

Matthew Peskay reflects, “We should have had some specific scenarios for team members to work through, like ‘try taking time off.’” He also would have created a formal feedback loop for team members to funnel their feedback to the HRIS Task Force.

One team member noted how important it was to have the IT team for internal support and Namely for external support as team members familiarized themselves with the product.

Lesson Learned #5: Get to know your partner

Namely, founded in 2012, is a venture-backed startup funded by Sequoia Capital, one of the world’s leading venture capital firms. Working with startups has its pros and cons. On the one hand, startups gain early success because their products meet an important need that no else in the market is providing. In this case, Namely wants HR software to be as easy to use as social media apps. In addition, startups are eager for new customers and can be very accommodating. On the other hand, they have limited resources and there is a risk that the company will either go out of business or be sold to another company.

Marcia Aaron, KIPP LA’s CEO, met with Namely’s CTO Teresa Dietrich before making a final decision. KIPP LA also made customer reference calls to organizations of similar size and scope. Additionally, KIPP LA spoke to investors in Namely to assess organizational risk.

Lesson Learned #6: Get to a decision

“The meeting we held to get to the final decision was important,” noted Matthew Peskay. The HRIS Task Force began by reviewing the One Home vision and the initial slide deck created that laid out the project’s goals. “The One Home vision served as our North Star and it was helpful to keep going back to that,” said one member of the task force.

Because of all the work that went into the RFP and the team’s broad involvement in the vendor presentations, the KIPP LA team was generally aligned when it came time to select a vendor. The biggest tension was when one functional area had to trade off better functionality in their area for the greater good. For example, if another vendor had stronger functionality in, let’s say, payroll, the payroll department would know it was giving up better functionality in their area for the greater good.

On June 27, 2016, KIPP LA announced internally that it would enter contract negotiations with Namely.

KIPP LA believes the lessons it learned selecting an HRIS vendor are broadly applicable to any major ERP software selection process.