Packaged Solutions vs Tailor Made HRMS Solutions.

Deciding on a HR Management System (HRMS) is a no-brainer choice for all companies today. A single solution drives payroll, and benefits management, and handles all the recruiting and performance management for the entire organization. The right choice in HR tech can optimize operations and improve numerous organizational outcomes like productivity and employees’ satisfaction. With the plethora of HCM (HR in SaaS) systems, the choice generally comes down to a simpler decision. Is there a need for a packaged solution, or does the organization need to go for a tailored-made solution?

 

This blog would provide the key differences and does a cost vs implementation vs scalability vs flexibility vs maintenance vs the choice matrix to arrive at the most appropriate choice for the organization.

 

What is a packaged solution in HRMS?

 

Packaged in HRMS software is an industry recognized solution. No software is ever fully tailored. It is, generally, targeted to an industry and serves a wide swath of companies from small companies to huge companies. The software has transactional modules, which are provided at the most basic of the HR needs. The user can walk in an dealership and get a fully operational car, which is all predetermined. The solution is generally SaaS and subscription-based.

 

What is a Customized HRMS? 

 

By contrast, a customized HRMS is a bespoke system which has been built or extensively altered to fit the demands of a single organization. The system is built determining which new features need to be created, which proprietary systems need to be merged, and how the workflows need to be configured to align with the company’s processes. Continuing with the analogy of a car, a customized HRMS is akin to having a car built to your exact specifications with a completely different engine and new interior trim. It’s a unique build.\

 

Comparing Key Differences 

 

For the sake of an analogy, let’s break the comparison down into five areas of focus that all businesses leaders ought to be concerned with.\

 

1. Cost and Investment
   Out-of-the-Box HRMS: 

 

The pricing model of out-of-the-box HRMS tends to be predictable. You will be required to pay a subscription fee monthly or yearly which is determined by the number of your employees. This ensures that your budgeting will be straightforward. The annual spending is also Cost-effective given that there will be no developmental costs. However, be on the lookout for hidden costs such as additional modules, premium support, or user caps which will increase your spending significantly. In the long run, these subscription costs can be substantial.

 

Tailored HRMS:

 

Tailored HRMS systems necessitate a large capital investment initially. One pays for the time and skillset of the specialists to construct, design, and evaluate the systems. Although the total expenditure can reach considerable amounts, once the systems are created, the software becomes your permanent asset, and the continual subscription bills are negated. Depending on the systems and their complexity, the total cost of this asset might be less than the cost of a subscription service over time.

 

2. Duration of Paperwork

 

Off-the-shelf HRMS:

 

Speed is the main strength of one of the available HRMS systems. Because the software is readily available, the configuration is done quickly (which the majority of vendors can do within a few weeks), and involves the transfer of data, basic adjustment of settings, and user training. Because of the rapid configuration, companies are able to start gaining benefits almost instantly. 

 

Customized HRMS:

 

Designing a custom solution is a lengthy, detailed, and granular event across multiple phases, including mapping out systems, extracting data, and even training people to use the systems. Each of these steps can take months to over a year, depending on the complexity of the requirements. Any setback in execution of these steps can lead to the start date of the whole project being delayed.

 

3. Scalability and Growth

 

Out-of-the-Box HRMS

 

Most out-of-the-box solutions these days are designed with scalability in mind. SaaS providers generally allow adding users with ease when company growth happens. You can change your plan to access varying features or modules. Nonetheless, you are constrained to whatever scalability features the vendor provides. If your business grows to require functionality that the software doesn’t, you may need to change systems in the future.  

 

Customized HRMS  

 

With a customized HRMS, you define the system architecture. You can configure the system to accommodate projected growth in the number of employees, transactions, and volume of data. As your business grows and additional HR challenges arise, the software can be expanded to tackle specific challenges. This is a level of future-proofing that off-the-shelf products in the market often do not provide.

 

4. Features and Flexibility  

 

Out-of-the-Box HRMS:

 

An out-of-the-box system comes with various features based on industry standards. This is usually more than enough for small and medium businesses. You are offered a tested and reliable system that adequately manages basic HR functions. The primary con is inflexibility. When your company has a particular operational flow or a compliance requirement, it is your processes that are likely to be adjusted to fit the software.  

 

Customized HRMS:

 

The primary reason businesses go for custom HR software is flexibility. Every workflow, feature, and report is built to your specific needs. This means that you are able to automate specific internal processes, ensure that there is a smooth integration with other legacy or proprietary systems, and design a user experience that is in harmony with the company culture. This type of control makes sure that the technology is at the service of your business, enabling your HR team to work efficiently.

 

5. Care and Support

 

Ready HRMS

 

When using a SaaS HRMS, maintenance, updates, and security patches are handled by the vendor. Thus, your IT team will not have the added burden of software management. The vendor’s responsibilities include ensuring the system is secure and compliant with regulations, and is operational. There are different support options, and support is based on the tier of your subscription.

 

Tailor-Made HRMS

 

With the custom build of an HRMS, maintenance is your responsibility. This responsibility includes managing bugs, making security updates, and managing system compatibility with integrated software. Work associated with this is done by your internal IT team or an external partner. While this demands a greater allocation of resources, it grants total control over the schedule for updates and the development route.

 

Which HRMS Solution is right for you?

 

Whether your business needs an out-of-the-box or customized HRMS solution is entirely dependent on the needs of your business in relation to its size and budget.

 

Choose an Out-of-the-Box HRMS if:

 

• Your business is a small or medium-sized business with standard HR processes.  

 

• You need a solution that is easy to implement and has a fixed predictable cost.  

 

• Your budget permits you to avoid a large upfront investment.

 

• You would like the vendor to take care of all the maintenance and security updates.

 

Get a Customized HRMS if:

 

• You are a large organization with complicated, different, or specialized HR processes.

 

• You need particular integration with other proprietary systems.

 

• You have a long-term vision and need a system that is flexible to change with the business over time.

 

• You have the means to cover a large upfront cost, and to provide a budget for ongoing support.

 

Ultimately, the most important outcome you need is to find an HRMS that equips your team to act on behalf of your organization and enables the growth of the company. By taking the time to understand these differences, you can choose the option that most positively impacts your organization.