HR Tech Update: Weighing up enterprise vs niche HR solutions

HR TECHNOLOGY: HR technology solutions have mushroomed following the pandemic with options ranging from full suite all-in-one HR solutions to specialised products within a niche, commonly called “best-of-breed” in technology spheres.

Each of these types of solutions comes with its own list of pros and cons.

Businesses who strive to create a successful workflow model that accelerates growth may find HR software is beneficial as it fosters stronger interdepartmental collaboration and streamline the business into a well-oiled machine.

Enterprise or suite solutions are a collection of software or modules that run a variety of core HR functions relevant to business. The data can then be freely shared among different functions and teams, preventing data silos.

Enterprise solutions however risk being a jack of all trades and a master of none.

Consider Meta, which has been deprioritising core functions of Instagram and Facebook to focus on copycat functions (e.g. Reels versus TikTok) which led to one of its biggest stock losses ever.

Niche or best-of-breed solutions, however, offer specialised functions for specific HR needs.

When opting for niche software, a business will likely partner up with a variety of vendors to fulfil its business needs. This approach may offer higher levels of customisability, but there’s a risk of data being constrained to silos, making it difficult to port over to other solutions.

Simply put, enterprise software is hundreds of kilometres wide and shallow, while best-of-breed is narrow, but hundreds of kilometres deep.

The good news is, there are ways to minimise the disadvantages of both solutions.

For enterprise solutions, HRs could opt for one that is adaptable and agile so that they don’t miss out on the latest improvements in technology. An enterprise solution that has either merged or acquired niche vendors is a good place to look.

In terms of niche solution, besides looking at the platform’s functions and popularity, businesses are advised to take integrations into consideration.

Plenty of niche solutions have formed partnerships with complementary products, where data can be seamlessly shared between solutions, minimising the issues of data silos.

Assembling an ideal set of solutions may be a time consuming effort, but if opting for best-of-breeds, the effort is worth it.

There is also the option to take the hybrid approach. For overall operation needs, businesses can opt for enterprise solutions that can be integrated with best-of-breed solutions.

Niche solutions, meanwhile, can be selected with day-to-day operations in mind to take advantage of its depth. The hybrid approach, if done right, can lower operational costs without taking away from business value.

No matter which option businesses choose, the selection of a HR vendor is not one to be taken lightly.

Businesses are advised to do a thorough analysis of the company’s overall workflow and productivity to pinpoint HR obstacles that most negatively impact the business’ bottom line.

With this exercise, the functions that should be prioritised will become clear.

HR Tech Update, by Chief of Staff Asia's Technology Editor Ellia Pikri, appears every Thursday from 6:00am.

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