Why an SI is important for your HR tech strategy

The latest LACE Partners blog is a summary from a conversation Chris and Max had on a recent HR on the Offensive podcast. They discussed how the role of a systems integrator (SI) has evolved in recent years and why it is vital to ensure you pick the right partner when looking to undertake a large-scale HR technology implementation for your business.

How has the role of an SI changed in the last 30 years?

The concept of the SI in the 90s was very different to what it is now. Back then the focus was around custom build; designing, building, testing platforms in COBOL (common business-oriented language) or other similar computer programming languages all from the ground up. In other words, it took large volumes of effort and complex systems to become digitised. This evolved in the late 90s with the messaging around many platforms being that about three quarters of the system was already pre-built and you could then configure the remaining parts of the system with integrations so that it could work for your business.

That switch from custom build to packaged applications also changed what you as a business would need from your SI at the time. Gone were the days of having a business in to help design your database; most of it had been configured for you in the packaged application which meant the skills required from your SI changed. The deeply technical skills around data management were vital and if we fast forward 25 to 30 years the skills required from an SI are still rooted in that level of knowledge required for configuring the package solutions. The interfaces have changed, become more visually and graphically appealing and understanding of cloud configuration is more complex, but the business change skillset and functional change skills needed to deliver on a HR tech implementation has not changed. So if you look at the changing face of an SI the fundamentals are still in place and have been for some time, even though the tools are much easier to use and the experience is much better, meaning a more business-centric process rather than a technology-centric one.

Where is the evolution in SI market coming from?

We’ve touched a little on this with the previous question but certainly the skills that an SI are looking for in their people has evolved. The emphasis has now shifted more towards business-centric skills and most of the largest players in the market are seeing growth greater than many have seen in a long time. A lot of this is tied to where organisations are in their own transformation cycles and when you consider that we have just gone through a massive global event that has forced so many businesses to rethink the way they operate, it is perhaps understandable that many SIs are on talent drives for people with those business-centric skills to join their own organisations. For example, employee experience is an area that we’ve seen a lot of demand in at LACE Partners and for SIs this has been a focus for them too, so having people who can support organisations with their EX needs is an important shift we have seen.

What are some of the benefits of using an SI for your HR tech implementation?

If you are looking at one of the larger enterprise platforms then they will indeed often have their own teams who can help you to configure the platform. This is often treated as a separate contract to the actual purchase of the platform, however, as the platform vendor wants to separate out the accountability of the system itself and the implementation. That is certainly an option but what many businesses find is that by using a third-party SI they will often bring their own IP, but they will also be experienced across a heterogeneous technology landscape, with the capabilities and skills and knowledge to work across multiple platforms and systems. And when we encounter businesses who have perhaps undertaken a merger or acquisition, there will often be multiple systems across multiple platform providers in play, which means as a buyer you are simplifying your vendor landscape by not having to find multiple SI partners as well as working with the platform providers themselves.

The other option is to build capabilities internally, which has its own risks associated with it, not least the flexibility of the skillsets you have in house and how to deploy those skills if you bring the in house capabilities on a permanent basis. Quite often you also find that at different points in your project you will need greater volumes of resource to deliver your project requirements and so being able to flex that by using an SI provides another advantage. You can of course look at independent contractors on a fixed term contract basis, but by their very nature they would be a larger number of disparate workers and it becomes more challenging to hold the collective to account for a single set of outputs. With an SI you can of course set the deliverables and ensure they deliver to what is agreed in the contract.

What will the future hold for the SI industry?

The SI industry is driven by demand and what we’re seeing post pandemic is that many businesses are now looking at a shift from an 'on-prem' platform to a Cloud-based system. Some of these businesses may have been on that platform for 10 years or more (albeit with upgrades to the systems over that time). A shift to the cloud requires support in implementation and configuration of their systems so we are likely to see demand in this space for the next two to five years. Once large organisations have moved to the Cloud system they will most likely remain on it for another ten years at least, with platform updates and upgrades every three to six months, which will of course mean that the role of the SI will need to evolve again further to support these organisations as the next wave of transformation amongst businesses begins to take shape.