When a former boss told me about a new project IT was working on, my eyes lit up. For the longest time we'd been using this old, outdated software to run essentially every HR function. Seriously, it was around 2002 and we were still running software that could run on those old monochrome black-and-green monitors. But as my boss told me, IT was working on new software that could do so much more.
For the next few weeks I sat and imagined working with this exciting new program that would ease all of my frustrations. To think, I could actually use a mouse! In 2002! There would be buttons to click, fields to fill out, and easy ways to file everything. In short, it felt as though we were finally coming into the modern age.
A month after we installed the software, I found that it wasn't nearly as satisfying as I hoped. It beat the tar out of our old software, but it didn't seem to remotely approach modern software standards. I'm no coder, though I did take some basic programming classes in college. For anyone who understands, the software looked like someone had coded a simplistic Visual Basic program, where our previous software was QBasic.
In the past few years I've come around to the idea of using third party software to run our HR operations. Many of my peers disagree with me. They like the proprietary aspect, as though the fact that the software is "ours" means it is better and more secure. Given the current software development environment, I just don't think that's true any longer.
Third-party software offers better support
Enterprise customers get all the attention. Why? Because we spend the most money on software and support. When we pay another company to provide us with software, it comes with the expectation that if something goes wrong, the other company will be there to help us fix it. In fact, most of these software vendors provide us with a support contact we can reach at any reasonable hour.
It's easy to see why people might think support for in-house software is superior. After all, if the guys in IT built it surely they can best support it, right? Well, for starters, oftentimes it's no the in-house IT guys who build the software, but rather it is a team of freelancers the company hires on contract. They work with IT, because IT needs to provide the support. But because IT doesn't necessarily code it themselves, their support isn't always the best.
(Plus, as everyone knows, IT always juggles a thousand tasks at once, and your software ticket might not make it to the front of the line. But third-party vendors, at least the good ones, always make you a priority.)
Immediately available services
Recently we've been dabbling in e-commerce, and have been hiring freelancers to do some copywriting and other technical work for us. At my old company, where we had that in-house software, we'd have had to wait for IT to create or outsource the creation of billing and payment processing software. We just didn't have it in-house at the time. That would have pushed back our experiment considerably.
But because we routinely used third-party software, we just sought out a solution that could help us immediately. We chose a full-fledged merchant services account, which let us accept credit card payments, send invoices, and even gave us the option to manage our accounts on the same platform. (And yeah, we switched to QuickBooks shortly thereafter, another decision I have enjoyed greatly.)
Why wait for IT to develop or outsource a proprietary program, one that might not work as you intend, when there are dozens of options already on the market? So many of them are slanted directly towards enterprise that you can easily find something that works for you.
Long-term cost control
This is a fight I engaged in with a peer not too long ago. He is a big advocate for building custom software. "Why overpay for software and support when you can just have your guys build exactly what you need and no more?" In that narrow context I agree, but HR vets know that context is rarely that narrow. What we need today is not necessarily what we need tomorrow.
Think about it this way. Say something needs fixing in your house. Many, if not most, people will grab the specific tool they need for the fix. But what if you get there and find something else that needs fixing? You have to go back to the toolbox to find that tool. You can basically play that on infinite loop; there is always the potential for something else. If you'd merely lugged the toolbox with you in the first place, though, you wouldn't need to keep going back to it.
In that way, third-party software is cheaper in the long-run. Yes, it will cost you a pretty penny for the initial sale, and then a little bit every month for support. But in-house software also requires support, and if you're getting inferior support from in-house techs, does the cost of third-party support really matter? And then, when you need a new tool, you have to pay more for the development of that software.
In an ideal world, I'd love in-house, proprietary software. Who wouldn't want minimal software that did exactly what you needed? But in reality that kind of solution just doesn't add up. HR is always changing. Software is always changing. People are always changing. There are software developers and vendors out there that are designed to move with those changes. Chances are your in-house staff, even if you hire freelancers, doesn't have that capability.