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The Practicality of Purchasing an ATS

How do you know you need a new ATS?

(Part one of a three-part series)

When looking for an applicant tracking system (ATS) your first job is to critically evaluate your motivations as to why you need one, and if you currently have one, why you need to change vendors. Analyzing where and why the current ATS is not performing and why a new ATS is needed should be bona fide business reasons, not driven by subjectivity. Looking objectively and pragmatically at your business and motivation to switch providers or when making an initial purchase are the biggest factors to consider when shopping for a new ATS.

Mind the Gap

Start by conducting a gap analysis of your recruitment business and looking objectively at what you are lacking. Consider your company’s present requirements as well as anticipated future needs. For example, if your business is growing, your software needs to be scalable to suit your anticipated plans, if not, you may face having to re-evaluate ATS systems down the road. Further, prioritizing your needs is critically important to evaluate competing systems, since no off-the-shelf software will likely satisfy all of your requirements.

Before you begin the product evaluation process, look objectively at your talent acquisition processes, your current ATS’s performance for reliability and support along with your future goals. Without this in-depth knowledge, it will be difficult for you to adequately compare ATS products to determine which is best suited for your business goals and talent acquisition practices. I recommend having end-users’ input when determining where your current software is falling short. These individuals can provide the feedback you need to know as part of the due diligence in your analysis.

Also, part of the due diligence in understanding what you need for your business will help you avoid over-purchasing or under-purchasing what is actually needed to sustain your talent acquisition workflow and pressing business needs.

Where it Goes Sideways

Over the past 30 years, I have heard many subjective reasons as to why a company wants to leave their current applicant tracking software provider or make an initial ATS purchase… this case rarely ends well. Reasons that aren’t supported by a solid business case generally means the decision makers bypassed a needs analysis, and what ultimately results are one or more of the following mistakes: Buyers creating a broad list of overly general questions, using a templated RFP, not applicable to the buyer’s organization and sent to a long list of (mostly) unqualified vendors, preemptively choosing a vendor used in the past at a previous employer, or selecting a vendor exclusively on cost versus knowing the true value to the buyer’s organization.

I’ve also experienced interactions with organizations that have assigned the task of evaluating potential ATS providers to a third-party consultant or departments outside of the area where the end-users sit. This can spell disaster for the end-users and job candidates because the decision usually doesn’t serve the end-users and support the business needs of the company. We recommend designating one or more “power users” or internal subject matter experts who can help with the product evaluation process, and later serve as key points of contact to support user adoption and maximize the ongoing cost-effectiveness of the system.

Further, fostering good communications with your current provider and understanding the full complement of what your system has to offer is important for understanding what you really have at your fingertips, and I’ll address more about this is part three.

Keeping in line with good communications, the first place you should take your completed gap analysis is to your existing vendor and discuss the results. Often times your current software provider has the functions you need, but you simply aren’t aware. You should be satisfied that you have reason to explore other options and not just assume the grass is always greener based on the latest marketing hype of a potentially new vendor.

In part two of this series, I’ll discuss how cost versus the true value and why a vendor’s company culture matters in helping you make the right decision for your ATS purchase. In part three of the series, I’ll discuss the implementation and care and feeding of your ATS.

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Caveat Emptor

When it comes to the world of business, there is much that goes on behind the scenes that would scare consumers. As someone who has seen firsthand what goes on in a restaurant’s kitchen, I can tell you, it’s not a place people would find particularly appetizing. This is an example of how sometimes keeping the buying public in the dark is in the best interest of everyone. By contrast, this doesn’t work for all buying decisions, and it’s not uncommon for people to be victims of backroom deals that often turn into situations where consumers are convinced to buy products that benefit the vendor more than the consumer. For example, when you bring your car in for a simple fix, but are, instead, sold a new transmission.

When it comes to HR Technology, especially considering current market conditions, every potential customer should vet service providers thoroughly.  Asking, “Can I trust you to do what is in the best interest of my company?” is a start, but you need to dig deeper. It’s important to understand what business model the prospective service provider follows and whether this model serves customers and users or investors and shareholders.

The best companies integrate with other brands to form partnerships which provide a fuller array of products and services to their customers that make the purchased product more comprehensive and of greater benefit. In an ideal world, product manufacturers should select product integrations or alliances based on functionality, price and service… the things that benefit their consumer directly. It’s important to note, there’s a distinguishable difference between companies that offer integrations with third-party products without a financial relationship versus those companies that benefit financially from their recommendations.  Unfortunately, there’ll be always be vendors that succumb to the pressure of predatory venture capitalists and/or shareholders to maximize short-term cashflow as their number one priority. This can result in the organization only referring vendors that pay them the highest referral fees versus vendors that serve the best needs of the customer with functional products that are backed with good service and fair pricing. Given this, it’s always fair to ask these two questions, “Do you have outside financiers or shareholders?” and “Do you benefit financially by referring third-party products to me?” The best vendors will always consider the customer their primary business partner and work exclusively on their behalf. For consumers, understanding what is and is not good, honest customer service can be a tough thing to decipher at times, but you should have peace of mind in knowing you can trust your supplier to serve your best interests.

And You Need This, Too

As an example, imagine purchasing a large ticket item such as a company-wide HR technology upgrade. After purchase, you’re presented with an array of complementary third-party solutions that are integrated with your supplier’s product.  Once presented, the benefit is obvious, such as job postings or background checking… but do you know why your vendor is recommending this product? If you find that your vendor is pushing a lot of third-party products, and you later discover they’re getting paid to refer these third-party vendors, this should raise an eyebrow and a doubt about whether this vendor’s business model can deliver good customer service.

When It Goes Sideways

As an example, Facebook started as an innovative social media product designed to bring people together into communities of friends, relatives and like-minded enthusiasts. Unfortunately, due to pressure from predatory shareholders demanding more immediate cashflow, Facebook changed their business model from providing a valuable social product into a marketing platform where they make money by selling your information, browsing proclivities and preferences off to the highest bidder, and diverged from the original business model which indelibly changed the customer experience for the worse.

Summary

Keep in mind, there are legitimate and valuable reasons why someone should purchase products from a supplier’s list of vendor integrations. Understanding the motivation and underlying relationship between the supplier/company and its vendors is important, as this may give you valuable clues you can expect to experience over the years.

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The Real Partner Is Your Customer

Venture Capitalism. Vulture Capitalism. When I hear those words, I immediately envision business owners whose top priorities are their investors exit plans, and subsequently are serving their investors rather than their customers. I’ve been a business owner long enough to see the effects of vulture capitalism within my industry. The landscape is littered with our competitors’ corpses and lingering bad business practices. And what’s left to show for it? Customers picking up the broken pieces of a defunct service agreement. It’s sad and very recognizable to see customer service go by the wayside… and even more disheartening to see how the customer becomes the ultimate victim of it all.

What’s the Real Cost of Doing Business?

I won’t deny that making money is a good thing… actually it’s a great thing. However, with the acquisition of new customers comes a reality beyond the money. The company and consumer should fully understand the benefits of partnering and look forward to a long relationship. You both have, in a sense, invested your time, money and energy into each other so making the most of your partnership should be the goal. There’s a responsibility to onboard customers truthfully, realistically and with respect. Desired client acquisitions should be viewed as relationships that are forged for the long haul, not a one and done that satisfies the immediate need to look profitable for your investors’ exit plans.

All this said, there are times when investment money can be a savior to your business. Necessary and ongoing software development, sales and marketing, and operations can be what is desperately needed to help your business not only survive, but also endure. In these situations, investigate your options thoroughly and don’t leap before you know the extent of your potential partners’ involvement and understanding of your industry, competition, business and long-term goals. The more aligned you are with the investors, the more likely you’ll find a harmonious and successful working relationship.

Don’t Judge a Book by Its Cover

Research tools are available for consumers to investigate a product or service prior to purchasing, but many people fail to use these to their advantage. It’s important to dig deep to uncover any hype or misrepresentation. As human nature goes, people will be dazzled by the shiny object. The perception being that what appears to be a duck and presumably quacks like a duck must be a duck, even if we’re not totally sure what it is. This mentality can easily happen in the minds of consumers, because they believe what is large, expensive looking, flashy, and presumably the next best thing, must be what they should have.

Peeling back the layers and looking deeper into our perceptions often reveals the truth and accuracy of what we believe to be real, and with that a clearer picture of what is actually in front of us, is revealed. Consumers don’t want to be misled and certainly don’t want to spend their hard-earned money on a bill of goods, but when companies invest large amounts of money on marketing that causes misdirection, consumers can be made to believe in brands that will not or cannot deliver on their claims.

It’s important to vet out all brands and fully investigate their worth. Look beyond the pretty pictures. Ask tough questions. Dig for the truth and do not settle for being misdirected. It’s easy to settle, but ultimately when you do that, you have conceded control of your money and fate, along with opening yourself up to the disappointment of poor service, payment for an over-rated product and years of frustration trying to divest yourself of the albatross around your neck.

Reputation Management

In today’s world where nothing and no one can hide, apathetic interests are quickly identified and exposed. Companies that continue to practice a narcissistic philosophy, are myopic at best. To live today without worry of tomorrow is tantamount to extinction. This form of self-centered thinking holds customers in low regard with businesses believing buyers are not the reason the doors stay open and lights remain on… after all, they have millions from their investors for that purpose.

Areas that should never be overlooked or neglected are customer referrals and authenticated product reviews. Both of these speak fathoms about your business’s reputation and matter to any organization that is consumer-oriented. Further, they’re likely a critical part of the customer pipeline. When consumers review sites such as Angie’s List, Home Advisor, TrustRadius and Capterra they should be looking for feedback from other people’s experience to guide their decision making.

And most importantly, take time to think about the type of pipeline you’re developing. Attempting to bring on new clients by whatever means necessary, especially when done to satisfy investors, is a house of cards that will eventually collapse with calamitous results for the customer.  If you’re paying your customers to refer business to you or to write unsubstantiated reviews, you’re building a pipeline of business under false pretenses; this is a dishonest practice and a conflict of interest, and it will backfire with negative results. Having brand ambassadors who have a vested interest in the success of your organization because they realize the mutual benefit of using your product or service is more valuable to you, in the long run, than false reviews or paid referrals for new customers.

Take a Lesson

There are a lot of great business leaders in this country. Some of which conduct business with the highest of moral standards. They see the value in a win-win situation and recognize the long-term benefits of ensuring everyone with a seat at the table is well served.

Ben and Jerry’s is a fine example of this. The core mission of their business aims to create linked prosperity for everyone that’s connected to their business: suppliers, employees, farmers, franchisees, customers, and neighbors alike. They know that when these stakeholders win, they win too. This philosophy creates enduring and satisfying results for everyone involved. Partnerships that are structured in this manner make doing business with each other a joy, and less likely to dissolve due to unfair or deceitful business practices.

When it comes time to consider your potential partners’ business philosophies, consider their history of doing business with other companies. Do they have a reputation to churn and burn? Yes, this partnership may infuse money into your business, but keep this in mind, their exit plan is the end goal and always top of mind in a churn and burn situation.

At the End of the Day

I like to believe that “good guys” can finish first in business. Good business people are those who are not self-serving, but are people who understand who it is that they serve, and they serve them well. This understanding is important because it puts motivation into context and gets priorities straight. Everybody wins in this situation. Companies make money. Customers get what they want and hopefully, return to buy more. Companies that conduct business with their customers in mind, will in turn, be top-of-mind to their customers.

I don’t profess to tell other companies how to conduct business, however for my company inviting in capital investors has never been an option. I choose to work with people who believe in the mission, vision and values we’ve set forth as a company. Capital investors are more concerned with how their exit plan will manifest and are not focused on the endurance and critical needs of the organization as a customer satisfaction machine. This should not be where your attention is focused. Your customer is the true partner.

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