In the fast-paced business landscape it is extremely important for a business to utilize its resources at fullest potential. Businesses operating in Dubai, Sharjah, Abu Dhabi and anywhere else in UAE are well aware of the fact that the markets in this country tend to change very quickly, the customer demands are also increasing endlessly. That is why businesses all around the UAE give a lot of attention to performance management system. The performance management is one of the primary task of the HR department and that is the reason HR leaders and businesses are ready to invest a lot in performance management systems and programs.
There is another strong reason for investing in performance management system which is the adaptation of agile processes and methods. When businesses adopt agility, a gap is formed naturally between the managers and the employees. Most of the time the business leaders and managers failed to implement proper people management practices which results in dissatisfaction and distrust among the employees and undermine their performance and productivity.
The modern day employees are also more concerned about their personal development and growth, they want more frequent feedback from their managers which help them improve their skills and productivity. There has been several surveys and studies all around the world which suggested more than 80% of the business leaders lost faith on the traditional performance management practices and annual appraisal processes. Almost similar percentage of employees also express their distrust on traditional performance management methods. Therefore a modern, digitalized and technology based performance management system is needed.
Basically a performance management system is a software tool, which can provide a continuous performance monitoring tools and analytical data and allow both managers and employees to access valuable performance management data in a very intuitive and interactive manner. Only a modern digital performance management system solution can fulfill the needs of the modern businesses. In this blog we will discuss why a custom performance management system is more effective for your business.
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What is the Difference between a COTS and Custom Performance Management System?
Before we discuss what is the difference between a custom and COTS performance management system it is important to understand that a performance management system is a software which is used to streamline and improve the performance management processes such as one-on-one meetings, acquiring feedback, appraisal, developing personal development and training programs and other such tasks. For any HR department it is their prime goal to retain and sustain a skilled workforce and ensure other business functions can get the required talent and skillset. The performance management system is built on a powerful analytical and statistical engine, along with smart algorithms and AI software tools which makes it more efficient, impactful and effective.
When it comes to acquire a new software tool there are two options, one is hiring a professional software development agency like RSI Concepts and have a tailor-made solution which matches 100% of your business needs. The second option is to quickly implement a cloud-based solution or acquire a ready-made performance management software. Both the ready-made and cloud-based solutions are COTS software, it means Commercial Off-the-shelf Software. The COTS are not designed for a single business or a specific set of users, in fact they are general purpose tools which are designed and available to a mass audience ranging from a few hundred to millions of users.
See Also: Choosing a Performance Management System A Buyer’s Guide
What made Custom Performance Management System Superior and a Better Match to your Needs?
Whenever a business needs a software solution and they decide to go with a commercial off-the-shelf software or COTS they usually seek to match as much of their needs as possible, on an average a good COTS solution will meet your 80% of needs. That means you will have to make compromise for the rest of the 20% of your needs. That is one of the major reason business prefer to have a tailor-made custom software solution because a custom software solution is capable of meeting 100% of your needs as it will be exclusively designed for your needs.
Another great advantage of a custom performance management system is that it can provide a great competitive advantage. Furthermore the custom performance management system is exclusively designed for your business, so you also hold the ownership rights for the product. This will free your business from vendor-dependency. Businesses can manage, customize and upgrade custom performance management system in-house as well as they can choose any vendor to do so, as the entire software tool and its resources such as source code, databases and integration tools are handed over to the business who will be using it.
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Here are some key advantages of choosing a custom performance management system over a COTS solution:
Custom Performance Management System: Effectively Implement Strategy
It is important to understand that the performance management is a very flexible concept. Every business has a unique organizational culture so does the strategy to implement different performance methods. It is due to the preference which every business have different from the other. These preferences are based on the business goals, strategic objectives and their desire to improve certain aspects of the performance. For example, some businesses might prioritize the technical competencies and some might want to focus on behavioral competencies and so on.
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Along with that for a different set of employees the KPIs are different the desired outcome is different, hence the strategy and focused performance aspects would be different. Furthermore there are different performance management methods and every business would have different choice, on top of that most business leader prefer to use a combination of two or more methods to implement their own unique performance management strategy. That is the reason the commercial off-the-shelf software solutions can never fulfill all of your needs. Furthermore the COTS are built as per industry standards and offers more rigid framework.
However, a custom performance management system can offer you more control, flexibility, freedom and customization which enable you to effectively implement your own unique performance management strategy. You can utilize in-built templates and configurations wizards to setup your own customized KPIs, OKRs and performance metrics as per your needs. This allow you to laser focus on your prioritized aspects of the performance management which can greatly improve the impact and outcome.
See Also: The Risk of Poor Performance Management and How to identify it?
Custom Performance Management System: Easy Integration with Data and Third-party Systems
The entire performance management system depends on collecting, flow and analysis of the data. It is extremely important to understand that if data collection would be easier, the outcome would be more accurate. That is why most modern performance management systems have ability to automatically collect data. Businesses can manually upload data too or they can use dedicated dashboards to input the data but it is important that uploading data or integration and automated-data collection is as per the needs of the business. The IT infrastructure of any organization is a very complex eco-system, it develops gradually and evolve as per the needs and changes within the organization or due to the impact of external factors.
See Also: Performance Management Trends in the Digital Era
This means there would be a lot of different system some of which might be integrated already with the central information system. There could be a lot technology platforms and different vendors that a business is using to form their IT infrastructure. When a new software application is deployed in such environment the biggest challenge is integration and communication between different third-party systems and tools. Since the commercial off-the-shelf software are usually standardized tools, hence integration could be a big challenge, it could be very expensive and in some cases it could be impossible.
However, the customized performance management system is exclusively built for your needs, so all these problems are already accounted for. All these challenges can be dealt effectively and with convenience when you have full control over the structure of the software that you are building. That is why the customized performance management system are more effective in integrating with third-party tools and databases, which allow them to easily attain automation and built innovative features to minimize the effort and workload of the users. Even in case of manual uploads or dedicated dashboard to input data the customized performance management system is much more effective and far superior to any COTS solution in the market.
See Also: Which one is better Standalone VS Integrated Software?
Custom Performance Management System: Get Customized Features and UI
Similar to performance strategy implementation, the features of the performance management system also require customization if you want to align the system with your needs. The biggest problem with the commercial off-the-shelf performance management software is that they are built according to the industry standards and only follow standardized procedures and processes. Which is helpful but sometimes it could be a hurdle instead of support. The custom performance management system software is exclusively designed as per your requirements hence there is no such barrier or limitation. You can customize each and every feature, process, SOP, protocol and even the reporting formats and designs.
See Also: Linking Performance Management to Business Outcomes
For any performance management system the ultimate goal is to collect performance data, drive reports from the data and then take informed decisions to maximize the probability of the success. There is another most important aspect which is the user interface (UI). Most of the businesses doesn’t focus much on it, however, it is extremely important aspect of any software application. With the custom performance management system you can customize the GUI or UI as per your requirements, you can have your customized branding, and even functionalities can be customized and labeled as per your needs which can greatly enhance the efficiency and efficacy of the performance management system. The stock or off-the-shelf solutions doesn’t offer such customizations.
See Also: How to Customize Performance Management System
Custom Performance Management System: High Scalability and Easy Upgrade
Whenever businesses are acquiring any software solution, the scalability and ability to upgrade it in future are the two most important aspects to consider. The commercial off-the-shelf software comes with several restrictions and limitations. Similarly the commercial off-the-shelf performance management system could be easier and quicker to deploy but down the road it will pose more challenges. Furthermore these software are usually cloud-based and comes in different tiers and plans which are designed to target a specific size or industry. Hence if you need some features which are not available in your plan you might have to subscribe for additional plan, which will be more expensive and at the end of the day most of the features comes with expensive plan might not be useful for your business.
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The markets evolve very fast, the customer demands could change over the night, and business need to be very vigilant and responsive towards such changes, which is usually not possible with the commercial off-the-shelf solutions. Furthermore these applications take ages to develop and build new features, there are several challenges for the vendor to upgrade them. Businesses keep growing and after sometime scaling up these software would cost you a lot. The custom performance management system is completely free from all those limitations and restrictions. You can customize it whenever you want, you can scale it up or downsize it whenever you need and without paying even a single dime.
Furthermore you can also customize your custom performance management system to add new features or to make changes at a nominal cost unlike the COTS which incurs hefty fees and charges for such requirements.
See Also: 5 Challenges in implementing Performance Management System
Custom Performance Management System: Cost-effective and High ROI
When we compare the initial cost of the commercial off-the-shelf solutions and the customized software applications, the COTS apparently looks more cost-effective. However, that is not true at all. The COTS can be deployed quickly but won’t be able to fully match your 100% of the requirements, however, the custom performance management systems have higher initial cost but can fully aligned with your requirements and fulfill your 100% of the needs. In order to compare the cost we will have to look at the ROI over a longer period of the time. The stock or commercial off-the-shelf solutions have regular subscription charges which you will have to pay on monthly, quarterly or yearly bases as per your plan. You will have no control over the software vendor, the vendor will own the application and in some cases your data is also stored at vendor’s server which is not as that secure.
However, the custom performance management system is exclusively designed for your business, the vendor doesn’t have the ownership of the application, instead you will own the ownership rights of the software and you will also own all the software code, resources and the entire application which will be handed over to you. You can have full control over your custom performance management system, there is no vendor dependency, you can chose any vendor or even in-house team to maintain and upgrade your software. Your data will be hosted with you or at the server/cloud of your choice which offers better security. There will be no subscription fee or hidden charges, the customization will be very cost-efficient and if you calculate the ROI over an extended period of time the custom performance management system will cost you less than half of a reputed commercial off-the-shelf performance management system.
The custom performance management system have longer life-cycle which can be further extended by making few changes and iterations, but in case of COTS you might have to acquire a completely new software after a few years.
See Also: The Impact of Performance Management on Organizational Culture
Conclusion
Businesses operating in Dubai, Sharjah, Abu Dhabi or any other emirate of UAE knows that very well that the markets here are very competitive. The overall government policies and environment is very investor-friendly hence the competition will keep rising in future too. Furthermore the customer demands are also skyrocketing and the market is subjected to rapid changes. In such environment if a business want to maintain a steady growth it is extremely important for them to have a proactive performance management strategy.
The modern day employees need higher engagements and the business leaders also want more productive and effective tools to maximize the performance and productivity of their organization. That is why businesses deploy performance management systems which are mainly a dedicated software application designed to streamline the performance management processes and aid management in performing performance management tasks.
When it comes to acquire a performance management system software, businesses have two way, one is finding a suitable commercial off-the-shelf solution and quickly implement it and the other is slightly longer path, which is to develop a tailor-made and fully customized performance management system which is exclusively designed for the business by keeping in mind all the needs, requirements, and existing IT infrastructure.
In this blog we have discussed several aspects of performance management system and tried to highlight the aspects which make custom performance management system more superior, effective and impactful then its counterpart, the commercial off-the-shelf performance management software. If you want to learn more about the subject or if you want our help to develop an exclusive tailor-made custom performance management system for your business, please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.
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