Building the HRIS business case in tough times
This article is first published in HR Leader magazine – issue 171.
Q: Given the current economic crisis all our IT purchases are heavily scrutinised, if not frozen. What tips can you give me on justifying an HRIS purchase?
A: An effective HRIS strategy will help your organisation navigate through these turbulent times by giving you the data to make informed decisions. How your organisation justifies this purchase will ultimately be a reflection of your needs, resources and priorities.
What decision makers want to see is a solution to a clear return on investment which built on a sound business case and addressing a problem. In short, you need to “sell” your argument based on objective data that delivers value. Consider this sale a roadmap from point A, where you are now, to Point B, a time where your organisation is reaping the benefits of a HRIS. A well crafted business case is a tool that not only supports decision-making regarding purchases, but will assist in planning, partner selection and implementation strategies.
Before you begin, take the time to understand your audience. What type of personalities are they? How do they make decisions? Do they have any hot spots? Provide a clear statement of the business problem. Make sure you include detailed information regarding the skills, budget criteria and performance indicators that identify and quantify the business problem. Outline what’s required to resolve or reduce the problem. Be sure to include what happens if you don’t do anything.
Define a clear set of objectives which the proposed solution is trying to accomplish. Identify the current HR processes that the proposed solution will affect. Quantify what the tangible and intangible savings will be. Be sure to look beyond the HR department for potential opportunities.List resources needed to ensure success, such as people, budget, time, and hardware.
Outline a couple of alternative scenarios that include the basic requirements for each and estimate project costs, risks, ramp-up time and training costs as well as any foreseeable project delays.
Detail the specific goals, action items, and major milestones as well as the metrics for success. Finally, write a clear, executive summary tailored to your audience and include emphasizing HR’s transformation from a transactional operating centre to a strategic, high-value and lower-cost one.
From my experience and even more so in this economy, the success or failure of the business case, and ultimately the purchase, will be determined by the depth of financial data you employ. By addressing return on investment, total cost of ownership and a cost benefit analysis you will be well on your way to success. If these concepts are out of your skill set, then don’t be afraid to go to the finance department for help. In fact, do it in any case and get finance on your side to provide accurate figures and metrics. One way or another, finance will be involved in the review and if their fingerprints are on the business case you will have a higher chance of success.
There is no doubt that the current economic crisis has focused the minds of all decision-makers, but the need for shrewd financial decisions has always been, and will always be present.