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Building a solid business case for a major technology purchase is critical to running HR strategically. That means mastering the ins and outs of that process.
As an HR leader, you need to understand what the technology buying committee is looking for. The committee may include IT, leaders of different departments and possibly the CEO, depending on the size of the company. They look for a return on investment (ROI) and how the technology will fit with other applications and purchases planned, just to name a few factors.
Here's how to build and present a solid business case so those needs are addressed.
1. Gather HR system requirements data
Start by identifying and calculating HR system needs. This involves clearly documenting the issues your team is facing and how you can best address these challenges. In order to complete this list, speak to stakeholders, such as employees, managers or candidates. Some of the issues the list will cover may be subjective, such as noting the user interface is unintuitive or difficult to use. Others will be quantitative, for example, noting that it takes 30 minutes to process one candidate's application. With the quantitative feedback you can assess the annual cost and calculate your ROI.
You can also include past projects that you have not been able to complete. For example, if the business asked you to automate a change request form for newly promoted employees and your team did not have the correct software to do this task, note that instance in your business case.
2. Assess your HR systems requirements
Once you have a complete list of your needs, you should do a deep analysis of your current HR systems. You may find functionality you did not know existed that will allow you to meet some, or all, of your needs. Cloud-based software changes often, so it's important to ensure the functionality your team requires isn't included in a recent dot release. The assessment should be an honest look at what may or may not be possible with your current HR systems.
Assuming your existing software can't meet your needs, you should consider the additional, related functionality that a new system could provide. There also may be projects planned for the next few years that could benefit from a new application, improving your overall ROI. Make sure to mark these milestones down for your final business case template. Licensing new software may help you get lower-priority functionality more quickly.
3. Use business needs to build the business case
With all the information you've accumulated, you are now in a good position to build a business case for review. Use the business needs you identified to build the business case and to explain any other system options you've considered. The business case will also provide the data you collected as justification for your project.
If possible, start with the business case template that your company uses for all requests. This will ensure you provide all the information that your company's buying approval committee requires. It also makes it simpler for the reviewers, since they will be accustomed to the format and can easily locate the details they are most interested in.
4. Focus on ROI
Once you are in front of the committee, be prepared to answer questions about your projected costs, savings and ROI. Implementing a new HR system is a major commitment in terms of implementation costs, ongoing licensing costs, employee training and all other related costs and time associated with introducing a new system, so it's important to ensure you justify the business need.
The committee will expect that you have sufficiently researched and validated the information. If you can't defend your quantitative analysis, the members will most likely reject your business case and it may take a long time to get a revised business case reviewed. If you miss the budget cycle, you may have to wait for the next one, which could be the following year.
Choosing a new HR system that matches company expectations can be difficult. But if you do the research, justify your needs and present all the facts, your team may get the green light to purchase a system that benefits both the company and your HR team.