The first hurdle you’re going to face is getting the budget for your HR System. Unfortunately, in all my years of working with HR software, I’ve found very few businesses prioritise HR; specifically, HR technology spend when it comes to budget planning!
More so than ever, given the challenges of the last couple of years, getting the budget to implement your new software can feel like a daunting prospect. However, you can make this easier by preparing a well-thought-out business case.
This will help identify the return on any investment and will often ensure buy-in from Exec level management while aiding you in securing the budget needed for your new system.
While not a definitive list by any means, you can structure your business case to include the following:
Use this section to frame the business case. Highlight what the department wants to spend the budget on and the challenges that have brought you to this conclusion.
Refer to your selection criteria. Outline the stages of selection. For instance, how did you invite vendors to demonstrate their software? How did you define the selection criteria? How did you evaluate and share the results of that evaluation for transparency?
Ultimately demonstrating that you’ve found the most appropriate solution for your business will assist you in securing the required budget. It’s also a good idea to compliment your existing evaluations with a simplified approach to allow decision-makers to review your decisions without giving too much information. For example, a simple strengths/weaknesses or pros/cons list bulleting the key information for your final few vendors could suffice.
Benefits Expected and ROI
This is an essential area. Before getting into investment appraisals, outline the benefits in detail. Provide headline information about where the real value of the system will be added. For example, if a system will allow you to automatically compile skills gap analyses leading to training plans, how much time will that save the team in reviewing paper assessments and building training plans on their own?
Some companies like to highlight cost savings here, but that can be tricky as cost savings imply that there might be a reduction in headcount. So instead, an emphasis on time saved can suggest that while the headcount will remain unchanged, the utilisation of that resource will be on more proactive and effective activities.
It’s important to highlight risks as early as possible. There are always risks to any project. Whether that might be a team member winning the lottery and leaving, an organisational restructure, or an external factor such as a global pandemic. There are always things that can go wrong, and mitigation can start before the budget is even signed off.
This might be obvious, but you’re not likely to get that budget if you don’t highlight the costs. Be sure to look at recurring costs, such as license fees and immediate ones for implementation, system migration and integration, depending on the system you are implementing. It might also be prudent to factor in license price rises beyond any initial term.
Explaining the timelines for implementation will also give an understanding of when the business can start to see some return on its investment.
This is where you’ll likely need to crunch some numbers! If you’ve taken a financial approach to identifying benefits earlier in your business case, this is where you’ll need to lay out all those savings and compare them to the cost of the system showing the point at which the return starts to exceed the investment, and the product begins paying back that investment.
It’s worth noting that the financial approach isn’t for everyone. As mentioned, it often implies a reduction in headcount to save money and excludes less tangible benefits. In addition, it’s hard to quantify how much certain functionality will benefit an organisation, so it’s often better to talk about how the new system’s functionality will enable your team to pursue new initiatives to help the company take new strides.
An important role that the business case should assume is that of a benchmark to measure the success of your project. You’ve already done the hard work of identifying what functionality you’d like, need or would like to see in future, and you’ve already justified the spend by highlighting the expected benefits. That means that post-project and perhaps a year after go live, you can review the reality against what you’d hoped for. If you find that the reality isn’t stacking up and those new initiatives you wanted to pursue aren’t coming to fruition, it gives you an opportunity to explore why and develop a plan to get back on track and achieve those goals.
This post was written by Tugela People. They are an exhibitor on the Consulting & Advisory Partner floor of the HRTech247 Partners Hall here.