According to the Sierra-Cedar 2015/2016 HR Systems Survey, 43% of companies are planning to undertake a major HR system strategy initiative. Technology can be one of the most valuable tools in an HR leader’s arsenal, allowing them to create more organizational value, deliver better service, and offload administrative tasks. However, for companies that don’t have HR technology in place, acquiring and adopting a Human Capital Management (HCM) suite isn’t without challenges.
How NOT to Pitch HR Technology
As a HR generalist years ago, I ran across a technology solution during a conference. I was really impressed with the software and the features, but to be honest, the thing that really struck me was the opportunity to offload a task that I spent many hours on annually. I fantasized about how I would spend those extra hours that I would get back to create new forms and revitalize our handbook.
Back at the office, I set up a product demo for the leadership team and then made my pitch, relying heavily on the fact that the system would save the HR team considerable time each year. Looking back now, my rationale was poor, my business case was laughable, and the value to the organization was unclear, so it’s no surprise that my request was turned down.
My goal here is to help you understand what does and does not work when it comes to building a business case for HCM technology. While my statements were true, they didn’t tap into the deeper needs of the business leaders or the organization. For a stronger business case that will have better results, let’s examine some avenues that pave the way for the shift from paper to technology.
Common Reasons for Implementing HR Technology
While every company is different, there is a common set of reasons for evaluating, selecting, and implementing human capital technology that typically fall into one of these categories:
- Reduced administrative burden for HR
- Reduced burden for managers and/or employees
- Increased compliance
While these are valuable benefits of implementing HR technology, a primary reason for adopting HR technology that will resonate with executives is to improve business outcomes. The issue is the champion for the technology, typically someone in HR, doesn’t always consider deeper business results and organizational performance when building a case for adding technology.
This is understandable given the plethora of reports and case studies that point to the cost savings that can result from HR/HCM technology. For example, the following appeared in a report by the SHRM Foundation, espousing the benefits of employee self-service (ESS) and manager self-service (MSS).
As with ESS, when managers handle transactions, HR budgets will see savings. For example, GreenbergFarrow, a small construction firm with two HR employees, was able to save 10 to 15 hours per week of HR staff time when MSS went live, and double that number during open enrollment.
Taking it a Step Further
The key at this juncture is to translate those additional hours into something of value for the business. In my real-life example above, this was the critical step that I missed with my proposal. It’s time to think about what your business strategy is and how you can support that, whether through learning, recruiting, or other core HR activities. While it’s important to think about the time savings you will experience, it’s even more valuable to ascertain how the business will ultimately benefit from the technology investment.
Written by: Ben Eubanks, Principal Analyst, Lighthouse Research & Advisory