10 steps to building a successful business case for HR tech investment
A 33% reduction in recruitment time. An 18% drop in time spent on admin. Just some of the benefits of investing in technology like a HR system. Sound appealing?
Investing in your people is one of the most important business decisions an organization can make. Get it right and your business will thrive.
Yet HR and People teams are in fierce competition for that all-important slice of budget. As a result, building a robust and comprehensive business case is the most powerful tool that can be used to get that all-important investment.
Packed with tangible benefits, clear facts about ROI, and information tailored to meet the needs of key internal stakeholders, it can give decision makers the confidence to say yes.
Download our latest eBook, ‘The 10-step guide to building a compelling business case for a HR system’ to find out in detail how HR and People leaders can create a successful business case for HR tech investment. In the meantime, here’s a taster overview of those ten steps…
1. Define your business needs
Each organization has its own unique needs. You’ll have a range of reasons to invest in tech, and the best way to start a business case is to set these reasons out clearly. It’s even more persuasive if a cost can be attributed to these reasons, for example, the cost of doing nothing.
2. Ensure the HR vision fits in with the business strategy
A good business case sets out what you want to achieve; the objective can take many forms, but the most effective goals are single-minded, action based and achievable.
Then, align what you’re aiming for with the organization’s over-arching aims. Make sure your business case shows how the investment will directly contribute to achieving them.
3. Identify the benefits of investing in new HR tech
Be specific about the technology benefits for your organization. Describe exactly what will be different, and better, in your operation using performance measures.
As well as setting this out in HR terms, make sure you’re also considering the impact and benefits for other functions and the business more widely.
4. Define what success will look like
Make sure you can answer the question ‘Why are we doing this?’ A cost versus benefits analysis is an effective tool to gain buy-in. If your main aim is to streamline your processes, make sure the new system will integrate with existing technology.
5. Compare vendors
Research all vendors and their solutions thoroughly and make a rational, well-balanced decision. Consider how the investment can meet the objectives you’ve set out, which may include things such as: initial cost, long-term cost, peer reviews, ease of implementation, and compatibility with your organization.
6. Identify and evaluate risks
Quantifying the cost of doing nothing can be very persuasive. Set out what other businesses are doing and where not doing anything might leave you in terms of competitiveness with other companies. You also might want to consider things such as the potential cost of breaching data legislation.
7. Outline requirements and make a recommendation
After you’ve done your research and evaluated all options, make a clear recommendation that will benefit the business most.
In the end, most business decisions come down to cost, so set out the potential savings of streamlining your processes, automating admin and giving employees across the business more time to focus on growth, as a result of your investment.
A rigorous business case will quantify these kinds of improvements using business-critical KPIs. Yours might include reducing attrition, improving employee performance, or reducing time to hire.
8. Get management and key stakeholder buy-in
Your business case can be flawless but without key stakeholder buy-in, you’re unlikely to get very far. Consider the needs of IT, Finance, Legal, your CEO or MD, and your employees.
By getting them involved in the process, it can help you understand what the organization needs most and how you can align the benefits of your business case to those needs.
9. Demonstrate the ROI of new technology
When competing with other departments for budget, it’s essential to demonstrate that the investment proposal has a clear, demonstrable ROI.
For example, Forrester Consulting’s Total Economic Impact report of Sage People found significant financial benefits throughout the employee journey. They created a composite organization, called Acme, to illustrate these benefits, including nearly $2m in savings, a 33% reduction in recruitment time, and an 18% drop in time spent on admin.
10. Create a comprehensive plan
Cover deliverables, resources needed, the schedule for implementation, roll-out and training and the expected ROI. Ensure the plan doesn’t get diluted with other distracting initiatives.
The numbers are on your side
Over 50% of mid-sized companies are increasing their spending on HR tech. The top benefits they expect include improved employee performance (56%) and freeing resources and staff to perform more strategic work (54%).
Ultimately, you don’t need smoke and mirrors to convince others. Make sure the numbers are an integral part of your business case and use these 10 steps to develop a rigorous business case that it will be hard to say no to.
Want to find out more? Download our new eBook to get all the details you need to make your own case with confidence.