Seven steps to proving the business case for new HR software

Buying HR information systems and software will inevitably involve writing a business case. A recent survey revealed that three-quarters of UK human resources managers are uncomfortable writing business cases. However, in a tough economic climate, knowing the importance of the HR planning process to create an effective business case for new payroll and HR software is a vital skill.

Understanding your audience

The first step to creating a business case for new payroll software or another new HR system is understanding your audience. Without this, your whole strategic HR software planning process will struggle to gain momentum. Are there any messages or markets your organisation is particularly interested in this year? Linking your business case to one of these might improve its chances.

“When we started to look at renewing our HR software, one of the first things we did was to speak with internal clients to discover exactly how we could offer them a better service,” says Paula S Larson, vice-president of HR with Invensys.

Overcome internal hurdles

Similarly, if your finance department sets an internal hurdle rate (a minimum return projects must deliver to be approved), then it’s as well to find out before you put together your business case.

Evaluate the existing system

Once you start writing, begin by outlining the current HR software systems being used (if any) and their limitations. So, if you are looking to introduce a new payroll administration system, show all the steps in the current process and what they cost in time and resources. What is the cost to the business of not making your proposed change?

Make the case for your proposed alternative

Next, suggest your proposed alternative. Describe the benefits, making sure you address the limitations outlined in your first chapter. Don’t use too much jargon, and focus on business benefits that the board will understand. If you can, include return on investment (ROI) statistics from independent sources, rather than just HR software system suppliers.

Don’t forget that not all benefits from HR software have a pound sign attached – soft benefits, such as improved morale and corporate reputation, should also be included in your business case.

Outline your plan

The third element of your business case is outlining the practical steps and timeline. This is where you should explain how the company will go about achieving the benefits you’ve outlined already.

For HR software, you should work with the IT department to consider what technology will need to be purchased, what it will cost to install, what processes will need to be changed, and any technical issues that need to be considered. You should also outline who is responsible for each step in the project, as well as who might need to be trained or redeployed.

Consider alternatives

Next, consider some alternative scenarios. If your business case hinges on a 15% cost reduction, what happens if costs fall by 10% or just 5%? Explain how you will cope, and what additional work may be needed.

Present effectively

After all this, you could still fall at the final hurdle – even the best business plan will fail if you cannot present your case effectively. The worst mistakes? Reading a script, relying on hundreds of detailed PowerPoint slides, or slipping into jargon – people will drift off, and you have lost it.

If you cover all these points, you should be well on your way to securing a new HR system for your company. By integrating your new HR software project with the organisation’s wider strategic HR planning process, it will help convince those around you that the new technology is necessary to improve your workplace’s HR practices.

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