How to Make a Business Case for HR Software
As budgets tightened in 2020, companies focused their efforts on making remote work a successful experience for their teams. As we emerge from the...
How to Make a Business Case for HR Software
Everything you need to know to get buy-in from the C-suite.
As budgets tightened in 2020, companies focused their efforts on making remote work a successful experience for their teams. As we emerge from the pandemic, 2021 is HR’s chance to drive strategic impact with an improved tech stack.
Layoffs, the sudden shift to remote working, and revenue loss all had an impact on budget cuts felt by many HR departments. Regardless, the pandemic has thrust HR into a more strategic role within the organization — one that, if seized upon, will enable the HR department to bring lasting value and position their people for the future.
One lever to unlock this lasting value is implementing technology to improve outcomes for both the organization and its people — with productivity and efficiency being two major focuses. In the post-COVID era, team leaders now have a clearer idea of their talent priorities — ranging from recruitment to employee engagement. Here’s where convincing your organization’s C-suite about the ROI of a software solution comes in.
In the next few pages, we guide you through how you can organize your HR tool selection process, align your decision with major business drivers, and convince the C-suite to invest.
Step 1: Understand the strategic business goals
HR exists to partner with the business. But what should it look like in practice?
All Human Resources efforts must serve the overarching business goals.
After all, HR is not an island or an empire unto itself! To help move the organization forward, as an HR professional you’ll first need to gain a clear understanding of the overarching strategy. A compelling business case for new software requires proving that the investment will serve a core strategic need for the organization. While every company is unique, there are a common set of key strategy drivers, including:
Finding new growth sources
Managing regulatory changes
How clearly do you feel your HR department understands your organization’s strategy?
- Very clearly
- Somewhat clearly
- Neither a good nor a bad understanding
- Somewhat unclearly
- Very unclearly
Convincing the C-suite also requires speaking their language and taking the time to think at their level.
Make sure you fully grasp the business strategy before you narrow your focus on HR’s needs.
Step 2: Articulate your talent goals
Prioritize your needs and pain points before choosing new HR software.
Based on your analysis of the business strategy in step 1, it’s now time to bring the focus down to the HR and people level. What parts of the organizational strategy can HR most directly impact? Within that, where are the greatest gaps?
The HR department can add value and bring answers to a number of key strategic business areas. Articulate and refine your talent goals by mapping possible HR objectives to the main business goals you identified earlier. Below is an example of what this could look like:
|Key business driver
||Potential HR objective
1. Decrease turnover or increase employee retention
2. Reduce vendor or labor costs
|1. Evaluate and streamline onboarding process
|2. Measure and improve employee engagement
|3. Automate admin tasks
While there will likely be many areas where HR could contribute, prioritizing your goals will help you first find solutions that correspond to your organization’s most pressing needs. Just keep in mind during this process that having a separate solution for every requirement could be costly — not only in terms of financial investment but also in the loss of insights and analytics you could have gained through a centralized HR suite.
👉 Looking to attract and hire the best talent, to find new sources of growth for your organization? A Talent Acquisition solution may be what you’re looking for.
👉 Seeing high employee turnover and struggling to develop your people? You’ll need a Talent Management solution.
👉 Do you see a need to reskill and upskill your people to reduce the long-term cost of hiring? Look up Training Management and LMS tools.
The good news is that you can get all this in a complete suite. This ensures you’ll keep your data centralized throughout all HR processes, including talent acquisition, talent management, employee L&D, and all other administrative duties.
What are your primary talent goals for 2021?
- Improve hiring
- Focus on reskilling and upskilling
- Boost retention
- Use HR analytics to drive decisions
- Improve productivity
Step 3: Define what success will look like with the right solution in place
And create an elevator pitch. Let’s show you how.
Now that you’ve aligned your talent goals to the business strategy, it’s time to create an elevator pitch to answer the inevitable question that will come up: “Why are we doing this again?” This elevator pitch will serve you well for the steps to come. At this stage you don’t need all the answers. After all, you haven’t yet dived into a thorough research of options and vendors. Focus on putting together a short 30-second pitch that clearly:
Identifies one or more strategic objectives for your company
Defines challenges associated with that strategic driver, be they internal ones or external as a result of new regulations or industry trends.
Paints a picture of a future-state with a new HR solution and its potential positive outcomes for the business as a whole.
👉 Here’s an example of a compelling elevator pitch for a company in the financial services industry:
A major strategic focus for our organization this year is to reduce costs. With that in mind, our data shows that the turnover rate within our organization hit an all-time high of 15% last year.
Also, feedback surveys highlighted our employees’ lack of motivation and dissatisfaction. This likely explains the increased absenteeism and lowered productivity. We’ve also had high costs for our training program despite low attendance rates and people’s input on the lack of updated learning content.
By switching to a complete HR software suite, we can improve employee experience and reskill our talent to keep up with market demands. More companies are increasing their learning budgets to close skill gaps in the workforce.
This will improve our services by preparing our employees for the industry’s changes. A strong Talent Management offering as part of the suite will also ensure we’re spotting employee struggles before they become a hurdle so we can keep our talent motivated and happy at work.
Step 4: Approach key stakeholders early on
Think about who the key decision-makers and influencers are in your company and get their support.
Often getting the approval of the entire C-suite starts by bringing just a couple of members on your side. Floating the idea with them early and informally, and working to get at least one or two executives to sponsor the project with you will increase your chances of a successful outcome. Just make sure you consider what their goals are and how an investment might help move their department forward.
Talking to different senior executives before even researching your software choices will also give you a better idea of the areas that are lacking within the organization. They know the key business metrics better than anyone and regularly discuss issues with their teams. After all, building a business case is a collaborative process.
So how do you identify which stakeholders to approach first?
Think about who’s most likely to be concerned about the problems you’re looking to fix:
Chief Executive Officer (CEO)
What do they care about?
- Finding new sources of growth.
- Seeking innovation and finding the right technology to support it.
- Aligning people and culture to a common vision.
How to approach a discussion with them:
- Be an anticipator of future needs. Gain a deep understanding of the business strategy and use people data to anticipate future talent needs aligned to the organization’s strategy.
- Don’t get lost in the details of tactical HR issues. Build trust by showing them you understand the business drivers but avoid recounting all the day-to-day actions.
Chief Information Officer (CIO)
What do they care about?
Driving digital transformation.
- Helping the company become more data-driven.
- Managing the organization’s IT-related assets and strategically planning future investments.
How to approach a discussion with them:
- Listen and identify common priorities or pains with the IT team.
- Demonstrate your commitment to becoming more data-driven and collaborate with IT on this goal.
- Seek to understand the existing tech ecosystem at your company and how your new solution might integrate.
Chief Financial Officer (CFO)
What do they care about?
- Making sure investments have the best possible ROI.
- Protecting the company’s vital assets and ensuring compliance with financial regulations.
How to approach a discussion with them:
- Talk ROI – even if you aren’t at the stage of estimating ROI, be prepared to talk concretely about what success would look like.
- Point out potential compliance issues with current system or process.
- Show them where money is being lost.
Which major stakeholders need to be on board with an HR software investment in your organization?
- CIO/IT Manager
Step 5: Research vendors and list the benefits
Now that you've identified your talent needs, aligned them to the business' strategy, and have support from a couple of key stakeholders, it’s time to turn to the HR tech’s benefits.
Before choosing an HR software, consider these factors that will impact the way you work and manage people operations:
1. What core features you need (e.g. automation capabilities) and whether there's an HR tool that meets multiple requirements.
2. Integration capabilities with your existing tech ecosystem.
3. How fast the tool’s learning curve will be, what training opportunities your team can access, and whether you're willing to compromise on this to get a functionality-rich solution.
4. What will the support be like from the vendor post implementation? Will you have a dedicated person you can turn to with questions?
5. How well is the tool able to adapt to your changing (future) needs
6. Feedback from past users regarding the solution’s onboarding experience, usability, and privacy options.
7. How extensive the app's security and privacy capabilities are.
8. Whether the tool suits your work culture when it comes to its features, data privacy options, support availability, and even interface design.
Next, make a list of your options. Compare the status quo (i.e. the case where you did 'nothing') with at least two other solutions. Note their advantages and disadvantages compared to the key talent and business drivers you’ve identified earlier.
How many vendors do you normally include in your shortlist for business software purchases?
When listing these benefits there are four fundamental steps to consider to ensure the output is easily digestible for the C-suite executives you’ll need to convince:
A. Focus on the ROI
Attribute every key feature of the potential HR systems to their return on investment. When presenting to the C-suite, the ROI will be a decisive factor along with the costs of the solution and the potential savings it could bring.New tools generally require implementation fees and software adoption training. Plus, switching from one solution to another will require extra resources as you move your data. All of these costly resource allocation steps should be justified by the new tool’s ROI.
B. Lead with quantitative benefits
Rely on the quantitative benefits of your proposal. Look at your current metrics and see where they are behind the industry standard. For instance, automating tasks could save you time. Meanwhile, simply using one core tool for all HR duties will reduce your staffing costs. These metrics let you assess the overall health of a business and where HR’s role comes in.
C. Consider changes in regulatory requirements that demand a software upgrade to maintain compliance
Along with state-specific legislation, the CCPA, CNIL, and GDPR are just three common factors that require HR tools to support data privacy. To minimize risks, list all potential compliance issues and see how much the tool you’re considering covers. Let’s break down what to pay attention to when analyzing a tool from a privacy and compliance perspective:
- The right to view, process, and delete personal data. People management software should allow employees to update their personal information while keeping HR in control.
- Secure data storage. Keep an eye on features like Advanced Encryption Standard (AES), security audits and certificates, strict internal access controls, two-factor authentication, complete data reversibility, and more.
- Ability to legally distinguish employees from contractors. Avoid workarounds to prevent employee misclassification and subsequent tax penalties.
- Fast response to data subject requests. Employees, candidates, and partners in the system can request a backup of their data at any time. The vendor’s legal duty is to provide a fast, detailed response to queries at no cost.
- User consent. When you sign up for a tool, you’ll have to give your consent for storing your data, and obtain the consent of every employee. Do this through a contract, privacy statement, data policy, or a tool’s built-in features.
- Payroll compliance. Go beyond simply issuing employee paychecks on time. When benchmarking HR software, look for features such as invoicing, review processes, and other legal factors to back up payments.
- Options for distributed teams. Got remote employees spread all over the globe? Choose an HR system that helps you handle their payment, training, and benefits following country-specific laws, currencies, and customs.
D. Link qualitative benefits to the business drivers
Now that you’ve got the legal aspects out of the way, it’s time to go over the qualitative benefits and their effects on business drivers. While you can’t measure qualitative benefits and claim you’re going to be saving money, you can demonstrate how these will impact the bottom line.
Aspects that aren’t quantifiable can be used as proof within a business case as long as they’re tied to general business goals. For illustration, if the company is trying to position itself as a top workplace for employees, you could be more likely to get the green light for a tool that’s proven to boost employee morale.
Step 6: Present the final recommendation
Use this practical overview to structure your business case as a presentation or written document that will justify the investment.
You'll most likely need to deliver the business case in a formal setting like a presentation to the C-suite or an official document they’ll work through. In this section we help you structure that final, formal pitch to grab their attention and convince them that investment is needed today.
1. Present the executive summary
Think of this as reframing your elevator pitch. You’re presenting the core challenge, giving a brief look at your suggestion and the reasons behind your choice.
The idea is to have all important points listed on the page with your executive summary. This way, you’re setting the context strongly from the outset and presenting the key points you’ll expand upon later in your document or presentation.
2. Mention what your organization’s current
Talk about how a specific business challenge is linked to a specific people challenge. A CEO will always be primarily interested in fixing a problem that impacts business success.
3. Analyze the cause of the problem
Is there anything that’s limiting your efforts? Is there a specific tool or process driving the challenging situation?
Go over how your current HR operations work and what your leading difficulties are. Compare past results to industry standards or get your financial team on board to analyze how much money you’re losing in the absence of a better solution.
4. List your goals and objectives
Summarize what you’re trying to get out of a new tool. This can be anything from employee efficiency gains to improving your employer branding efforts or reducing operational costs. Tie these objectives to the business strategy and use language that is tailored to what each C-suite member sees as most valuable.
5. Time to make the proposal
This is where you present your software choice and how it will help you reach the objectives listed above. Note all benefits (e.g. full stack of features, ease of use, positive employee feedback during trials), but don’t be afraid to bring up its limitations. Perhaps it’s the most expensive tool you’ve tested or there’s a feature that will only be released next year.
Illustrate what success with this new HR tool will look like. Give the rough numbers on employee performance, reduced turnover rates, shortened time to hire, or anything else you’re expecting to see improvement in. Make sure to leverage the ROI calculation you completed earlier!
6. List the alternatives you’ve considered
Present these in a table format and go over their cost, top features, the time needed to adopt the new tool, and potential usability issues or risks. This comparison should highlight why you chose one HR system over the others.
7. Time for the final remarks
Bring your presentation or pitch document to a close by summing up and leaving the C-suite with your final recommendation. You could also take a moment to describe what using the tool could look like on a daily basis and who’s going to manage the process.
Simply put, executives want to know:
👉 The initial cost of investment versus the value gained;
👉 If the company’s data will be secure;
👉 How easy it is to implement the new solution and what training the team will look like;
👉 If there are other companies like theirs that have been successful with this solution;
👉 What the risks of using this tool are (if any) and whether you can prevent them.
Our vision for HCM
Discover how we see HCM and what we’re building towards
A look at our plans to transform tomorrow’s workplace and help teams handle a digitally-disrupted world.
Daily disruptions affect nearly every aspect of our personal and professional lives. These disruptions are raising fundamental questions at each stage of an organization:
- Which jobs will disappear?
- What skills will employees need tomorrow?
- How can we develop teams when we’re not sure what the future looks like?
At Talentsoft, our responsibility is to provide guidance. As an organization that operates in the HCM industry, our core goal is to support people and companies with unforeseen needs.
As such, our number one priority is to promote collaborative initiatives and teamwork.
For this purpose, we continuously design our solution with four goals in mind:
- Get to know your people: their skills, experiences, and career drivers
- Plan your HR strategy by focusing on talents’ complementarity
- Help managers rely on each individual and their teams’ diversity to cope with complexity
- Build anticipatory organizations with adaptive upskilling and reskilling plans
We also focus on leveraging AI and matching technologies to create hyper-personalized experiences. This gives us the chance to put more humanity into the applications and processes that support team and individual growth.
Our two main objectives are to:
- Assist organizations in creating better places to work with more sensitivity to individuals by connecting people’s aspirations with available and future opportunities.
- Create a common language of skills that allows HR and managers to dynamically map skills and identify skill gaps across the organization.
To help organizations transform quickly, HRIS optimization and continuous innovation are must-haves. That’s why we built our HR processes on top of a fully integrated and open platform with a central and flexible Core HR.