Building the HR System Business Case

Transcription

1 Building the HR System Business Case

2 Building the HR System Business Case Getting the right support and tools in place to progress your HR vision There has never been a better time for forward-thinking businesses of all sizes to reimagine HR to better fit the changing needs of a modern workforce. Employees today are more digitally aware, have far greater expectations regarding automation, and (quite rightly) expect their personal data to be properly looked after and managed. The stakes have never been higher for HR professionals who no longer serve just the needs of the business, they are also required to meet the high expectations of individual staff members too. But doing a great job requires the right tools and support, and for many HR professionals, getting access to those fundamental HR business systems can be a struggle. Gaining senior management support for HR activity can be a significant milestone on the road to achieving greater HR effectiveness. If you are an HR professional seeking internal commitment and investment in a new HR system to support your business goals over the coming months and years, this guide provides advice on how to build robust business case to add weight to your request. The key to success is to pitch your requirements from an HR perspective as well as from a wider business perspective. To get decision-makers on your side, you need to sell the idea to them and make clear not only how you and your department will benefit, but also how perceived hurdles can be overcome and, ultimately, how the solution will help the company to meet its goals going forward.

3 First steps It is vital to collate data on the current position and then continue to build on that picture as it develops. When you are actively monitoring and measuring HR metrics, you can present an evidence-based argument and show progress and performance once you have put changes and tools in place. Imagine how much better it will be to attend monthly or weekly senior management meetings with the latest stats and data tabled for discussion in much the same way as the business assesses its financial performance. With accurate and insightful information, it becomes a lot easier to persuade senior leaders to listen and to influence business direction from an HR perspective. The latest HR business systems have fundamentals built in that ensure those allimportant metrics are easy to retrieve and that reporting becomes second nature for the business. For now, you must use other means to source the information you need to start building a business case. Conduct a staff survey to assess employee engagement levels and (if possible) compare to previous employee survey results. Identify opportunities to align your people strategy with the overall business strategy. Establish what specific skill sets are needed to meet specific business goals and identify the gaps and development opportunities. What do you know about the HR performance of your competitors? How do you compare? Do you do an employee NPS? If yes, build a picture of the top line results. If no, set it up

4 Proving there is a problem You already know that there are issues with HR delivery that can only be solved with a robust, fit for purpose HR system. You may be having to work with an out-of-date solution that no longer meets your needs, or worse, a cobbled together set of spreadsheets, databases and paper systems that make it difficult to stay ahead of the game and impossible to produce any meaningful management information. No matter how challenging your current scenario, it s important to avoid anecdotal examples or negativity. Put simply, your business case must provide evidence of the specific issues and how that impacts the company. Below are examples of common focus areas: Inefficiency If your HR processes are inefficient already, these problems will only get bigger as the business grows. Companies focused on growth need to have the right back office systems already in place when that sales success translates into a larger people resource requirement, otherwise they run the risk of stalling progress. To build evidence of inefficiency, consider how many hours a month you spend on administrative-heavy tasks such as: Logging holiday Tracking sick days Recording hours worked Chasing managers for information Double keying data Updating employee details Prepare specific examples of inefficient processes that take too long and potentially cause problems with accuracy. Extrapolate how this will be impacted if staff numbers increase.

5 Data compliance As custodians of the personal data of employees, the company must comply with the law or face serious consequences. If data protection or statutory compliance responsibilities such as Right to Work and Gender Pay Reporting responsibilities are not dealt with appropriately, the company risks serious penalties, significant fines and prosecution. The Data Protection Act which came into force in and the new EU General Data Protection Regulation (GDPR) which replaces it from 2018 onwards puts the onus on you as an employer to take proper care of the information you request, hold and process. You must be able to show good governance, respond to queries quickly and effectively and take appropriate action as needed. Businesses who don t keep pace with these requirements are running the risk of falling foul of the law. The good news is that all of this becomes much easier with a robust HR system which holds data securely in one place. Provide a summary of current data processes including key areas such as consent, data collection, personal versus sensitive data, response to access requests and erasure procedures and timings. Highlight the risk areas and identify how these can be addressed with a new system. Information security Exactly how secure are your current HR systems? Consider this important question from three perspectives: Malicious threat from a third party (physically or virtually). Internal threat from an employee of the company (including a member of the HR team). Possibility of an inadvertent data breach such as a misaddressed containing employee data, or a physical file being lost. Summarise the risk areas identified and assign probabilities based on the current systems. Highlight the problem areas that could be addressed with a new system

6 Management insight Has your senior management team simply got used to the fact that it is difficult, if not impossible, to get an accurate view on key HR measures such as attrition, engagement etc.? Are you frustrated that this vital insight is not available to you as the HR professional, or to the business, without a significant amount of manual intervention? Management reporting is one of the most important benefits of an HR system and a key enabler in moving HR up the value chain. Collate stats and industry evidence on the measures you believe are most important to your business to identify goals you should be aiming for or achieving. Where possible, provide a best guess of performance based on your current data. Point out the areas where you are literally unable to report; for the rest, highlight assumptions you are forced to make due to the data issues you currently face and the risks associated with this

7 What IT needs to know When putting together the business case for investment in an HR business system, you must consider the needs of the IT team in advance in order to prepare for the objections or hurdles that will need to be overcome and create the best chance of a positive outcome. Choosing and implementing an HR system will be another priority to add to what is probably already a long list of IT priorities for the business so it makes sense to think about the issues that might arise in order to smooth the process of moving forwards. Consider the following: What are the main features and functionality provided by a new solution provide and what is it replacing? and the risks associated with this. Is it a Cloud-based solution? Does the company already have other systems in this format? Does it integrate with other company systems e.g. payroll? Bear in mind that this might be a red flag for IT. What is the implementation process and how long is it likely to take? How quickly will you see value? What data migration activity will be involved? Think about where and how company HR information is currently held and the practical issues regarding moving it to a new system. Who could be responsible for this? What will the testing and go live process be? Is training needed for users? What level is offered, how long for and what happens for new starters? Does the proposed software follow best practice? Are you choosing best of breed? Once the system is live, does the data get backed up? What is the disaster recovery process to protect data held in the Cloud? Does the proposed system come with support? Is that on site if needed? Is it phone based? Is it scalable? No one wants to jump through hoops of and training to purchase software only to find out a year later that you have outgrown it and you need to replace it. How often is the software updated? When is the next update planned and how are customers notified? Have you reviewed the supplier s credentials? What are the wider capabilities of the supplier?

8 What finance needs to know Financial decision-makers are interested in three core areas: 1 What is the cost of doing nothing? 2 What cost savings could be made? 3 What new costs will be incurred? The first of these provides you with the opportunity to identify the value of the time and resources currently being wasted. Refer back to the inefficiencies you identified earlier and assign monetary values to these based on an hourly rate and time spent. Build a monthly cost picture of continuing to function in the current format. Next define the time savings and corresponding monetary value with a new, more efficient HR system in place. Think about the key functions that can be automated. Assign costs to one-off tasks such as responding to data access requests or creating a management report for the Board meeting. Third, provide a summary of the investment required to support the proposed new system including up-front and ongoing costs. Consider the following: How is it priced? HR business systems can be priced per seat, per concurrent user, and per processor for example. Is it a capital investment or a subscription? Are licence fees payable? Are upgrades included in the fees? Are there additional costs for support, training, new users etc.? Are flexible payments an option? Rather than purchasing software to install, or additional hardware to support it, a SaaS solution can be paid monthly via a payas-you-go model. Transitioning costs to a recurring operating expense allows many businesses to exercise better and more predictable budgeting. Users can also terminate SaaS offerings at any time to stop those recurring costs. When can the business expect a return on investment?

9 What senior management needs to know We are at risk of non-compliance There are very real and concerning HR compliance risks which mean that moving from the current inefficient data management process is a business imperative. Provide specific examples of features in the new system that will address this. We are falling behind general employment standards To attract and retain the best employees, we need to be able to keep up with new modes of working and interacting with HR. A good example of this is the demand for self-service which is proven to be key for employee engagement. Provide specific examples of features in the new system that will address this. We must improve training and development opportunities The latest report from Deloitte says: Glassdoor data reveals that among Millennials, the ability to learn and progress is now the principal driver of a company s employment brand. Yet only a third of Millennials believe their organisation are using their skills well, and 42% say they are likely to leave because they are not learning fast enough. Provide specific examples of features in the new system that will address this. Employees want more internal mobility Staying motivated at work is no longer just about pay rises or promotions. Research shows that developmental and rotational assignments and professional development programmes are effective in improving employee engagement and retention. Provide specific examples of features in the new system that will address this. HR should be delivering robust metrics to the Board There is a lack of confidence from both sides in the current metrics offered which is a direct result of the inadequacies of the current systems. Provide specific examples of features in the new system that will address this.

10 Glossary Cloud computing means that data is not stored locally but is spread out among several remote servers accessible through the Internet. Cloud computing enables companies to consume use an application as a utility rather than having to build and maintain it in-house. Software as a service (SaaS) is a software distribution model. A thirdparty provider will host applications and make them available to customers over the Internet. SaaS is one of three main categories of cloud computing, alongside infrastructure as a service (IaaS) and platform as a service (PaaS). SaaS removes the need for companies to install and run applications on their own computers and eliminates the cost of buying and maintaining hardware, software licensing, installation and support. User interface refers to all the parts of a website, app, computer, smartphone, etc. that the user can manipulate and interact with. Display and touch screens, website menus, keyboards, your cursor are all part of the user interface. Software is a program or set of instructions that tells a computer, phone, or tablet what to do. Software includes individual applications (web browsers, word processors) as well as system software like operating systems (Microsoft Windows), drivers (software that allows operating systems to communicate with hardware like printers), and utilities (tools like anti-virus programs or hard drive defragmenters). Data modelling means determining what kind of data is needed and how it will be structured and organised. Data visualisation refers to the use of graphs, charts, tables, infographics, etc. to present data and determine insight from it. Relational database management systems (RDMS) are used to organise data into tables so that it can then be accessed or reassembled. Examples include SAP and MySQL. Per Concurrent User Pricing is based on a set number of users accessing the software at one time e.g. 5 concurrent users means a program can be installed on 20 machines but only a maximum of 5 people can use the system at once. Per Processor Pricing is based on how many machines (PC s or servers) the software will be running on. Many larger enterprise software applications use this method to determine their prices.

11 Get the technology in place to make a real difference in your business Gaining buy-in to invest in a new HR system is a massive step forward but what next? It s important to seize the opportunity and use the momentum created to continue making headway. Start the ball rolling: Read our brochure to discover if Access HR could be the solution to make your working day more streamlined, efficient and less admin oriented. Complete SaaS based HR platform Engaging self-service features Robust expense management Comprehensive absence management Versatile training & performance features Intuitive applicant tracking for inhouse recruitment