Welcome to the lecture from HR WEEK conference 2021 with Irena Domjanović, a Managing Partner in Agilcon. Let’s learn how to build a compelling case for investment in HR tech!
We think HR is a strategic function in the company. HR teams are determined to be perceived as such and that they’re adding strategic value to their business. And we strongly believe this is the case. A lot of people say that this is the case, but, is it really something that is given enough budget when it comes down to it?
As an HR professional, you want to be able to show to your management and your stakeholders that there is a better and more efficient way to manage and develop your people, and extract value from all of the newest technologies that the market is offering to you in this wonderful new age.
Our surveys have shown that forward-thinking HR leaders do see the advantages and extract a lot of value out of HR technologies. Over 45% are planning to increase the budgets they’re already spending on HR technologies, and those that have invested have seen a 50% overall improvement in their company performance. The most important fact was that 54% of their HR staff has their time freed to perform more strategic work. A lot of HR tasks can be automated so that they can focus on really important things: developing people, making data-driven decisions for the management, etc.
What are the main reasons to invest in HR systems?
This is something that each company must see for itself, as it is very company-specific. But of course, there is a whole range of tangible and measurable benefits associated with investment into an HR system.
First of all, there is the reduction in attrition. Employees want to work with a company that listens to their needs, enables their career advancement and promotion, and has a forward-thinking approach. Implementing a new HR system will bring all those benefits and demonstrate that a company is committed to creating an agile, engaged organization. With that in mind, it will show performance improvement. As employees crave attention, they crave appreciation and visibility, and the new HR system will help HRs provide a clear path for them towards improving their performance via regular feedback and communication.
HR systems can help HRs and their stakeholders have a standardized process towards people management. Some of the obvious benefits are: reducing recruiting time, finding the right people quicker, helping HRs to see all candidates and how they compare to one another. They make recruitment processes fast, effective, and reduce the overall time to find the best candidate.
Productivity is a significant reason why HRs need an HR system. Because if they improve their workplace experience, they can reduce the time spent on repetitive administrative tasks, as an HR system will do this for them.
Finally, HR systems help make better, data-driven, decisions. Having the data in a single place such as an HR system, HR managers will have a very clear and unique source of insight into the business.
Having HR systems will make HRs the drivers of change that we all want.
Two important elements to remember are leadership and planning. Those are very important elements to drive change. Change management is about having a clear vision for the future and communicating this vision to the stakeholders.
As HRs build their business case for investment into HR tech, they need to be very careful with the preparation. The proposal needs to demonstrate how the new system will support all the individuals, teams, and the business as a whole during that change.
So, who do HRs need to influence? For each organization, this is quite specific, but there are some of the usual suspects. After thinking about the main benefits of introducing the HR system, it is time to identify key decision-makers and how they will respond to the proposition. They might be the tech expert, which is usually the CTO or the IT director. It can be the CFO, the Director of Legal or Compliance, some of the key managers, etc. And of course, the most important person, the CEO.
To make a successful business case it is important to consider all their interests and then talk to them. See what their needs are, not just in terms of an HR system, but also their overall motivations and overall goals – to the measure that they relate to HR. HRs need to try to find out what would appeal to them the most, and what difference will the new system make to their working life.
There are seven steps to building a case with the stakeholders and convincing them you need an HR system.
STEP 1 – Define your vision and business needs
Carefully consider what the needs of your business are. You probably have a range of reasons to replace your HR system or implement a new one. The best way to start is to lay out these reasons very clearly. You can group them into three most common groups:
1) Your current needs and problems
The needs might be: reducing errors in data management, reducing your recruitment time, etc. But it’s important to think about it clearly and include not only your problems but the problems of your stakeholders as well.
2) Your upcoming challenges
What we see quite often is that people think about what their problems are right now. And while this is good, it is not enough. Buying an HR system is not always about money. It’s about the energy that you will have to invest into implementing your system. So, don’t just think about your current needs, but think about what’s about to happen in the near future, or the distant future, if you can think that far ahead. Some upcoming challenges that you might have can be: improving applicant experience, how to make an onboarding experience more positive, how to manage risk, how to manage fraud, and how to extract some business insight through predictive analytics, or visual intelligence…
3) Aligning your employees’ calls with your organizational values, and goals
Implementing an HR system is not just about reducing the number of problems that you have as an HR or as the whole organization. It’s also about creating a positive experience for your employees. And that is why you have to talk to them as well and see what kind of system they would like to have, how you can make their lives easier while dealing with some processes that you might have within your organization. That will greatly improve your employee satisfaction, it will positively influence your culture, and it will definitely improve your talent management processes. Regarding the overall vision, ask yourself two crucial questions: What is it that you want to achieve? How will your ambitions connect with the overall business vision?
STEP 2 – Identify benefits and define what success will look like
Once you have identified your needs and your vision, you can now work with identifying benefits and defining what success will look like. You should give careful thought to how these benefits specifically relate to your business and then outline them very clearly in your business case. They can be workforce visibility, enhanced productivity, improved workforce experience, etc. For example, you’ll say “Okay, this is what we’re trying to accomplish. We want 7% talent acquisition, labour cost savings, we want 15% people management, labour cost savings, we want 30% management and overall labour costs cost savings, a reduction in paper documentation, compliance to be compliant…”
STEP 3 – Make a vendor list and compare them
Investing in a new HR or people system is a major decision. That’s why it is essential to research all the vendors and solutions to make a rational, well-balanced decision. When comparing different solutions, there are several key factors to be considered.
The most important is how well do vendors support your current and future business needs. You have to talk to them, spend a lot of time with them and see how they have done this for others. The other factors might include the usability of the solution. Also, are they able to offer consulting or business processes? Do they offer local support? What are their references and how are their customers satisfied with what they have done both in technological terms and then in business consulting terms? In the end, you talk about the initial cost, long-term costs, how easy it is to use the system, how easy it is to implement the system, and how well the system will work with your business systems.
STEP 4 – Identify and evaluate risks of doing nothing
When you do all of that, you will have to talk about the risks of doing nothing. This is your greatest enemy. It is the easiest thing to do – just do nothing and say “Look, I’ve lived with this what I have now, I will live with it further.” But, of course, there are many risks of doing nothing. A lot of companies can unfortunately confirm this.
if you want to stay competitive and be on the right side of regulation and track and retain the best talent, you will have to think about investing in tech.
STEP 5 – Create a business case and demonstrate the ROI of new technology
Once you’ve done all that, it is time to create a business case. HR people, unfortunately, might not be used to doing this. A lot of other managers in the company are much better at this because this is what they do regularly. Here’s some advice: among other things, in your business case, demonstrate how your new technology will benefit the organization, what are the expected costs, and what are the possible savings of benefits.
STEP 6 – Get your management and key stakeholders to buy-in
Get your management and key stakeholders to buy-in. Your business case can be flawless, but if nobody believes in it, you will not get very far.
Remember to consider all of those needs about the goals and motivations of your stakeholders and get them involved. For each stakeholder consider the following questions:
- What are their goals and motivations?
- What will they expect from the system for themselves and the whole organization?
- What will they want as a return on investment?
- What questions will they have?
- What may be their objections?
STEP 7 – Make a plan and be determined in your execution
Make a plan. Because even if you convince your stakeholders, they will ask about the next steps. And your plan also has to be flawless. Take the phased approach and identify the quick wins, something that you can show in the first phases of the project. Because the project is not done until it’s done. Even if you get the approval, you will have some enemies and some people will ask why is it taking so long because they are not seeing any benefits immediately.
So think about easy things. First, think about front-loading quick wins. Think about delegating responsibility, maybe even hiring consultants. Communicate your progress often and keep the key people involved. You want to make them collaborators. You do not want to make them spectators or, god forbid, enemies. Track your success. Track your challenges. Communicate what you have done, be very flexible because things go wrong. And keep it simple.
Irena Domjanović is a managing partner in Agilcon and a long time consultant to some of the biggest companies in the region, helping them create better experiences for their employees and customers. As a senior manager and a long time professional in the field of HR and marketing technologies, she has a great deal of experience in implementing technologies to improve business processes. If you want to find out how you can improve your HR tech implementation, reach out to irena.domjanovic@agilcon.com
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