HR Business Case and why it is essential to have one

 In HR Advisory

HR Business Case – Where do you start?

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In a previous blog, we explored the requirement for an “HR Health Check” or “HR Audit” and the best way to assist organizations to construct a future “HR Roadmap” for the whole Organization. HR Business Case helps to address the vital challenge faced by nearly all the CHROs to get the funding to support the “HR Roadmap” created in the preceding step.

Considering that the decision making power regarding system implementation as part of the Transformation initiatives in HR has shifted from CIO to CHRO, it provides more power for HR to select what they need, when they need it and how they need it.

HR traditionally has not been the forefront of producing business cases for funding approvals for applications before, so it is a brand new land for them.

Now HR has to prepare a robust cost/benefit justification and evaluation for all the new investments mentioned From the HR Roadmap.

This is where a well-researched and thoroughly documented “HR Business Case” will assist the organization to get their preferred financing for their proposed “HR roadmap.”

Three main reasons why you should build an HR Business case

There are at least three significant reasons why building a robust “HR Business Case” helps the organization.

The first reason is that the HR department must control its costs. However, to control costs, you must be able to measure them in the first place.

Secondly — and with much more far-reaching implications — actionable analytics nowadays are employed for the decision-making processes in almost throughout the organization. To determine company performance and connect it to competitive advantage; organization requires an assortment of information.

However, HR info is precious to omit from the equation, and no company today can efficiently gather and assess the breadth and amount of information it requires for this purpose without a robust HR System like SuccessFactors and insights-driven Big Data Analytics. The ROI here is at times hard to measure but is nevertheless quite real.

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The third reason for the “HR Business Case” for the company is that it helps justifies the requirement for a reliable technology and support architecture which could provide a financially quantifiable return on investment, in the form of higher productivity, and also reduced labour costs within the HR department.

This “combined architecture” is more commonly known as employee service centre, or HR shared services, employee and manager self-service, social collaboration tools, and mobile apps.

Very often we come across organizations who have implemented SuccessFactors as apart of their overall HR Transformation roadmap but are not quite sure if the new system in place is giving them the desired results as expected. However, without a well-documented business case, there is no way to know if you are successful or not. This is where the business case comes to the rescue of HR department and also helps in building a good starting point for future investments in HR as well.

HR Health Check – Current State assessment and future expectation

Your business case and its content will mostly depend on what you have identified as the challenge areas and improvement opportunities on your “HR Health check.” It will also focus on what you want to achieve within your “HR Roadmap.” However, in general, your HR Business case should have the following components:

Among the first tasks in preparing a business case is to ascertain why there is a need for a change. For information on this, please refer to the blog on “HR Health Check.”

The list of everything you identify for your company could be unique or similar to a number of the issues mentioned in the previous blog on “HR Health Check,” but documenting your current state and the future expectation will be important in building your business case.

Identify the Stakeholders and decision makers

Within your list of stakeholders and decision makers, there is a sponsor for your initiative. If you’re not the executive sponsor, then you’ll have to get that resource to assist you with getting support for your job according to your “HR Roadmap.”

A sponsor is a critical decision maker who will be committed to not only encouraging your SuccessFactors driven HR Transformation roadmap but support you through the implementation and change management process also.

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Know your Organization

Cloud HCM solutions like SuccessFactors bring in much change that impacts the whole organizations in a way never before due to the pace at which innovation is extended in the cloud is different then what organizations are used to.

That is why it is essential to understand your Company, its culture, its ability to take a significant change, and, most important, its short and long-term goals.

You got to understand how your organization goes about making critical investment decisions concerning overall transformation initiatives.

Consider whether employees, line managers, supervisors and senior management will support the fact that HR is bringing in a new system which might create additional work and accountability to them. These and more are some of the critical factors which you should take into consideration.

Identify HR Services Delivery

Drone delivering a service

The HR provides more services than many people realize. The execution of your SuccessFactors based “HR Transformation” initiative will change the kind of HR services you deliver as well as how you deliver them going forward.

To help determine the quality and quantity of those HR services, you will have to list all the deliverables that come from the HR area.

Moreover, assess not only how the implementation of SuccessFactors can alleviate some of the manual processes currently in place to deliver these services, but more importantly how you can start to supply those services, better, faster and more efficiently.

HR Roadmap – Determine Your Immediate Requirements & Deliver Value

In short your identified “HR Roadmap” should be able to determine its overall business value for the company short term and long term. Establish what your tangible and intangible savings and costs will be.

Be sure to check beyond the HR department for possible opportunities. Often there are overlapping services that HR provides, but doesn’t necessarily take the credit for.

To validate and compare what a SuccessFactors based HR Transformation project can bring to the organization, you will need to quantify what the cost is to supply your current level of services against what the new system is supposed to accomplish.

In the long run, if you can showcase how it is possible to align HR goals with corporate strategy and the way your business situation will effectively measure and report the effect on the bottom line, you have a potential winner on your hand.

Be sure to highlight how your HR function is ready to ride the “Digital HR” Wave and supply more strategic, higher value services at lower TCO.

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Founder & CEO , Renew HR , LLC
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A blog on Change Management for SuccessFactors projects

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