How to make the business case for HR software

When budgets are tight, it can be difficult to persuade directors to invest in either buying or updating HR software. It’s often something that gets pushed down the priority list and is regarded as ‘nice to have’ rather than essential.

how-to-make-the-business-case-for-hr-software-bigThe latest generation solutions can, however, make an enormous difference to both the productivity and profitability of the business. Far from being a luxury, HR software is a valuable business tool that not only makes people processes more efficient and consistent, but also frees up HR and line managers time so they can focus on the more strategic aspects of their role.

So what’s the best way to convince the people holding the purse strings that an investment in HR software makes sound business sense?

Identify the pain points

Every organisation has practices that could be improved. Maybe your performance management system isn’t being applied consistently across the business? Perhaps managers are constantly complaining that sorting out holiday requests is taking an inordinate amount of their time? Or maybe you suspect that absence is becoming a real problem but you haven’t got the data to back up your concerns? If you can be clear with the management team about how these issues are affecting the business – and in particular what the impact is on the bottom line – you have a much better chance of securing their attention. As an HR person, it can sometimes be difficult to point out when existing systems aren’t working as well as they should, particularly if you have been involved in setting up or managing them. But business needs change, new technology becomes available and being bold and telling it how it is will win you more respect than brushing problems under the carpet – particularly if you have also come up with a potential solution.

Know who you need to influence

There are a number of people who could potentially be involved in a decision to invest in HR software – so it’s important to understand who the key influencers are and which buttons you need to press with them. The finance director, for example, is more likely to be interested in software that saves the business money – and will therefore be more receptive to messages about how having a better understanding of absence patterns could help managers improve attendance and cut the cost of sick pay. The MD, on the other hand, might be more concerned with making sure everyone is motivated, enthusiastic and working towards business goals – in which case emphasising how HR software can help build engagement could be your best strategy. The key to success is to think carefully about who’s likely to be involved in the decision and what their individual drivers might be, so that you can tailor your pitch accordingly.

Identify your champions

Who in the business do you need on your side – and who might derail your project if given a chance? Identify your champions early on and get them working for you to support the business case. It’s equally important, however, to know who the detractors might be. Are the IT department concerned that they will lose influence and control if the business chooses a system that is hosted in the Cloud? Are line managers worried that a new system will be complicated and time consuming to use? Often people object to new systems because of a lack of understanding of how they will work. So pick those people out and talk to them sooner rather than later so that you can reassure them of the benefits a new or updated HR software system will bring.

Be clear about costs

Make sure you support your initial case with a clear indication of likely costs. Suppliers who provide the latest generation Software-as-a-Service type products are usually very up front about their costs and in most cases you will find fees on their website. Some solutions, such as Cezanne OnDemand, have a pay-as-you-go pricing model, with fees being adjusted on a monthly basis depending on the number of employees being managed at any given time. Older-style vendors, who offer to customise or configure software for you, are usually less transparent about costs because of the nature of their product – but based on their experience, they should be able to give you at least a ball park figure based on the number of employees you have and the functionality you need. There is a widely held misconception that HR software is expensive. Thanks to advances in technology, however, it is now much more cost effective and within the reach of pretty much any growing business.

Be realistic

If you’re making the case for a first-time investment in HR software, it’s important to be clear with the management team about the type of solution the business needs and exactly what it will do for you. You can reassure the decision-makers that there is no need to get tied into multi-year contracts or complex project implementations. The world of HR software has changed enormously in recent years and the latest generation solutions are much more flexible. There’s no need to buy into functionality that you don’t need and won’t use just yet – many solutions can be scaled up and new features added as the business grows and your needs change.

Emphasise the wider benefits

HR software can do much to streamline people processes, reduce admin and cut costs. But make sure you emphasise the wider benefits in your business case too. Self service systems, for example, put technology in the hands of managers and can serve to emphasis the important role they play in managing and motivating their people. Internal social portals, such as the one included with Cezanne OnDemand – can do much to raise engagement and encourage greater innovation and collaboration within the business.

Good luck with making your business case – and do share the strategies that have helped you get to ‘yes’ when purchasing HR software.

You may be interested in reading: What’s holding HR back? Is it technology?

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