How to make the business case for HR software

COVID-19 continues to put huge financial pressures on many businesses, causing them to tighten their budgets and hold off on projects. And with buying or updating HR software often down the priority list even during pre-pandemic times, incorrectly regarded as just a ‘nice to have’ rather than essential, convincing the board of its value can sometimes be challenging.

But with many organisations having to move a lot of their operations online, the latest generation of HR systems can make an enormous difference to both the productivity and profitability of a business. Large numbers of people are working from home, so much of their day-to-day work relies on being able to access information and getting tasks done online.

So, 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 roles.

What’s the best way to convince the people holding the budgets that an investment in HR software is the right call?

Identify the pain points

Every organisation has practices that could be improved, especially when having to react quickly to the latest government guidelines or business changes.

  • Maybe your performance management process 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 your management team about how these issues are affecting the business – and, 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 highlight when existing HR 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

Several people 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 approach.

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 to know who the detractors might be.

  • Is the IT department concerned about the data security and integrity of the system you’re proposing?
  • 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. 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

There is a widely held misconception that HR software is expensive. Thanks to advances in technology it is now much more cost-effective and within the reach of pretty much any growing business.

Reach out to your prospective suppliers to enquire about pricing, as well as setup, training, maintenance, and any other additional costs. Make sure you support your internal business case with a clear indication of these likely costs, how they’re calculated and when to expect the charges.

Be realistic

If you’re making the case for a first-time investment in HR software, it’s important to be clear with your management team about the type of solution the business needs and exactly what the software will do for you. Reassure your 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 significantly in recent years and has become much more flexible. There’s no need to buy into functionality that you don’t require or won’t use just yet – many solutions can be scaled up, and new features added, as your 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 employees, and can serve to emphasise the important role both play in managing and keeping data accurate and current. And internal HR portals can do much to raise engagement, and encourage greater innovation and collaboration within the business.

Ready to find your HR software? Check out this guide on evaluating a new HR system.

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