Building Your Strategic Business Case for HR Technology. Speaker: Kristie Evans Managing Principal HR Project Manager PM Instructor

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1 Building Your Strategic Business Case for HR Technology Speaker: Kristie Evans Managing Principal HR Project Manager PM Instructor

2 Agenda Today s Goals HR Value Outcomes Break 10 am Methodologies Business Value Outcomes Lessons Learned Tweet your ah-ha moments 2

3 About the Presenter Kristie W. Evans CEO, HR Logistics CEO/PM, HRPMO.com CEO/Instructor, HRPMO University A former HR practitioner with over 20 years experience as a corporate executive, 13 years as an external consultant and business owner, and experience with over 120 HR related projects in a variety of industries and organizations. 3

4 4

5 5

6 Your Goal for Today Today will be successful if 6

7 HR Technology Hampers smooth operations Hinders workflow Creates the need for workarounds due to absent functionality Requires significant IT support Provides limited reporting and analytics, if any Does not enable strategic workforce development and planning Is unreliable and unstable Must be supplemented by ancillary systems such as Excel and Access Has data integrity issues Has limited scalability Is reaching the end of its lifecycle Is being decommissioned Is built in an obsolete language and antiquated platform 7

8 What s the point? To improve performance the performance of HR technology = performance of the organization 8

9 What s the value outcome? Decrease operational costs & increase cashflow Increase net sales Increase profit margin Create more stability, less effort and less errors Benefit your customers Prepare and position the organization for future business requirements Improve decision making 9

10 Business Case = Business Intelligence Business intelligence (BI) is the set of techniques and tools for the transformation of raw data into meaningful and useful information for business analysis purposes. 10

11 Business Intelligence comes from the business Operations Inbound Logistics HCM (People) HRIS Finance Outbound Logistics Value Chain Business Intelligence Infrastructure Legal Marketing & Sales Customer Service & Retention General Mgmt Technology 11

12 Business Intelligence comes from the business Operations Inbound Logistics HCM (People) HRIS Finance Outbound Logistics Value Chain Business Intelligence Infrastructure Legal Marketing & Sales Customer Service & Retention General Mgmt Technology 12

13 Support Activities The Value Chain Firm s Infrastructure Human Capital Management Inbound Logistics Operation s Technology Procurement Value Chain Outboun d Logistics Sales and Marketin g Service Profit Margin Primary Activities Dinesh Pratap Singh's visualization for Porter's Value Chain 13

14 What s Involved? Inbound Logistics Operations Value Chain Outbound Logistics Sales and Marketing Service P e o p l e Primary Activities Manufacturing = Raw Materials Building the Product Distribution System (Retail) Creating Demand (Advertising) Retaining Current Customers SAP = Programmers Programs Installation Presentations / References / Sales Personnel Upgrades / Customer Support 14

15 Where s HCM? Inbound Logistics Operations Value Chain Outbound Logistics Sales and Marketing Service P e o p l e Primary Activities Manufacturing = Raw Material s Building the Product Distribution System (Retail) Creating Demand (Advertising) Retaining Current Customers SAP = Programmers Programs Installation Presentations / References / Sales Personnel Upgrades / Customer Support 15

16 Support Activities The Value Chain General Management Labor Costs Data & Transaction Support Best Prices Inbound Logistics Firm s Infrastructure Human Capital Management Operation s Technology Procurement Value Chain Outboun d Logistics Primary Activities Sales and Marketin g P e o p l e Service Profit Margin Dinesh Pratap Singh's visualization for Porter's Value Chain 16

17 See Saw of Risk Number of Employees Risk per employee 17

18 Business Intelligence comes from the business Operations Inbound Logistics HCM (People) HRIS Finance Outbound Logistics Value Chain Business Intelligence Infrastructure Legal Marketing & Sales Customer Service & Retention General Mgmt Technology 18

19 19

20 What is Human Capital Risk Management? 1. An understanding of the mechanisms of how business works 2. Translating business requirements into human capital management impacts 3. Providing blended support to leverage talent, minimize expenses, and mitigate risks associated with human behavior 20

21 The Employee Relationship Management Value Chain Talent Pipeline Sourcing Networking Qualifying Hiring Productivity Onboarding Branding Loyalty Professional Development Workforce Planning & Development Skills Value Performance Skills Development Opportunity 21

22 Risk is Unknown influences Negative impacts Unforeseen future events Stress on the system Poor preparation Inattention Exceeding capacity Price is low but demand is high 22

23 Human Capital Risk Management Considers impacts and alternatives to identify the best solution Manages negative impacts to the organization by planning Assesses and analyzes variables to improve decision making 23

24 HR Technology provides Labor costs Workforce patterns Talent opportunity assessment Talent evaluations (formerly performance evaluations) Budgeting 24

25 An Acquisition To Increase Market Share Consider the SAP acquisition of SuccessFactors. Why did they purchase this company? To gain access into the talent management market through a point solution To gain customers of SuccessFactors To integrate a best of breed solution into their tier 1 software product To increase the value of their product to their customers. 25

26 The Employee Relationship Value Chain Talent Pipeline Sourcing Networking Qualifying Hiring Productivity Onboarding Branding Loyalty Professional Development Workforce Planning Skills Value Performance Skills Development Opportunity 26

27 HR Technology provides Labor costs Workforce patterns Talent opportunity assessment Talent evaluations (formerly performance evaluations) Budgeting 27

28 Business Case = A Decision Support Tool HR Tech 28

29 How are Decisions Made? Data Analysis Models/Rules Reports 29

30 How are Decisions Made? HR Tec h Data Analysis Models/Rules Reports 30

31 It s About Making Better Decisions Needs Analysis Business Case Business Intelligence Feasibility Study Operational Efficiency Gap Analysis 31

32 The Business Case is A report of evaluating the pros and cons of change Needs assessment do we need it? Feasibility study can we afford it? Gap Analysis how big is the change? What s the value outcome? 32

33 Options Outsourcing vs. Insourcing vs. Co- Sourcing Shared Services vs. Localization Platform as a Service (PaaS) Software as a Service (SaaS) Hosted HR Tech 33

34 Potential Costs Technology Initiatives ERP = $6 - $8 million HRIS (License) = $1 - $4 million HRIS (SaaS) = $75k - $300,000 BPO (Business Process Outsourcing) HR Tech 34

35 35

36 Why and How Your business case should answer two questions Why? Why = strategic justification How? How = tactical execution HR Tech 36

37 Why Why doesn t the current state support the business strategy? Why can t the status quo continue? Why is there a problem? Why does change support the business strategy more effectively? Why devote resources to it? 37

38 How Why does the future state support the business strategy more effectively? For example: increasing market share (Value Chain) improving sales (Value Chain) Improving Supplier Network (Value Chain) Negotiating Better Prices (Value Chain) Reducing Costs 38

39 How How will you implement with minimal disruption to the value chain? How is your plan going to be deployed? How are you going to pay for it? How will you measure ROI? How will you manage resources and milestones and timelines? How must be supported by your analysis of the costs of dollars, resources, and time 39

40 Building The Business Case

41 Your Business Case Components Executive Summary Analysis of Current State Analysis of Future State Cost/Benefit Analysis Recommendations 41

42 Executive Summary Do it last because you don t know how you will position the solution yet. 42

43 HR Tech What is the current state today? 43

44 Questions to ask are What are current business operations? Are they documented? If so, how? Does practice = process If not, what is the best tool to use for analysis? 44

45 And What opportunities for improvement already exist? How well is the current workforce leveraged? How much support does the current state require in labor costs, fixed fees, licensing, maintenance, etc.? What can re-engineering accomplish now? If re-engineered, how much more can the current state be leveraged? 45

46 And What are the risks in the current state? Accuracy? Obsolescence? Security? Compliance? Resources? Decision Support? Integration? Timeliness? 46

47 And Who are the stakeholders? How will they be impacted? How will current operations and the value chain be impacted by this change? What is our organization s history of success with change? 47

48 And What is the business climate for our organization? How broad is the impact on the organization of this project? 48

49 49 The Gap Analysis

50 The Gap Analysis Current State }Gap{ Future State 50

51 The Gap Analysis The gap is a measurement of the difference between: your organization's current practices your organization s business needs/best practices and business requirements. 51

52 The Gap Analysis creates a quantitative measurement of the gap in functionality. 52

53 Example of Benefits Requirements Matrix 53

54 Example: Benefits Administration Gap Analysis 0% = No Gap 54

55 55 Consolidate Your Findings

56 56

57 57

58 Example: Organizational Health Gap Analysis Organizational Health Assessment Comparisons of Gap Measurements between Teams ORGANIZATIONAL ALIGNMENT Board Gap Exec. Team Gap Mgmt Team Gap Leadership Workforce Development Clarity and Transparency Trust Discipline Overall Organizational Health and Alignment

59 59 Cost / Benefits Analysis

60 The Cost/Benefit Analysis Business Case must include a cost/benefit analysis Business systems are composed of people, processes and technology Measurements start off subjective, but should become objective through research as you learn the pros and cons of each solution. 60

61 Current State: Cost components to consider Software/Hardware licensing/maintenance fees Upgrades Fixed costs vs. variable costs Labor costs of internal resources Fees of external resources (SMEs, Contractors) Interest Expense on Financing Opportunity costs from poorly managed intellectual Capital Risk exposure 61

62 Future State: Cost components to consider Software/Hardware licensing/maintenance fees Future Upgrades Fixed costs vs. variable costs Labor costs of internal resources for implementation Fees of external resources (Project Managers, Implementation SMEs, Contractors) Interest Expense on Financing Infrastructure preparation (Hardware / Software) Communications, training, change management Reduced productivity of Value Chain 62

63 Variables Impacting Cost Analysis Size of your organization Complexity of operations Customizations or modifications to standardized products Time of year Economic environment 63

64 Include Pricing for doing nothing Pricing for more than one solution Pricing for a phased approach 64

65 Include Acknowledge lessons learned internally from other projects Network with your peers Access your trade associations Talk to vendors, if applicable Research white papers 65

66 Bottom Line Conduct thorough research to validate the recommendation supports the business strategy. 66

67 How is Tactical Execution 67

68 How How does the solution the future state reduce expenses and/or increase profit? 68

69 Your Business Case should answer questions like these How will the future state reduce expense and/or increase profit? improve business operations? provide stronger decision support? ensure synergy between systems and processes? 69

70 And How will the future state mitigate the current risks? impact stakeholders? Impact other initiatives? 70

71 And, of course How will you measure ROI? What measurements do you need? What tools can you use? 71

72 72 The Executive Summary

73 The Executive Summary Who do you need to convince? What motivates each party? What actions do you want each party to take? How can you most effectively communicate the action you want them to take? 6 Steps to Building a Better Business Case - Karl Start/Bill Stewart. Inc.com, 3/14/

74 The Executive Summary What items will you need to seal the deal? 6 Steps to Building a Better Business Case - Karl Start/Bill Stewart. Inc.com, 3/14/

75 Market and Sell the Solution (WIIFM What s in it for Me?) 75

76 Start with Yourself Sell yourself first you are your first Champion Work to establish your credibility why trust you? Who are your customers and stakeholders Is there a potential for adverse impact to a customer or stakeholder? 76

77 Market and Sell the Solution (WIIFO What s in it for the Organization?) 77

78 The Business Case Validates the need Provides a foundation to sell others Is objective Builds acceptance based on sound research 78

79 Then Sell to Others Partner and collaborate build strategic relationships Sell to internal leaders Be objective build acceptance based on sound research and analysis Demonstrate how the Business Case validates the need Consider bringing in objective experts 79

80 At the end of the day Create Value Outcomes 80

81 Make Better Decisions HR Tech 81

82 Implement the right solution by using business intelligence. 82

83 83 Make a Difference

84 Questions / Feedback? Speaker: Kristie Evans Managing Principal HR Project Manager PM Instructor HR Logistics LLC HRLogistics.us HRPMO.com 84

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