It’s often said that business professionals wear different “hats” for each role they perform. For human resources professionals, this is especially true as they wear the hats of compliance officer, change management expert, and information technology decision maker.  As technology transforms HR roles and responsibilities, HR professionals need to use financial and business terms to rationalize technology expenditures and maximize the effectiveness of their strategic efforts. 

Using ROI and Other Financial Tools to Justify the Need for HR Technology

It’s often said that business professionals wear different “hats” for each role they perform. For human resources professionals, this is especially true as they wear the hats of compliance officer, change management expert, and information technology decision maker.  As technology transforms HR roles and responsibilities, HR professionals need to use financial and business terms to rationalize technology expenditures and maximize the effectiveness of their strategic efforts.

The business case for HR technology

Due to the fierce competition for funds within organizations, HR professionals must present a business case for technology investments. This business case should focus on presenting to CFOs and other executives the solution’s return on investment. Ideally, HR professionals should demonstrate how the technology investment will pay for itself in one to two years.

jayson-saba.jpg“HR professionals must understand that it’s not the biggest ROI that wins over CFOs and executives, but rather the most credible one.”
- Jayson Saba, vice president of strategy and industry relations, Ceridian.

To calculate ROI, HR departments must pinpoint direct and indirect savings of the solution. With direct savings, the business case will show key benefit savings in minimizing payroll errors, eliminating current spend, and accurately tracking time data (i.e. no rounding). Indirect savings demonstrate the solution’s ability to increase productivity and effectiveness through a ripple or implied effect.

To determine the direct and indirect savings of the solution, investigate the need for the technology in terms of current state, breadth and repeatability.

  • Current state: How efficient or inefficient are the HR processes? Is the organization relying on manual processes rather than automated ones? How much does the organization pay to maintain or license existing HR solutions (including personnel costs such as IT resources or analysts)?
  • Breadth: How many people will the implementation of the HR technology affect? Think of people that will use this technology as a direct and indirect part of their role.
  • Repeatability: How often will staff members use the solution? How will this repeated use save the organization money? For instance, a workforce management solution is used 8-10 times a day by one hourly worker.

“To rationalize an investment in HR technology, CFOs and other executives must clearly see how a particular solution will save the company money or make the organization money,” said Jayson Saba, vice president of strategy and industry relations, Ceridian. “HR professionals must understand that it’s not the biggest ROI that wins over CFOs and executives, but rather the most credible one. At Ceridian, we’ve partnered with a credible third-party, Nucleus Research, to build a RIO tool that accurately and reliably shows true cost.”

5 must-have HR technology features

Once executives understand and support the business need for a human capital management (HCM) solution, professionals should equip themselves to be savvy technology buyers. Specifically, Human Resources Executive recommends that HR professionals look for the following five features in a HCM solution:

  1. Provide a solution to a real problem. If the team wants their technology purchase decision to be supported by executives, then it must ensure that the solution solves a present problem or helps the company seize new opportunities.
  2. Deploy rapidly.  When you meet with HR technology providers, ensure that they provide you with an in-depth pricing structure and clear implementation timeline.
  3. Ensure ease-of-use. An aesthetic, professional design that looks intuitive to use will increase the adaptability among employees and the confidence of the C-suite.
  4. Provide mobility.  Employees’ increasing use of tablets and smartphones has led to a demand for device compatible technologies. If workers can access pertinent features of the HR system on their tablet or smartphone, they’ll be more likely to use and support the system.
  5. Ability to “talk” to other programs. A truly effective HCM system should be able to receive and transmit data to and from other systems, enabling professionals to use the technology in the way that works best for them.

“With solutions like Ceridian Dayforce Human Capital Management, HR professionals can easily demonstrate a strong return on investment,” Saba said. “Dayforce HCM provides organizations a flexible, easy-to-use solution that drives profitability and productivity. This solution easily receives approval of CFOs and HR departments, especially when they see that all of the functions work on one database and a single rules engine.”

For more information:

Receive valuable ROI tools from Ceridian’s webinar
Learn more about Dayforce HCM
Read Ceridian’s Effectively Partnering with IT article