The full title of this article is Technology meets HR: Selecting and Justifying the Right Solution. I had my first chance to publicly crystallize my thoughts and research on the confluence of HR and Technology at an international HR conference held in Ghana in 2009. Then, like now, my task as the speaker, was to provide HR professionals and business executives with a sort of road map for selecting and justifying investments in people management technology.
In choosing the right solution your objective is to get a solution that meets your needs at the least possible time and money cost. Your next hurdle, probably the most important one, is to justify (sell) your selection so as to get approval to purchase – it is at this second task that many people’s knees knock against each other.
The Impact of Technology
Technological advancements have monumentally altered the way we live and do business. Personally I still consider the fax machine one of the most intriguing devices ever made – considering that it makes it possible for you to send a document from here to another country in less than 2minutes. Next is the Bluetooth.
Say you need to send a music file, egpakurumo by Davido from your laptop to someone’s phone (not a Nokia 3310); all you need to do is send by Bluetooth – just like that it goes through the air and arrives on the phone!With technology a lot of business decisions are now being made in far shorter time leading to shorter business cycles, more speed, more accuracy, etc.
The interconnectedness that it fosters makes it possible to do business in multi-locations, multi-regions, across race, meeting the needs of a truly diverse and dispersed customer base.Technology has been about speed, accuracy, convenience, increased collaboration … and possibilities.
HR Technology – Application Areas
We now find a plethora of uses of technology for people management. Salary earners and payroll managers remain eternally grateful to a simple technology (one of the best things after slice bread) called Microsoft Excel. People management has gone from the use of hard cover booklets as payroll or attendance registers to the use of Enterprise Resource Platforms (ERPs).
You find its use all through the HR Pipeline or employee lifecycle. If interested, you can now find technology solutions/softwarefor Talent Management, Resourcing/Recruitment, Onboarding, Communication (intranet), Learning & Development, Performance Management, Human Resources Information Systems (HRIS), Records Management, Reward and Recognition, Separation, etc. There are full-scale to scalable bit-sized applications – depending on your needs, knowledge-level and budget. Increasingly we have the lesser known Software-as-a-Service (SaaS) and the Open Source applications (Open Source means free).
HR Technology Deployment Programme – the full picture
Before we get flooded by the details of selecting and justifying investments in people management technology, lets scope the whole yard and get a sense of the map of all the requirements. What are the likely steps involved in deploying HR Tech? I can see eight steps:
- Determine your needs
- Select the technology
- Develop project deployment plan
- Justify the technology
- Deploy project of installing technology
- Technology goes live
- Measure effectiveness
- Lessons Learned
Selecting the Technology
In selecting the technology, there are at least four areas the HR Manager needs to look at, Pre-installation, Implementation, Post-Installation and Long-term. At pre-installation, the questions/concerns are about specific organisational needs or challenges, the scalability and flexibility of the solution, the level of web-enablement possible/required, user-friendliness, vendor’sreputation, type of reports, security and access controls and so on. During implementation, we want to know how much disruptions of work it would require, resource requirements and the duration.
In planning for post-implementation, we want to know the amount/type/cost/levels of user-training and also general user-acceptability. We need to have the long-term in view and for this we must be clear of the acquisition cost versus the total cost, maintenance costs as well and the application’s capacity to withstand growth (growth in users and growth in uses). When comparing software one of the sites to get information from is www.comparehris.com.
Justifying the Technology
You have selected but someone else approves the purchase, so how do you justify to the person (CEO) or persons (executive committee) that this purchase is urgent and important? You are asking yourself these questions, “how do I get it approved and how do I sell it to the approving parties?” Sometimes it is easier for a camel to pass through the eye of a needle than to get approval for investment in people management software. But here are some ideas that we can use to increase the odds of success…so help you God!
1. Identify the power map
This involves identifying all the stakeholders to the HR technology. A stakeholder is anyone that can be impacted in any way by the introduction of this technology. Not just people associated with the technology’s introduction, but may be impacted by its result and functionality upon project completion. Are there ‘power centres’?
These are people who have personal goals and agenda that may be incongruent with the introduction of this technology? Please find out. Invest time and effort into understanding their paradigms and seek ways to win them over during the planning phase. Conduct mini-business cases by soliciting their input and contributions through one-on-one dialogue.
2. Develop the business case
A business case is a justification for a business project. A business case requests funding for a project either internally from an organisation’s financial decision-makers or externally from investors. It compares the costs of a project with the benefits that it provides. It MUST show that the benefits outweigh the costs.
In many instances, it includes financial analysis that calculates the project’s return on investment (ROI). Although financial information is important, a business case is more than a financial justification for a project – it is a business justification.
The business case should show that the project will help the organisation meet its goals. It is otherwise loosely referred to as ‘cost-benefit analysis’. Its typical components are Summary Description, Objective/goals, Benefits (Qualitative&Quantitative justification), Cost profile, Alternatives, Financial analysis, Funding, Critical Success factors and Recommendation(s).
a. Qualitative justification of the benefits of technology acquisition
We must be able to show through anecdotal information and research that acquiring this technology would lead to any or some of the following effects:productivity improvement, shorter processing time, more ease/convenience, increase in image/reputation, increase in competitive position or further competitive differentiation, cost saving, improved data quality, employee morale booster, customer satisfaction, etc.
In addition we should sufficiently show: HR has the competence to contribute/oversee, and that project management knowledge exists in-house, conduct a peer analysis, determine what can be lost from non-action, and also show how it aligns with corporate strategy and organisational culture.
b. Quantitative justification
As much as you can you need to also show through the use of data that this investment adds up. Some of the computations we could make are: Return on Investment (ROI), Payback period, Cost of no-action, Amortized cost, Source of Funding, Industry comparism and Cost savings. Please it isn’t always that we can calculate any or all of this and we don’t need to.
- Return on Investment (ROI) – a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment and the result is expressed as a percentage or a ratio.
- Cost Savings – we can also show the return on investments by showing the amount that would be saved from the introduction of the technology. Egi could justify the purchase of interactive web-based recruiting application by showing savings realised from discontinuing newspapers advertisement or the use of recruitment agencies.
- Payback period – number of months before the benefits match the costs and/or the length of time required to recover the cost of an investment.
- Cost of non-action vs cost of technology acquisition – compute and compare the cost of staying action against the cost of acquiring the software.
- Amortized cost vs Purchase cost–when cars are bought they are considered capital expense and only the depreciated value is carried on the current year’s P&L. So should be the case with an IT application that would be used for the next few years. It therefore means that we shouldn’t let them scare us that we want the organisation to spend that much since we know that only a small fraction would affect our books that year. What is good for the goose is good for the gander.
- Industry comparism – if we are getting a deal on this purchase making it a cheaper investment than that of our peers, then we need to highlight it.
- Source of funding – Additional vs ‘Creaming off’? We could show that investment in this technology isn’t an additional one which would shoot up our total budget but that we would cream off money from some other expense lines.
It seems you are now armed to sell the case for the acquisition of that people management application. Last thing is to commit all into God’s hands and pray for favour. Best wishes in your quest to inject possibilities into people management through the thoughtful use of technology. I say that when technology meets HR, magic happens.