Writing a business case for HR and payroll software investment

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Convincing management to invest in new HR and payroll software doesn’t have to be an onerous process. Get your proposal right, and the need will be clear.

Once you’ve decided that it’s time for an HR and payroll system upgrade, your next job is to convince your business directors to invest in what they might see as a complex and potentially risky initiative.

Unfortunately HR traditionally has a bad reputation when it comes to making hard business cases. So how do you create a watertight business case, carefully tailored to the stakeholders you need to convince, with justifications, considerations and bottom-line business benefits?  

First, who is your audience? Let’s say you’re pitching to board comprising of a CEO, CFO, commercial director and marketing director. Your first job is to understand their shared and individual objectives, how the current situation is detrimental to these, and how the solution will alleviate the issue.

Tailoring your message

The board will have some understanding of the business problem you plan to highlight, so assess their awareness and expectations around the issues.

In general terms, CFOs will want evidence of bottom-line return on the investment - not in six months, but immediately.

Your marketing and commercial directors may be swayed by the promise of increased productivity and effectiveness among their sales and marketing teams.

A CEO wants to know how the initiative is going to tangibly improve business performance in relation to the explicit goals of the organisation, its culture and employer brand, as well as its growth objectives.

How to structure your case

Every leadership team has its preferred proposal format, its unique characters and idiosyncrasies, but in 99.9% of businesses, a successful business case will cover the following points.

  1. What’s the problem?
    This is the hook. What is the business problem? Keep it short, try to make it compelling, but avoid hyperbole.
     
  2. Evaluate current processes
    This is where we explain precisely why the problem exists. List the specific limitations of your current system and how they contribute. Explain the current processes and highlight the pain points.

    Demonstrate inefficiencies and show what they cost the business in time and resources. Use this to allude to the solution in general terms.

    If the data doesn’t exist, ask a representative selection of employees to help you track it, then extrapolate across the business.

  3. State objectives
    Outline the objectives of your proposal in bullet points, but beware - if you’ve got more than ten bullets, you risk diluting the focus of your proposal.
     
  4. The proposal
    How are you going to fix this situation? Describe the solution and the benefits the new system will deliver, ensuring each of the limitations highlighted in the evaluation are addressed.

    How much will it cost and how will this investment be returned? Software vendors will supply ROI stats from previous customer projects and these can be useful.

    For added credibility in front of the board, ask vendors to put you in contact with their customers so you can seek direct feedback on the effectiveness of their implementation.

    How long will it take and what are the additional requirements? Be realistic. What do IT say about the resource required to implement a new system? What will the likely training requirements be to get everyone up to speed on a new system?

    Make sure your metrics are the ones the board want. For instance, your CFO might expect a total cost of ownership calculation as well as an ROI figure. Make friends with someone in finance and find out.

    It’s bottom-line, hard benefits that will best convince most stakeholders, but don’t leave out the softer impacts like staff engagement, user experience and reputation.

    No initiative like this comes free of risks, and a proposal without a discussion of these will lack credibility. Ensure you’re clear and honest about the dangers and show clearly how they can be negated or mitigated.

  5. Alternatives
    Demonstrate that you’ve investigated a number of alternatives. List between three and five options, including the estimated cost, resource requirement, timeline and risk associated with each. Compare them with each other and with your proposed solution.
     
  6. Additional considerations

    Show that you’ve anticipated the impact of a successful implementation. For instance, sudden access to clear metrics like performance, attendance and overtime can come as a shock.

    It often shines a light on what you already know, that current company policies are poorly adhered to. As a result, an HR system upgrade will often mean that people across the organisation have to alter their way of working.

    Whose responsibility will it be to ensure processes and policies are adhered to and what will HR’s role in this process be?

  7. Executive summary

    Very simply, this is a clear summary of the proposal and its justification. Similar to your hook, if a busy director flicks immediately to this page (and it shouldn’t be more than a page), it will convince them that the rest of the document is worth their time.

    Your organisation will have its own style and format. Speak to other departments, try and get an example of a successful internal business cases. Are there particular qualities that successful proposals possess in your organisation?

Once you’ve written your business case, go back and redraft it, removing any jargon, sweeping generalisations or clichéd statements. Seek as much feedback as possible before you take it to the top table.

Want to read more on this topic? Check out How to decide when to make a technology decision and what level to invest in seven simple steps.

About Rachel Mudd

Rachel Matthews

XCD is a single solution HR and Payroll software, designed for organisations with over 250 employees who are experiencing business growth or transformation. XCD keeps all of your data and processes in one place, freeing up your time to add even more value and make human resources work for the business.

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