Demonstrate the effectiveness of a proposed HRIS to your Financial Director and you will have a better chance of getting it.
The process of selecting a new HRIS for your organisation is a very daunting task. However, the whole process can be made a lot smoother through some careful pre-planning, a properly planned document needs analysis and then of course securing the relevant budget for the entire project. And this is usually where HR comes unstuck. Usually the planning and needs analysis steps of the process are easily completed as they are within HR’s control, but going to the board with cap in hand for funds is often where the wheels seem to fall off.
One of the major causes of this can be the bigger organisation not being fully informed on the benefits the right HRIS can bring to the organisation and, if properly implemented, the return on investment that can actually be achieved.
Probably the simplest example of how the costs for the proposed new HR solution can be put to the relevant authorising body could be as follows:
Electronic pay slips
Current printing and distribution costs for payslips on a monthly basis is, say, R15,000; and
By implementing an HR system with full self-service functionality, this cost could be eliminated as employees would have access to their pay slip information either through the self-service portal or via their smartphone.
Projected savings for this single function would be R180,000 per annum.
Electronic leave form
Based on our historical averages, the HR team currently processes in the region of 5,000 leave forms per annum; and
By analysing the time taken and the hours worked, it has been calculated that the cost for our manual leave forms to be processed is in the region of R18,75 per form.
Projected savings for this single function would be R93,750 per annum.
By just using two of the most basic functions of an HRIS that utilises web-based functionality, the organisation could already be saving R273,750 per annum.
Now when you start looking at the full scope of a new HRIS which covers all areas of HR functionality, as per the list below, the project savings could be astronomically higher.
Consider possible savings in:
– Employee and payroll administration;
– The full scope of talent and performance management;
– Recruitment – managing an external pool of talent;
– Learning and development;
– Organisation structure and design; and
– Management of processes from hire to retire.
What we have seen over the past number of years is that the expectations of an HRIS have evolved from being just an electronic file keeping system to a system that is also required to perform primarily in a Decision Support role, with functionality not only focused on the HR and payroll departments but for the Executive Team, Line Management and the entire employee complement as well.
I say this in all honesty: if the system is going to be aimed at various people within the organisation and not only at the core HR and payroll teams, then best the system creates some excitement around the outputs it is able to deliver. Imagine, if you can, a situation where your employees showed the same passion and urgency in completing their annual performance reviews or updating their Job Profiles, as they show in those highly animated reactions when they receive their payslip with an error!
Taking all of this into consideration, the battle in the boardroom for getting support for additional expenditure for a new HR system should become a lot easier when the full picture is presented. In fact, those managers and executives who still see no value in true HR management being conducted by an organisation with the proper tools are probably a bigger threat than either the budgeted expenditure for the new system or, in fact, the so called value they bring to it.
However, it must also be said that in the past the challenge has been to get the HR department to fully utilise all of the functionality a new system will bring. More often than not, the current system is not even being used to its full capacity, and this helps create the negative impression that the proposal for getting a new system is not based on a true business requirement, but rather on some whim.
In conclusion, most HR teams could probably do with a technology upgrade, and a key point to consider when initiating this project is to ensure that all of the relevant stakeholders are properly and fully informed of the positive financial impact as well as those benefits the new HRIS will bring to the organisation.
Rob Bothma is an HR Systems Industry Specialist at NGA Africa, a non-executive director, Fellow and Vice President of the Institute of People Management and co-author of the 4th Edition of Contemporary Issues in HRM and member of the Executive Board for HR Pulse.
This article appeared in the June 2015 issue of HR Future magazine.