Make A Value-Based Case For Change: 4 Benefit Areas

Russell Porter

This is a three-part series focused on building a value-based case for change in organisations undertaking transformation initiatives. While specifically targeting HR transformations, these concepts can be applied to projects in any function.

Part 1 explored the common pitfalls in traditional business cases, discussed the value-based business case, and highlighted the four key elements to a great value story.

Part 2  discussed the six key steps to constructing a value case that will increase the chance of securing funding approval and reduce the likelihood of a failed project.

In this third and final post, we’ll dive deeper into the value-based business case and explore the four benefit areas for demonstrating a case for change.

Often organisations limit the conversation around project benefits to focus on cost savings and productivity improvements. Sometimes projects never get off the ground because the organisation accounts only for short-term “bankable” benefits rather than the broader long-term strategic advantages.

Our philosophy at SAP SuccessFactors is to broaden the scope of benefits in a case for change to include these four areas:

  1. Strategy enablement – How will this project enable the organisation’s strategic goals and commitments to stakeholders and/or the market? This is where a deep understanding of the business strategy is required. As highlighted in Part 2, it is much easier to gain buy-in from stakeholders and decision makers (and therefore commitment of funds and resources) if you take time to understand their current challenges and their objectives and use this information to position the strategic benefits of the transformation to other parts of the business.
  1. Innovation – Beyond simply removing manual workarounds and administrative tasks, how will this project encourage an innovative culture, foster agility, and enable working smarter? For example, SAP SuccessFactors customers commonly cite the ability to enhance real-time decision-making and collaboration across functions as an intangible benefit of their transformation. Another example is the ability to embrace consumer-grade technologies in the workplace as an employer of choice for tech-savvy generations.
  1. Risk and compliance – How will this project mitigate risk? This is a hot topic for senior executives and boards. Benefits could include reduced workplace safety risks through better tracking and auditing of training efforts, or it could mitigate broader workforce risks by identifying skills gaps by location or predicting the loss of high potentials. For some organisations, it’s simply a matter of knowing how many permanent and contract staff are employed, by whom, and where.
  1. Measurable benefit – What are the quantifiable, financial benefits that meet return-on-investment hurdles? Every organisation has its own approval processes – consulting with finance early in the process will help to understand these requirements, build a stronger case with appropriate metrics (e.g. IRR, NPV), and reduce the likelihood of being knocked back for weak financial evidence. It’s also important for HR and IT to work together to understand the current cost of any existing systems that will be replaced, which can offset the cost of a new investment.

When it comes to quantifying benefits, we use our benchmarking database and business case tools to help customers understand the potential benefits of an integrated HR solution to their organisation. Modern HR solutions have harder-to-quantify benefits like reducing employee frustration and turnover, or access to higher-quality learning content. While not a traditional “bankable” benefit, we have ways of quantifying these benefits, and they should be included in the value case as important enhancers of productivity, efficiency, and workforce engagement.

The relative importance of each benefit area will vary project to project, but every value case should be able to address each of these four areas in some way. Focusing on only one or two is unlikely to win over a cross-functional steering committee/approval board.

Experience shows that the time invested upfront to build a strong value case, with the key elements outlined above, will greatly increase chances of project approval and will lay a solid foundation for successful project execution and value realisation.

Read the first two posts in this series:

Russell Porter

About Russell Porter

Russell Porter is part of the Business Transformation Advisory team with SAP SuccessFactors. He partners with HR and business leaders to help them identify, deliver and realise the value of innovative cloud-based Human Resources solutions – so that organisations can optimise their workforce and achieve their strategic business objectives. Based in Sydney, he provides industry thought leadership, strategic solution advice and expert consultation across the Asia Pacific region.