My last blog, The Evolution of HR and the Missing Link?, proposed that technology is key to enabling the HR function to move from transactional processor to strategic advisor, but making a business case for any HR tech is often seen as a barrier to implementation. So how do you go about making a business case for digital HR transformation?
Based on personal and shared experiences with our customers, successful digital HR transformation business cases share some common characteristics.
Successful digital HR transformation business cases are business-led, focusing on the business value of the technology and clearly demonstrating a concrete list of the benefits a digital HR workplace can provide in line with the company’s overall strategic business objectives.
Onboarding new employees, for example, can generally be one of the most manual, time-consuming and repetitive tasks. Using technology, we can simplify and scale the onboarding process by making it repeatable, which would be crucial to supporting a company’s growth strategy.
Today, we see our customers investigating more advanced scenarios such as building an integrated “employee experience platform” leveraging machine learning, chatbots, apps, and other advanced technologies to empower employees and support their ongoing needs, as well as aiding company objectives of employee satisfaction and retention. IRT, a community-owned care provider for seniors, used the technology to enhance employee empowerment and accountability and support building a culture of customer-centricity and innovation across the organization.
This leads us to the next point: Digital HR transformation isn’t just about HR. According to Deloitte’s 2017 Human Capital Trends report, “It’s about HR teams taking up the dual challenge of transforming HR operations on the one hand, and transforming the workforce and the way work is done on the other.”
It’s therefore not surprising that successful digital HR transformation business cases include input from other departments across the organization, including IT and other technical teams and often compliance and finance. John Holland, a leading integrated infrastructure and property company, is a good example of this. Peter Howell, group general manager organizational development, suggested that the importance of working within a bigger mandate for digital transformation was the “biggest pearl of wisdom” he could offer following the company’s successful implementation of a digital HR solution.
A business-led business case naturally includes a problem definition and quantification of the impact, which is necessary for demonstrating tangible ROI over time. The problem definition is an honest analysis of the processes today, warts and all. Quantification in HR has traditionally been focused on lost opportunity costs, which are difficult to accurately quantify. Consider, for example, the digitization of a leave request: “How much more productive would managers be if they approved leave requests from their mobile device?”
Today, measurable HR indicators like onboarding costs and turnover rates, both pre- and -post implementation, are critical to calculating the tangible investment returns over time that management requires, and to support an ongoing digital HR transformation strategy that future-proofs the business.
For example, Amy Grubb, CEO of Cloud Consulting Partners, explains how a company with 10,000 employees developed a business case by showing how the cloud would lower the cost of turnover, which represented 10 percent of the annual payroll. HR, IT and finance worked together to explicitly demonstrate that by reducing turnover five percent, they could save the company four million dollars in annual turnover costs.
Of course, management buy-in is crucial to the approval of any business case. As evidenced by both John Holland and IRT, demonstrating how the digital HR transformation is aligned to the broader business plans made it easier to get C-Suite buy-in. Additionally, including leaders across the organization at the early stages will give them insight into the vision and perhaps ratify the decision-making process.
Finally developing a technology road map and a roll-out strategy and communicating exactly what will be delivered, why, and when, including how a digital transformation project will affect people in the business (aka good old change management) may be last pieces of the puzzle required to secure management approval for your digital HR transformation business case.
For more on HR technology, see Artificial Intelligence Enables Humanity In Human Resources.