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Justifying an HCM and Payroll Purchase

Learn how technology has transformed HCM and the steps to justify a new HCM purchase. Gain helpful resources and tools for value assessment, research, and ROI calculation.

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Justifying an HCM and Payroll Purchase

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  1. Justifying an HCM and Payroll Purchase Pat Palmer, PDS President and CEO

  2. Today’s Presentation Topics How Technology Has Transformed HCM Steps on Your Path to Justifying a New HCM Helpful Resources

  3. Transformation: Administration to Productivity Figure 1: How the HR Software Market Has Evolved

  4. Path to Justification • ValueGaining management approval • AssessmentIdentifying areas of improvement needed • ResearchResearching available products • ROICalculating Return on Investment (ROI)

  5. Path to Justification • Value • Assessment • Research • ROI

  6. Path to Justification • Value • Assessment • Research • ROI

  7. Create Value: Gaining Management Approval Defining your budget • Gather financial & support history of current tools • Clarify the project scope • Assess your level of service needs • Estimate range of spending required • Calculate ROI • Value

  8. Gaining Management Approval Pitch products from their perspective • Identify the specific products and solutions needed • Schedule meetings @ C-level to uncover specific issues • Quantify your assumptions • Gather “hard dollars” and “soft benefits” • Reference industry resources where possible • Value

  9. Gaining Management Approval Laying the Groundwork • Collaborate with senior levels of management • Assess timing • Exercise patience • Use business cases to prove your point • Prepare for hard questions • Value

  10. Path to Justification • Value • Assessment • Research • ROI • Assessment

  11. Clarify Areas for Improvement • Assessment

  12. Compliance • Assessment

  13. Deliver the SolutionWhere Your Staff Needs It MOBILE DESKTOP TABLET

  14. Defining Business Requirements • Define resources and build a cross-department team • Internal checklist or formal requirements (RFI or RFP) • Clarify your process of gathering stakeholder requirements • Create a checklist that identifies needs and priorities • Assessment

  15. Defining Business Requirements Manage your vendor process • Communications • Presentations • Content and format of product demonstrations Identify search project timeline • Internal & external • Assessment

  16. Sample Vendor Search Project Timeline • Assessment

  17. Path to Justification • Value • Assessment • Research • ROI

  18. Research: Researching Available Products • Guides • Professional websites • Industry consultants • Tradeshows and Conferences • Portals • Research

  19. Tradeshows & Conferences • Targeted Shows • Industry-specific • Product-specific (e.g. Recruiting) • National Shows • Broader view of technology • Network outside of your community • Regional Shows • More affordable • Research

  20. Suggested Industry Search Portals • Research

  21. Path to Justification • Value • Assessment • Research • ROI

  22. ROI: Four Ways to Justify HCM ROI 1 Hard Dollars vs. Soft Dollars 2 Tactical and Strategic Benefits 3 Areas of RiskReduction Headcount Avoidance 4 • ROI

  23. “Hard” Dollars “Soft” Dollars 24/7 system access Redundant data elimination Improved data integrity Process standardization Improved data controls 1 “Hard” Dollars vs. “Soft” Dollars • Product cost • Software maintenance • Software add-ons • Third-party administrator fees • Technical support costs • ROI

  24. ReduceJob vacancy costs, Absenteeism, Hiring costs ImproveEmployee retention rates, Decision-making, Budget vs. Actual reporting, Employee communications TACTICAL STRATEGIC 2 Tactical and Strategic Benefits AutomateBenefits enrollment, Training registration, Job postings ReduceForms processing, Payroll adjustments, Overpayments, Claims ImproveService to employees, Security, Staffing, Reporting • ROI

  25. 2 Onboarding Scenario 20 Hiring Managers 10 hours per week 52 weeks $374,400 Saved Each Year • ROI

  26. 2 Reports Scenario 1 HR Admin @$15/hour 4 hours per quarter 4 quarters $240 Saved Each Year CompareHRIS.com • ROI

  27. 2 2 Efficiencies Gained Through Automation • ROI

  28. Savings by Process 2 Savings by Department & Process Savings by Department • ROI

  29. Areas of Risk Reduction 3 Risk areas to be explored: • Government Compliance • Technology • Employee Litigation • ROI

  30. Headcount Avoidance 4 • ROI

  31. Resources for Justifying an HCM Payroll Purchase PDS Whitepaper:“Four Ways To Justify an HCM and Payroll Purchase” PDS Calculator:Return On Investment Calculator PDS checklist of sample business requirements: Sample Business Requirements

  32. References • Josh Bersin, Deloitte Consulting LLP – figure 1: Transformation • The annual Sierra-Cedar HR Systems Survey • PDS whitepaper – Four Ways To Justify an HCM and Payroll Purchase • Sierra-Cedar – ROI calculator input • CompareHRIS.com – Reporting ROI scenario within “Justifying the Cost of a New HRIS or HCMS”

  33. Let us put at the center. www.pdssoftware.com

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