4 steps to building a business case for new HR software

We know from research reported on Businesswire that before the pandemic around 20 percent of companies worldwide were using some form of cloud-based HR Software as a Service (SaaS), platform.

As you would expect, given the unique pressures of the pandemic by the end of 2021 this figure had grown significantly to a 47% uptake of cloud-based HR SaaS, and unsurprisingly is expected to increase to nearly 60% in 2023.

This points to a lot of HR software buying activity, which means many of you HR professionals will be building HR software business cases.  Launching a business case for new HR software at a time when budgets are squeezed requires a robust approach, so here are some tips on how to do that.

1. Identify HR pain points to build impetus from the start.

One of the best ways to create initial impetus around your business case for HR SaaS is to identify pain points. Get all your key stakeholders and management team on a call and invite them to tell you their HR process pain points, which may be things like:

• Finance teams are frustrated with having to spend excessive time manually inputting HR data.
• HR teams spend too much time manually preparing reports.
• Line managers spend excessive amounts of time processing holiday and sickness forms.
• Disparate HR systems and spreadsheets making reporting and operational processes chaotic, inefficient, and stressful.
• Lack of workforce visibility and metrics to support critical decisions leading to a lot of guesswork.
• Overwhelmed by recruitment demands with CV sifting, interview scheduling, and communications performed in a tedious and labour-intensive way.
• Employee appraisal process is tedious and labour-intensive and employees are not engaged with it.
• HR systems are not accessible from mobile or outside the office or from overseas making interaction with HR cumbersome.

To build on this impetus and maintain momentum, agree on a date within 2 to 4 weeks to come back to the stakeholders with the ‘answers to their prayers’, e.g. your solid business case.

2. Convert pain points to coherent business needs/requirements.

You are now in a position to start building your business case. Start by addressing each stakeholder’s pain points and converting this to a coherent need that can be remedied, for example:

‘Finance teams are frustrated with having to spend time excessive time manually inputting HR data which is slowing down monthly reporting.’

becomes,

Need an HR system that formally integrates with existing payroll and finance reporting software for seamless data transfer.’

Or,

‘Line managers are frustrated at spending too much time spent processing holiday and sickness forms.’,

Becomes,

Need a browser and mobile-accessible HR system that automates holiday and sickness notifications and recording.

At the end of this process, you’ll have created a list of HR software requirements which, when delivered within your HR SaaS will satisfy or even delight stakeholders by addressing their pain points. Why not take a quick moment to find out if Sense’s HR software satisfies your criteria?

3. Financially quantify the ROI

Now that the stakeholder’s pain points have been addressed, they will most likely lobby in favour of your proposal. But they may not be the actual decision-makers.

To get the budget-holding inner circle to loosen the purse strings you’ll need to build a financially irresistible case that they simply can’t say no to.

This will involve building a very credible ROI figure by quantifying the financial saving made to the business when it is resolved with HR SaaS. For example, an examination of time-sheet data might show the exact time being spent on manually inputting HR data and therefore how much time/money will be saved if it is automated using HR SaaS. This kind of forensic clarity will be essential to winning over budget holders, especially in the current economic climate.

By the end of this process, you should have a compelling annual saving figure by using HR SaaS which may even offset the cost of new HR SaaS!

4. Presenting your case

In terms of pitching your business case, know your audience. For example, some stakeholders may want a PowerPoint, others may want a summary, and others (finance probably) may want an excel sheet they can play with. C-level execs are often influenced by external benchmarks: if you can show your competition is using HR SaaS, they may be more inclined to follow suit.

Prepare for pitfalls and detractors. If you know one manager will do their Peter Jones Dragon’s Den impression and grill you for numbers, be ready! IT leaders will be interested in security and implementation requirements, so perhaps have a relevant link ready for them. The more legally minded will be interested in contracts so ensure you know the HR SaaS terms and conditions, or again, have a relevant link handy.

With a strong ROI-based proposal and a pitch that focuses on the pain points and motivators of specific stakeholders, you will have every chance of securing the budget you need.

In the current climate where business budgets are being pressurised by the cost-of-living crisis, reduced consumer demand, and inflation, prudent business owners are actually looking for efficiency gains. Therefore, your leaders should welcome well-constructed HR SaaS business cases that promise to deliver game-changing efficiency and capability gains.