HRnetSource | Justification for an HRIS

Justification for an HRIS

To management, an purchasing an HRIS may seem like a costly investment. Here are possible ways you can show management why it's worth every penny:

Cost Avoidance - eliminate future spending

Avoid or minimize costs associated with recruiting-succession planning/applicant tracking
Legislative compliance- failure to comply (fines, contract losses)
Reduction of benefit administration fees
Avoid/postpone staff increases, overtime and temporary employee costs
Eliminate duplication of work (staff lists, organizational charts)-central source
Reduction in turnover/training costs-increased morale of staff
Improve the performance of a measured activity and reduce time and cost required to complete an activity

Value Added - qualify (rather than quantify) the benefits gained from the HRIS

Data for senior management for better decision-making
Perform "What If" modeling- forecasting ability
Better employee communications, better productivity
Streamline HR transactional tasks and free-up time for more important employee issues
Faster access to meaningful information that was not available in the past
Competitive advantage in being able to hire the best, and retain the best employees

The most important thing to consider when developing your cost justification is to relate the justification to the business strategy or mission.

"A proposal that is founded on the needs of the business will have a better chance of being funded than one that simply focuses on technical requirements. This is also one of the first places to begin gathering critical management support. Demonstrating an understanding of the business needs and how the HR function fits into the larger picture of the organization will help gain support and, most importantly, lead to a system that provides the maximum pay offs to the company."

Core Points to Stress

Identify the key role of the HR function and what will be required in the future
List the reasons to automate
Discuss success stories of other organizations (competitors)
Identify the tools- either manual or computerized, currently available
Describe the future resources needed to perform HR functions
Outline a 3 to 5 year project plan
Discuss requirements for connectivity to other hardware systems in the company (eg. payroll, accounting)
Discuss and demonstrate how HRIS integrates into the corporate plan
Quantify benefits including intangibles- remember senior management is distant from HRIS functions
Do not focus on record keeping or administration, look at human asset management and bottom-line contributions