Employees Vs. Employers

New Workforce Offerings

HR TECHNOLOGY SAVES MONEY <

Perfect Storm strikes CEO's

FAQs

"Over the past several years, companies invested in HR systems and Web-based technologies to support growth and help transform HR into a more strategic role in the organization," says Mike Esposito, a senior consultant with Watson Wyatt. "Now, employers are under pressure to control HR costs and optimize the investments they've already made" in technology. According to Esposito, investments in technology can reduce operational expenses by:

• reducing HR operations costs by automating key HR business processes.
• increasing error detection and reducing data correction costs by improving the accuracy of HR information.
• eliminating costs associated with printing and disseminating information to employees by providing online collaboration with colleagues and Web access to electronic documents and data.
• achieving greater economies of scale through employee and manager self-service
• optimizing existing investments by increasing integration and eliminating duplication.

"During the race to the Internet, many organizations came to view any technology solution, at any price, as the right solution," notes Esposito. "Unfortunately, many lacked a sound return on investment analysis as part of their decision making. Now, current economic conditions are forcing companies to refocus attention on the need to make a cost-conscious and financially sound business case for their eHR initiatives."

Esposito has identified six key considerations in developing a business case for techonology:

1. Understand and leverage the link between technology and the business strategy. HR services and systems must be viewed in the context of helping achieve business objectives.
2. Quantify the current cost of delivering HR services. You must understand where you are today before you can identify cost-control opportunities and project anticipated cost savings.
3. Define how technology will change the delivery of HR services. Establish a vision and articulate what the vision will mean in terms of people, process, and technology.
4. Work closely with your finance organization to develop required analysis. Include a combination of measures such as net present value, rate of return, and payback period.
5. Establish measures/targets to maintain focus and assess progress. Get results by concentrating on cost reduction, improved transaction accuracy, or improved service delivery, and measure against that focus.
6. Presell your business case to executive team members. Educate key decision makers along the way so they are on board when it's time to ask for funding.

"HR leadership must be prepared to offer human capital solutions that will create value for their organizations," says Esposito. "Periods of economic downturn add to this challenge by demanding rigor in identifying and justifying the right solutions within a cost-focused business environment."