Investing in HCM Technology for People Management Success

April 8, 2015 Marlo Hertling

Investing in HCM Technology for People Management Success

It's not an uncommon practice that once a company implements a Human Capital Management (HCM) solution, they simply budget annually to pay the monthly or yearly fees. I would like to share with you why it's worthwhile to set aside some additional budget to continue investing in your HCM solution each year. Your HCM solution provider is more than just a vendor, they're a partner.

Investing in your people management is more than just software licensing and support fees.

I’ll start by sharing a scenario with you that I have seen many times in my career in HCM technology.

A company purchased and installed their people management solution several years ago. Over time they experienced employee turnover in members of their Payroll and HR teams. The new people got some basic training on the solution from their predecessor but essentially inherit the original configuration of the solution.

In that time their HCM solution partner has added new features and functionality to the software but no budget was ever set aside to implement these new features or provide a Business Process Overview.

So the solution continues to be used as it was originally implemented, and the company misses out on some significant savings that could be realized from the new features by streamlining existing processes and automating even more manual tasks.

DON'T JUST SET IT AND FORGET IT

Technology today is built to adapt and improve processes for end users, but to keep up you need to be prepared to continue to invest in it. I hope this post will help you understand that an ongoing investment in your HCM solution ensures you, and your organization, are getting the most out of it.

To get the conversation started in your organization, here are some of the triggers that we find help our clients identify times where we can help:

  1. Significant growth or acquisitions for the organization
  2. Significant changes in collective bargaining agreements
  3. New or additional reporting requirements
  4. When looking to save time, increase productivity, and/or streamline processes

GET THE STAKEHOLDERS TOGETHER ONCE A YEAR

In addition to these triggers, I recommend planning for an internal meeting with all of your stakeholders once a year (this includes Payroll, HR, Finance, and Management) to see what tasks they are finding time consuming or what would help them be more effective.

Knowing what areas your company would benefit from then allows you to collaborate with your HCM solution partner to scope out how they can help you and if there is a cost involved.

People Management Success is All About Teamwork

Once your HCM solution partner understands your needs they can often offer services to help like:

  1. Provide a Business Process Overview on a specific process or your full solution.
  2. Build reports, generate notifications, automate document sign-off, etc.
  3. Additional software to help with time collection, HR process workflows, etc.

The good news is that often many of these services are not a huge investment … Sometimes it can be as simple as budgeting for creating some workflows or the automation of a calculation or form that would otherwise take up valuable time.

HOW TO MEASURE ROI

Here are a few ways to determine if your investment will pay for itself:

  1. Establish how many people are involved in completing the task.
  2. Ask each person involved how much time they currently spend on the task.
  3. Calculate the overall cost of the task.
  4. Compare the cost to how much you would invest with your vendor to automate the task.

Let’s take a look at a typical example to demonstrate the ROI calculation:

The Scenario
Once a year, all employees are required to review and sign off on 2 company policy documents:

  1. HR must provide the new policy documents to IT to update in your company SharePoint portal.
  2. It takes IT about 2 hours to load and test the new documents on SharePoint (2 hours x $40/hr in wages = $80).
  3. HR must then paste the link from SharePoint into an email, with relevant text asking employees to read it and electronically sign the acknowledgement form. This takes HR about half a day to prepare and send out (3 hours x $40/hr in wages = $120).
  4. HR must then go through their inbox to see who has returned the acknowledgement forms, and for those that haven't, they need to re-send reminders and then eventually follow-up with phone calls. This takes about 40 hours (40 hours x $40/hr in wages = $1,600).
  5. Employees must read the forms, print the sign-off sheet, sign it, scan it and email it back to HR. Completing, scanning and emailing the forms takes each employee about 6 minutes (450 employees is 45 hours x an average wage of $18/hr = $810).

The total time invested in policy document sign-off is 85 hours at a total cost of $2,610. If you could work with your vendor to automate this process by posting the document in your Employee Self-Service portal and provide electronic signatures for $1,750 (for example) you would realize significant savings and would know that your investment has paid for itself within the first year.

In Conclusion

Planning ongoing investments in your HCM solution ensures that you keep up with changes in technology and continue to provide business improvements for your people management team.

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About the Author

Marlo Hertling

Marlo Hertling has worked with leading HCM organizations and has been helping Canadian companies implement HCM solutions for more than 15 years. She is the Vice President of People & Culture at Avanti Software Inc and serves as Avanti's HCM subject matter expert.

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