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Convincing the CEO That It's Time to Buy

Decision-makers are increasingly focused on value: determining how to link major IT spending to strategic goals, tangible gains in productivity, and concrete business benefits.

September 18, 2003
Related Topics: Human Resources Management Systems (HRMS/HRIS)

Tthere’s no way around it. Your legacy HR system must be replaced. Maybe youdon’t have the tools to generate complex reports. Or the database has maxedout and can’t handle even one more record. Perhaps your business is goingglobal, but your system can’t accommodate international currency. And no amount of tweaking or training can bring the antiquated software upto speed.

Now, if only you could convince your CEO and CFO to pony up the cash. Hereare some tips.

Give Them Their Money’s Worth 
Your best bet is to prove thevalue--that is, the return on investment--ofa new system. According to a recent survey sponsored by Dell, expected value ofthe investment is the largest determinant of IT spendingapproval, more important than total cost of ownership.

“Given the current economy, value has taken center stage with seniorexecutives,” says Joe Marengi, senior vice president, Dell Americas. “Whilemany businesses have been focused on the cost of technology, it’s clear thatbusinesses are also looking for a better way to measurethe total value derived from technology expenditures.”

“Decision-makers are increasingly focused on value: determining how to linkmajor IT spending to strategic goals, tangible gains in productivity, andconcrete business benefits,” says Tom Pisello, author of Return on Investmentfor Information Technology Providers: Using ROI as a Selling and Management Tool(Information Economics Press, 2002) and founder of Alinean, a developer of ROItools.

Tie Technology to the Enterprise
Before upgrading, “do a fit-gap analysis,” says Scott Busby, chiefinformation officer for AdvanTech Solutions, a Tampa,Florida-based HR outsourcing firm. “Sit down and assess the core elements ofthe business model. Can you live with the gaps in your technology?” The answeris no, he says, if they get in the way of the strategic initiatives of yourbusiness.

“When folks champion technology-related projects, they focus too much onthe technical details,” Busby says. “Instead, frame the upgrade in thecontext of the organization’s business, financial, andtechnical strategic goals.”

Share the Wealth
Here’s one way to prove the HRMS value to the enterprise as a whole: offeraccess to data. “As HR functions strive to prove their strategic worth intoday’s economy, they must coordinate budgets and activities throughout thecompany,” says Lisa Smith, a senior associate with the research and consultingfirm Best Practices, LLC. “World-class organizations focus on distributinglimited resources into critical areas that generate proven returns.”

For example, the HR department at NerveWire, a Boston management consultingfirm, provides information to line managers that ties performance data andcompetency development to the company’s investment in training.

“If you can show that HR is a mission-critical application, that will go along way in solving cost-constraint issues,” says Russ Campanello, NerveWire’ssenior vice president and chief people officer.

“You cannot separate HR technology from business strategy,” Campanelloadds. “Your processes must support the business strategy, and the technologymust support the processes. So understand the strategybefore you start looking at technology, and evaluate yourneeds against those requirements. The smarter you are about how HR technologyfits in with the business strategy, the more you are an equal member at thetable.”

Workforce, September 2002, p. 40 -- Subscribe Now!

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