How To Write A Business Case For A New HR System

No expense in the business world comes without prior justification and due consideration. Before investing in any project or activity, executives must analyze its financial and non-financial aspects, weigh the potential risks and benefits, and determine whether it is worth pursuing. Business cases provide the means for this type of decision-making, offering executives a structured framework for evaluating the viability of proposed projects.

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What Is a Business Case?

A business case is a document used to justify the implementation of a proposed project or activity based on its expected financial and non-financial benefits. It often outlines the costs, risks, and potential advantages of the proposal, as well as a potential timeline for its adoption and completion. Business cases help executives evaluate whether or not a proposed project is worth pursuing and whether it has the potential to deliver organizational value.

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What Does a Business Case Include?

When it comes to making new investments, company decision-makers usually want answers on three things: time, people and money. All three have the potential to impact the organization's future success, and as such, need to be addressed. Business cases aim to make compelling arguments that their solutions will improve each of these factors in the long run.

They explain how adopting a new change could affect the organization, revealing if it will provide a return on investment (ROI) and how long that might take. Business cases consider all of the possible risks, pitfalls and opportunities that could arise from this change. The information included in a business case is intended to provide decision-makers with enough evidence to make informed choices about their organization’s future.

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The Elements of an HR Business Case

Of course, the composition of a business case can vary depending on the sector and organization type in which it's used. Some settings, such as project-oriented organizations, might prefer to use a more formalized and structured business case format. In other settings, such as startups or family businesses, the business case might be more informal and less structured.

Human Resources departments generally follow a more formalized business case format to justify the implementation of HR initiatives and projects.

This consists of the following:

Problem Statement

An opening statement that briefly outlines the business problem that needs to be addressed.

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Objectives

What the business case aims to achieve, and how this will benefit the organization.

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Current HR Processes

An explanation of the organization's current approach and how it works, along with any problems or challenges it faces. There should also be an explanation of how the proposed solution could improve this process and how its changes would affect those involved.

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Alternatives

A list of alternative solutions to the problem and why they are inferior to the proposed solution. This should include an outline of the basic requirements for each, an estimation of project risks (costs, ramp-up time, training expenses and project delays).

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Additional Considerations

A list of any additional factors that need to be taken into account when assessing the potential success of the project.

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Action Plan

A proposal of both short-term and long-term next steps and major milestones, along with KPIs to track progress and measure success.

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Executive Summary

A short summary of the entire business case, which should include an outline of the problem, proposed solution and expected results. This is designed to give executives a quick overview of the business case without needing to read through all sections in detail.

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How To Build a Compelling Business Case for a New HR System

HR systems and software are a newer type of business investment, and not all upper-level executives recognize the value they can offer. Business cases give these executives a better understanding of how investing in an HR system can benefit their organization.

When crafting a business case for an HR system, HR professionals should focus on the following key points:

Quantifiable Benefits

The business case should clearly explain how the new system will benefit the organization with quantifiable metrics. For Human Resources in particular, this could be a decrease in staff turnover or an increase in employee experience, productivity and engagement.

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ROI Analysis

Explain the value of investing in an HR system in numbers and demonstrate the expected return on investment. Show stakeholders exactly what they're paying for and justify why the proposed HR solution's benefits outweigh that cost.

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Compliance

Explain what's at stake - the need to comply with industry regulations, labor laws, and other relevant legislation - and how an HR system can help the organization stay on top of compliance.

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System Requirements

Outline the system requirements and what features are needed to meet the organization's current and future HR needs.

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Cost Implications

Analyze various pricing options and analyze the total cost of implementing and maintaining the HR system, as well as any potential upgrades or additional features.

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Risk Mitigation

Discuss the risks associated with implementing a new HR system and how they can be minimized.

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User Adoption

Outline how the HR system will be rolled out, what training and support resources are available, and any other measures that will help ensure user adoption.

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Vendor Selection

Compare different vendors and products, and identify the best option for the organization's needs.

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Sample Business Case Template

Problem Statement

Objectives

- Objective 1

- Objective 2

- Objective 3

- etc.

Current Processes

Alternatives

- Alternative 1: Description and limitations

- Alternative 2: Description and limitations

- Alternative 3: Description and limitations

- etc.

Additional Considerations

- Consideration 1

- Consideration 2

- Consideration 3

- etc.

Action Plan

- Milestone 1: Description and timeline

- Milestone 2: Description and timeline

- Milestone 3: Description and timeline

- etc.

Executive Summary

A concise overview of the business case and expected results.

By clearly outlining the benefits of an HR system - both tangible and intangible - a compelling business case can help team leaders, executives, and stakeholders understand the value of investing in an HR system. Qualee's expansive suite of features and capabilities are an easy sell to begin with, making it a great starting point for building an effective business case. Schedule your demo today to learn more!