1

Getting to Yes: Creating a

Business Case for a Talent

Management Suite

Katherine Jones, Ph.D.

Vice President, HCM Technology Research

Bersin by Deloitte

Deloitte Consulting LLP

2

Agenda

Software management issues facing HR today

What research tells us

The value of the single suite

Getting started: Business case planning and preparation

33

Software Issues Facing HR Today

4

The State of the Art:

HCM Software in Use Today

Source: Investments in Human Capital Management Systems 2014. Katherine Jones. Bersin by Deloitte. Spring 2014.

5

Too Much To Manage

“Large” = 25,000+ employees

Source: Investments in Human Capital Management Systems 2014. Katherine Jones. Bersin by Deloitte. Spring 2014.

2012 18%

2013 33%

6

Talent

applications

are aging…

Recruiting

Performance Management

Compensation

Learning

Time & Attendance

Succession

40%

17%

19%

26%

17%

12%

7+ Years Old

Investments in Human Capital Management Systems 2014, Katherine Jones. Bersin by Deloitte. Spring 2014.

77

What

Research

Tells US

8

organizations are considering purchasing new

HR or Talent Management technology in the next

18 months54%

90% replacing the existing solutions used today

Investments in Human Capital Management Systems 2014, Katherine Jones. Bersin by Deloitte. Spring 2014.

9

Strategy Matters:

Business Drivers Push

New Software Choices

10

41% Desire to move to new cloud-based technology/SaaS

Move from disparate local HR

systems to one global system 35%

Desire to consolidate around one

vendor's platform 29%

Investments in Human Capital Management Systems 2014 Katherine Jones. Bersin by Deloitte. Spring 2014.

Addressing Strategy Shifts through

Technology

11

12

Can’t integrate with other systems

60%

Can’t get analytics

53%

Improve user

experience

53%

Source: Investments in Human Capital Management Systems 2014.

Katherine Jones. Bersin by Deloitte. 2014.

Top 3

Drivers

for

Replacing

TM

Software

13

Selection Criteria

Improved analytics

Better User

experience

Integration

Cloud

Source: Deploying HCM Technologies: Making Change Work. Katherine Jones.

Bersin by Deloitte. 2014.

14

“Cloud”

GOAL

Technology

Consolidation

Application

Integration

CRITERIA

User

Experience

Analytics

• Lower cost software

contractual

arrangements

• More rapid response

to changing labor

markets

• Improved employee

relationship

management

• Enhanced scalability

via SaaS

• .

BUSINESS OUTCOMES

1515

Preparing the

Business Case

16

Why Buy New Software?

Solve a Business Problem

• Lower operating costs

• Improve employee productivity

Pursue a Business Opportunity

• Increase production

• Open new marketsGain a

Competitive

Edge

17

Five Steps for Developing a Business Case for a

Talent Management Suite

18

Your business case will have a much great likelihood of

success if you have an executive sponsor or supporter.

It is critical to find out who the different “players” are and

what their issues are likely to be.

- Who are the decision maker(s) for the business case?

- Who will be affected by the solution?

- Who are the people to approach when gathering information to

build the business case?

- Does the proposal have a champion or sponsor?

- Who are the potential naysayers?

Identify the

Business

Issues &

Stakeholders

Define the

Solution

Identify Costs

& Make

Informed

Assumptions

Quantify

Impact

19

CHRO

• High turnover costs

• Employee survey results

• Low employee engagement

CEO

• Growing top-line revenues

• Reducing product costs

• Expanding into new markets

CFO

• Reduce risk exposure

• Strategic mergers &

acquisitions

CMO

• Capitalizing on social media

• Building workforce capability to

deliver a perfect experience

to the “connected” customer

What Keeps Executives Up at Night

20

Identifying Business Problems

High turnover among

key positions

Difficulty hiring

the right

person

Theft / Loss

Safety issues

Growing operations

overseas

Improving

performance/

engagement

Meeting

regulatory / compliance

requirements

Reducing

operational costsInnovation— out-

innovating our

competitors

21

• Identify the issues

impacting the business

• Identify the organizational

sponsors/influential

leaders

• Articulate in ways that

engage the key

stakeholders

Identify the Issues

& StakeholdersExample Example Stakeholders Impacted

• Increased Absenteeism • Line Managers, COO

• High Turnover • CEO, CHRO, Line Managers

• System Consolidation • CIO

• Critical Skill Gaps • CEO, CHRO, Line Managers

• High Benefit Costs • CFO, CHRO

• Labor Law Changes • Legal Counsel

• Environmental Emergencies • Heath & Safety, COO

Identifying Issues• Talk to business leaders, line managers, HR, and talent

leaders

• Conduct industry & market research

• Identify key stakeholders: Who will make decisions? Who will

benefit? Who will be impacted?

22

Structuring the Business Case

• Identify issues

impacting the

business

• Identify

organizational

sponsors /

influential leaders

• Articulate in ways

that engage the

key stakeholders

Identify the

Business

Issues &

Stakeholders

Define the

Solution

Identify Costs

& Make

Informed

Assumptions

Quantify

Impact

• Detail the solution

• Consider

alternatives

• Determine risks,

dependencies, and

assumptions

• Identify both hard

costs and opportunity

cost drivers

• Engage stakeholders

to guide cost

assumptions and

validation

• Provide assumptions

and benchmarks for

costs

• Identify expected

benefits

• Quantify the

benefits

• Identify intangible

benefits (and

quantify if possible)

23

Define the Solution

Know what you have

Consider alternatives

Account for risks

Account for dependencies

24

Detail the Solution: Considerations

Where will the solution be used? In what

offices or facilities? In how many countries?

Does the solution build upon your current

resources and/or infrastructure?

How quickly does the solution need to be in

place?

Will we roll it out over time or all at once?

Should we combine the solution with

another related initiative?

How should we measure the solution’s

effectiveness?

25

Structuring the Business Case

• Identify issues

impacting the

business

• Identify

organizational

sponsors /

influential leaders

• Articulate in ways

that engage the

key stakeholders

Identify the

Business

Issues &

Stakeholders

Define the

Solution

Identify Costs

& Make

Informed

Assumptions

Quantify

Impact

• Detail the solution

• Consider

alternatives

• Determine risks,

dependencies, and

assumptions

• Identify both hard

costs and opportunity

cost drivers

• Engage stakeholders

to guide cost

assumptions and

validation

• Provide assumptions

and benchmarks for

costs

• Identify expected

benefits

• Quantify the

benefits

• Identify intangible

benefits (and

quantify if possible)

26

Typical Types of Costs

Technology/Tools costs

Headcount costs

Overhead costs

Training costs

Testing (Sandbox) costs

Hiring costs + onboarding

Allocated time for current staff

New analytic-specific software

Upgraded modules of existing

software

Hardware

New or revised facilities

27

If Benefits > Costs over a given time period,

you have a compelling business case!

Structuring the Business Case

• Identify issues

impacting the

business

• Identify

organizational

sponsors /

influential leaders

• Articulate in ways

that engage the

key stakeholders

Identify the

Business

Issues &

Stakeholders

Define the

Solution

Identify Costs

& Make

Informed

Assumptions

Quantify

Impact

• Detail the solution

• Consider

alternatives

• Determine risks,

dependencies, and

assumptions

• Identify both hard

costs and opportunity

cost drivers

• Engage stakeholders

to guide cost

assumptions and

validation

• Provide assumptions

and benchmarks for

costs

• Identify expected

benefits

• Quantify the

benefits

• Identify intangible

benefits (and

quantify if possible)

28

Reduce turnover

Higher revenues

Employee productivity

Revenue per employee

Cost reduction

Reduced theft

Higher customer satisfaction

Reduced errors

Better health outcomes

Reduced safety incidents

Impact on the Business: Examples

*

29

Cost Savings: Hard Costs Cost Savings: Soft Costs

Quantifying the Benefits: An ExampleReducing voluntary attrition at a pharmaceutical client

• Factoring in both hard and soft cost savings

Economic (Soft) Costs

Time to source / identify new

candidate10 days

Time to recruit new candidate 50 days

Time to train/develop in year 1 20 days

Total80 days

16 wks (80 days) x $2,000/wk $32,000

Time to reach productivity of lost

employee20 days

20 days X ($100 rev / ee hour)$16,000

$48,000

Cost of Voluntary Turnover to Organization

1% Voluntary Turnover Rate

X 30,000 employees

X $76,000 cost per employee

Total Cost $22.8M

This organization stands to

save $22.8 million for every 1 point

decrease in their voluntary turnover rate

Total Cost of Voluntary Turnover Per Lost Employee

Hard Costs $28,000

Economic (Soft) Costs $48,000

Total $76,000 per lost employee

Hard Costs

Recruiting and hiring costs per

employee$20,000

Training and orientation costs per

employee$ 8,000

Total hard costs per lost

employee$28,000

30

3131

Stumbling Blocks

32

Potential Hazards

Not aligned with a

corporate goal

Lack of a champion or

sponsor

Stakeholders not well

informed or supportive

Costs not well-defined or

validated

Benefits not defined in

business terms

Solution not clearly

defined

33

Presenting the Case

34

Prepare to present your business case

Socialize and gain support ahead of time

Be able to your case in 15 minutes, with backup materials available

Are Your Ducks in Order?

State the issue / problem:

Explain the business need

Describe the solution

Risks, dependencies, assumptions, timeline

Detail the Costs–financial

implications

Describe the Benefits / Impact

Reiterate briefly: issue, costs,

benefits, impact

1 2 3

4 5

35

Summary & Wrap-up

36

§ Do your homework.

Final Thoughts

§ Don’t go it alone...collaborate with

others to prepare the business case.

§ Create a business case that

reflects your stakeholders’ issues

and realistic benefits.

3737

Thank You!

Questions?

LinkedIn: KatherineJones

Twitter : Katherine_Jones

Blog at www.bersin.com: Technology for Talent

Email: Kathjones@deloitte.com

http://www.bersin.com/Blog/Default.aspx?id=743e55c5-ac69-4a5c-9cb5-997ef277606d

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