HR building a business case for the transformation
Well, like any other major business undertaking, HR initiatives require time and resources in order to be effective and result in real change. Technology and innovation have continued to disrupt and change the way HR functions. It is thus, safe to say that HR transformation is not a one-time event but a whole journey. Considering the recent developments and rapid innovation shaping business, HR transformation has gained a whole new definition and like all other domains pitching in for business objective, HR needs to present a strong case to achieve the same objective. These changes are going to be from the strategic point of view of the organization. Once your transformational change is identified and defined, there comes the second aspect of implementing this transformation. And that aspect is leadership buy-in, which is a crucial component when it comes to designing and implementing any process change initiative, especially investing in HR technology.
Therefore it is important to understand ‘how leaders are looking at HR transformation’ and ‘what are the elements that enable HRs to build a case for introducing and implementing the change.'
One of the most primary steps is identifying business challenges, processes that could be optimized, and opportunities for change. This step will help build the value proposition for the initiative and provide valuable context to help your audience understand the reasons behind the initiative.For instance, a lot of leaders are apprehensive of giving a green signal on any HR Transformation because it is very rare that the ROI of the project is mentioned or can be evaluated, owing to a lot behavioral and qualitative changes which can’t be quantified per se.
The Functional and the Operational teams need to sit together to draw out the plan step by step, who are the stakeholders respectively, current gaps in processes and what will be the pain points during execution, doing a complete root cause analysis of the challenge that has been recognized.
Since the HR transformation will be connected to the business objectives of the organization, we have to frame the initiative within the context of the company’s bigger picture. That means that all the issues, solutions, and results that you outline in the business case are to be linked to the company's business strategies, goals, and bottom-line whenever possible. This will help you show key stakeholders how your initiative will make their jobs easier and help them to accomplish their goals.
Once the challenge has been recognized and run through a thorough analysis, the solution that will be presented should be as specific and concrete as possible about what new policies and procedures you want to establish. Outline what will be changed, added, and removed and how that will be accomplished. For each step, describe what resources you will need and how they will be allocated, along with how the step will contribute to the solution. This will help you present a clear cost/benefit analysis and justify each expense.
It is also a good idea to provide a timeline for project execution and completion. Describe when you will implement each component of the initiative and when the complete solution will be in place. Then establish follow-up procedures and key metrics to measure project success. Leadership will feel more at ease investing in a project when you give them a way to tell whether or not the initiative worked and what return they got on that investment.
Here are critical questions you’ll need to address within your business case:
What is the impetus for change? Why do we have to do this now? What are the business benefits? Is it de-risking? Is it acceleration? Is it fostering growth?
What are the metrics? How are we going to measure success? Do we care about industry benchmarks, key competitors, internal standards, or all of the above? Are we prioritizing improving our engagement scores? And how are we going to know we’ve arrived (because frankly, once you start transforming, you’re never done)?
What’s the scope? What’s the functional, geographical, and operational scope? Which processes and which populations are we targeting, and when?
Who are our sponsors in this process? Who’s been a good steward? Who’s been involved throughout? Who will be surprised to learn about this initiative? Are there winners and losers, and if so, have we thoughtfully considered the political ramifications?
What’s our timeline? Are we going for a “big bang” approach or staging the initiative over multiple years? How does the proposed timeline align to our fiscal year?
How are we embracing change? Is there a tried and true approach to continuous organizational improvement? How will we communicate with employees, and who will drive the message? Have we secured all necessary executive sponsors as key advocates?
How does this dovetail to other transformational elements that are affecting the organization right now? Are there other modernization efforts throughout the enterprise?
What are the critical financials, and what are other considerations that are unique or nuanced to the organization? Is this our first move to the cloud? How do we treat capital versus operating expenses? Will internal project resources be allocated, if approved, or do we have a charge back process?
These questions will help in clearing a lot of other issues with the buy-in and the changes in the HR policies like:
A good understanding of their current processes
These processes are documented now
Achieved Senior Management ‘buy in’ to affect change
Prepared Managers and Employees for the reason why change is required
Ultimately having a clear idea of where they are today and where they want to be in the future
After this, we outline what effect the initiatives will have on those challenges, and what that will do for the company’s performance and financial health. This section is divided into two sub-sections: internal effects and ultimate project impact.
The internal effects are the intermediate steps that drive the ROI. Fundamentally, they are improvements in the way that the company operates. Describe how the initiative will make the company more effective.
The project impacts affect the company’s bottom-line. If unclear whether a result would fall under the first or second category, consider whether or not it has a dollar-value attached to it. If it does, it’s in this second category. Returning to the example of the employee engagement campaign, impacts might include the revenue generated by increased productivity or savings from decreased turnover.
Round this step off with clear takeaways that will resonate with senior leadership. These combine the effects and impacts that you identified above into bigger-picture ROI and cost/benefit analyses.
