Welcome

To

Discussion

On

Cost Justifying HRIS Investments

Issues For Discussion

1.Introduction
2.Justifying Strategies for HRIS Investments
3.Evolution of HRIS Justification
4.Approaches to Investment Analyses Makes a
Difference: Some Guidelines
5.HRIS Cost-Benefit Analysis
Introduction

In most organizations today, an HRIS provides the primary

infrastructure used to deliver HR programs, ensure HR regulatory
compliance, and produce the metrics that are used to evaluate not
only the HR function but also the contribution of the organizations’
human resources to the accomplishment of firm-level strategic
objectives.
HRIS functionally continues to evolve and to expand-
no longer simply shifting paper-and –pencil processes
to their electronic equivalents but seeing new
capabilities that leverage the advantages of integrated
information systems and faster and more capable
computing technologies.
Justifying Strategies for HRIS Investments

Strategies for justifying HRIS investments fall into two categories. These are as follows:

1. Risk avoidance Risk avoidance is the elimination of hazards, activities and exposures that can
negatively affect an organization's assets. Whereas risk management aims to control the damages
and financial consequences of threatening events, risk avoidance seeks to avoid compromising
events entirely
2. Organization enhancement Organizational development can be defined as an objective-based
methodology used to initiate a change of systems in an entity. Organizational development is
achieved through a shift in communication processes or their supporting structure.
Evolution of HRIS Justification

1. Low-hanging cost reduction fruit

2. Increase investment in HRIS
3. Nature /size of the organizations
4. Benefits of new investments in HRIS
Approaches to Investment Analyses Makes a Difference: Some
Guidelines
1.Be honest with yourselves
2. Focus on key functionality rather than on specific hardware or
software solutions
3. Examine benefits before you examine costs
4. Know your business
5. Develop the best estimate possible
6. Distinguish between the analysis and the packaging of that analysis
for decision makers
HRIS Cost-Benefit Analysis
Direct ( Hard) Indirect ( Soft)

Benefits Revenue Enhancement 1 2

New revenue Improvement potential
(new sales) ( better decision making)
Cost reduction 3 4
Direct costs Potential costs
(cancelled vendor ( saved staff time)
contracts)
Costs New implementation 5 6
costs Out-of-pocket costs Indirect costs
( software, service ( increased technical
agreements) support needs)
Thank You

For

Attending

This Session