It all depends on how HR managers blend their creativity and understanding of the business needs to build the case for investment in technology
Most of the organisations embarking on their digital journeys commence their programme often with forays into customer related processes that impact sales, logistics or new product development supported by return on investment models. Many follow the agile approach to investments and cautiously assess the outcomes and returns at every stage before proceeding with the next incremental tranches of investment.
In order to make their digital transformation programme successful, there is an increasing recognition that systems and processes impacting people would also required to be addressed. However arriving at the RoI in HR tech is not so simple. The traditional approach to investing in HR tech has been to consider factors such as reduction in processing time for various tasks such as payroll, compliance, leave and attendance management and others.
Thus the rationale is often built around productivity enhancement which is important but is still subject to debate on the quantum of risk vs reward as well as the timeframe when the outcomes are possible to be achieved.
During Covid times, when many organisations have had to adapt to remote working it may have become somewhat easy, but the question of establishing the value derived from such investments still remains a concern for decision makers. Hence the need for building even more stronger cases for future investments in HR tech.
Establishing clearly the quantifiable benefits from investment would continue to be the starting point in winning the decision in favour of HR tech investment. Attempt could also be made to establish the total cost of ownership which would mean cost versus benefit should cover not only the direct cost of software but consider other related costs such investment in training, training infrastructure, technical support, new IT assets and upskilling or new hires for new talent required for successful implementation. This would mean getting granular in detailing the avoidance of wastage and leakage, savings in manpower or other infrastructure cost to support the case for investment.
Understanding the nuances of digital technology and being able to present the benefits of specific features of the proposed solution would also be helpful. For instance, AI led software could reduce the time to offers which in turn would have a correlation with revenue generation for the business. It is also possible to demonstrate savings by moving the applications to the cloud.
Qualitative factors too are the reasons why many investments are sought and in order to support such cases it would be best to link them as aids to achieve the business goals. For instance, investment in AR/VR tools for sales or after sales support staff could result in trained talent pool that could help in achieving the revenue targets for the company. In recent times, enhanced employee experience has become an important dimension in the employee journey. It has assumed significance specially with remote working as well as due to the war for talent for accessing and retaining highly skilled workforce.
Thus we find the factors available to build a positive case for investment in HR tech are far higher today than ever before. The success rate in winning the mandate will depend upon how well HR managers can blend their creativity and understanding of the business needs to build the case for investment in technology.
Originally appeared in Financial Express