Whether making the business case for investment – or evaluating the success of an implementation, knowing where to look for benefits is often half the battle. Quantifying the benefits of human resources applications requires close collaboration between the IT and HR teams to establish a 'base case' and set key performance metrics to measure success.
Common benefits from Human Resources Management applications include:
Improved HR staff productivity – by automating or optimizing tasks, lowering required skill levels needed and improving business processes for recruiting and hiring, employee development and training, performance reviews and management, compensation and incentive management, benefits management, payroll administration, HR administration, time entry administration, travel and expense administration and HR support desk staff.
Improved manager-employee activity on HR-related tasks – by automating various HR tasks for managers or improving business processes, leading to time savings and productivity gains. These tasks include performance reviews and management, compensation and incentive program management and tracking, recruiting and hiring, employee profile management, time-off/absence requests and approvals, time recording, tracking and management, travel and expenses and benefits review and enrollment.
Reduced benefit administration fees – certain service fees can be avoided by automating reporting and tasks, or avoiding the need for all or some of the external services needed for reporting, filing, compliance, maintenance and management of various programs.
Reduced recruiting and hiring fees – minimize outside service fees for advertising, agency fees and resume processing.
Reduced printing, copying and mailing costs – administrative fees for printing, copying and distributing handbooks and guides, enrollment packages and other HR forms can be reduced by placing important documents online, distributing important notices via e-mail and/or automating various HR forms.
Reduced training and meeting fees – training classes can be made more efficient and effective, consolidated and virtualized leading to savings in various facilities, materials, travel, class and overhead fees.
Reduced employee turnover costs – employees who are given more accurate and timely information and who participate in streamlined HR processes such as compensation, reviews, travel and expense, benefits and time entry often claim higher satisfaction, reducing turnover rates.
Improved travel and expense management – automating travel and expense management can help to improve corporate credit card usage and reduce maverick spending.
Error reduction reduces costs – by eliminating payroll errors, compensation and incentive pay mistakes, workers compensation overpayments.
Reduced risk of non-compliance fines and penalties – policies and procedures can be documented and instituted, and reporting standards can be refined and automated in order to meet best practice compliance management and avoid non-compliance or litigation risks.
Reduced HR systems and management costs - current HR management systems can be consolidated or replaced with lower cost-of-ownership solutions, helping to avoid IT capital and operating expenses.
Strategic business impact – the revenue impact of satisfied employees to the business is a factor to consider, however this is often difficult if not impossible to quantify.
| ABOUT THE AUTHOR: |
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Tom Pisello
Tom is the president and CEO of Orlando-based Alinean, the ROI consultancy helping CIOs, consultants and vendors assess and articulate the business value of IT investments. He can be reached at tpisello@alinean.com.
Copyright 2005 TechTarget
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