The following was contributed by Lexy Martin of CedarCrestone on a very interesting study highlighting key ROI metrics behind HR technologies:
With ten years of survey data, and lots of experience doing business cases for HR technologies, CedarCrestone (Lexy Martin) decided to do a white paper on how to use that material to support business case development. The Value of HR Technologies: Metrics and Stories seeks to uncover the value organizations have achieved from various workforce technologies from looking at ten years of research as well as through three in-depth customer case studies showcasing the benefits and impact these organizations achieved from these technologies. It’s got lots of facts and figures and readers may be able to find some that will help their business case work.
Highlights from ten years of research include the following:
- The longer solutions are in place, the higher the satisfaction level – obviously most organizations get better over time
- Early adopters to any technology often see the intrinsic value and do not need to do cost justification – I’ve seen that be the case for 10 years. The financial services and high-tech organizations do technology solutions for their customers and then apply those services to their employees too
- A few organizations ARE improving revenue/operating income through deploying talent management solutions such as recruiting or performance management solutions
- Organizations that outsource their core HR record keeping process serve more employees per HR staff than those that do not. While there is no surprise with that finding, companies still need to do due diligence on just what services will be provided to their employees through outsourced services and make sure they are as good and as complete as what they can do themselves.
- The study also highlights that organizations with three applications achieve better financial performance than those without: an HR-oriented help desk application, competency management application, and enterprise warehouse with HR data.
One thing clear to me is that there is no “one way” to prove the value of HCM technologies. It is dependent on the technology under review and the state of the organization interested in adopting the technology and even the state of the economy and availability of investment funds at the time. The white paper outlines several approaches an organization might consider to determine value and for which technologies: process savings, headcount changes, metrics, best practice outcomes, and causal links and models.
The white paper concludes with three case studies of customers in the retail, public sector, and high-tech industries, highlighting the following values achieved: United Nations’ substantial cost savings from its global integrated ERP implementation in human resources, finance, and customer relationship operations; Applebee’s common-sense approach to creating a talent management-based organization in an industry with incredibly tight profit margins and how it helps them open new sites; and Oracle’s groundbreaking use of Web 2.0 tools, integrated with HCM technologies, and areas that may over time show hard dollar savings.
The approach used to document the potential value of HR technologies will be unique to each organization. Process savings are useful in justifying any process improvement through HCM technologies such as from self service; while metrics such as time to fill or headcount changes are a means to justify the various talent management technologies such as recruiting, performance management, or compensation management, and other talent management applications. With new technologies like Web 2.0, early adopters may need to go forward on faith alone but might also benefit from example stories like the one from Oracle.
To receive the full CedarCrestone The Value of HR Technologies: Metrics and Stories whitepaper please visit http://www.CedarCrestone.com/whitepapers . And, please provide feedback to Lexy Martin on whether the report is useful. It’s getting close to “survey time” for CedarCrestone, with a new survey invitation going out in early June, 2008.