Building the HRM Technology Business Case

The highly anticipated CedarCrestone 2012-2013 HR Systems Survey White Paper, 15th Annual Edition was released at the HR Technology Conference in Chicago last week.

If you have any thought of adding HRM technology to your budget next year, the data in this report can be the foundation of your business case for the investment request.  Even if you aren’t going to ask for technology investment money for FY2013 this report will give you important data for managing your technology in new ways.

In analyzing the more than 1200 survey responses to identify key common practices, the CedarCrestone team (led by Lexi Martin) used these four independently validated key financial metrics to identify the highly successful organizations:

  • Revenue per employee:  Top performers is $681,903 vs. $352,576 for all others
  • Profit per employee:  Top performers is $317,508 vs. $131,157 for all others
  • Operating income growth (EBIT):  Top performers is 61% vs. 11% for all others
  • Return on Equity:  Top performers is 23% vs. 10%

Once the pool of top performing organizations was created, the analysis for common practices began and resulted in identifying the following Seven Practices of Top Performing Organizations:

  1. Top Performers have standardized processes and sophisticated change management processes.
  2. Top Performers are more likely to already have, or be planning a move to, a SaaS HRMS.
  3. Top Performers avoid extensive customizations of their HRMS.
  4. Top Performers have higher user adoption of employees, and manager self service, and shared services.
  5. Top Performers are more likely to have an integrated Talent Management system on the same platform as their HRMS solution.
  6. Top Performers have more sophisticated business intelligence solutions in place and more often put these tools in the hands of managers.
  7. Top Performers have more HR technologies in use and spent less on HR technology per employee.

The CedarCrestone 2012-2013 Survey White Paper goes into great detail about each of the seven best practices with quick characteristic overviews as well as deep data dives.  Well written and easily understood, this report is full of really useful information – whether you’re an HR department of one or one hundred.

The best practice that caught my eye was #7:  Top Performers have more HR technologies in use and spend less on HR technology per employee.

Regardless of the application category, Top Performers have more technology in place than the others.  We place each respondent in a technology application adoption quartile:  62% of Top Performers are in the top quarter of application adoption vs. 35% of the other publicly traded organizations; the categories of BI (Business Intelligence) and social applications both had 20%+ differences in adoption  between Top Performers and non-top performers.  And all of that technology still comes at a 12% lower cost per employee! 

It may seem  counter-intuitive that more technology means less cost, or that more technology means less humane-ness.  But what’s more humane than the organizational stability that comes with success?  What’s more humane than a highly profitable business that’s able to invest in talent?  What’s more humane than the organizational growth and longevity that higher levels of productivity produce?

Download the CedarCrestone report here, get a cup of coffee and spend an hour on the data and conclusions.  You won’t be sorry because these dots connect.

It’s budget season. You need the business case to invest in HRM technology and this report will give you most of the firepower you’ll need.  You could be a hero at this time next year!

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1 Comment

Filed under Business Case, CedarCrestone, China Gorman, Connecting Dots, EBIT, HR Analytics, HR Data, HR Technology, HR Technology Conference, HRM Technology

One response to “Building the HRM Technology Business Case

  1. Thanks China. I love that you;ve also connected success to “humane-ness”
    Lexy

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