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Achieving and tracking business benefits of your SAP HCM project

by Sven Ringling

May 20, 2013

During the last 17 years (bloody hell, I'm really getting old) I've seen my fair share of SAP HR projects. Large and small, private and public sector, implementations, roll-outs, optimisations, ... you name it. There is one thing, most of them had in common: project owners struggle to demonstrate how the project contributes to the success of the business. And this is no different for any other HRIS project (even though some vendors like Workday pretend to have found the holy grail) because the reason for this problem is completely unrelated to the technology used. To be very clear: I'm not saying these projects don't add value. Quite often they do, but find it difficult to prove. I found that a lack of clarity about objectives is where the trouble tends to start...     To begin with, you often find confusion between deliverables (a working system) and objectives, which usually would comprise business benefits. Deliverables are primarily the responsibility of the project team - benefits realisation is something the internal customer needs to be heavily involved in.   Then I find that measurements for success are often chosen, because they are easy to quantify, but don't necessarily because they fit the nature of the project. We like to use a scheme, which puts most HRIS projects into one of 3 categories:

1) Must-Do There are some things you can't avoid and you have to do them, even if you don't see any business benefits (other than being able to continue to operate, which is quite significant). These are usually statutory requirements (like RTI, the new online reporting interface to the tax authorities UK employers had to implement this year), but could also be technology related (e.g. a forced upgrade). Whilst it is easy to argue, why these projects are necessary, we often find over-investment in this category. The fact that it is important to have a solution doesn't mean it's got to be an all-singing-all-dancing one.  

2) Efficiency savings This is the favourite for all business case authors. If you can demonstrate higher efficiency, you'll always be able to put a number to it and show, what the net impact after deducting project cost is going to be. No issue with this. However, there are two common problems. Firstly, the ease of finding numbers often leads to too much emphasis being put onto this category, rather than the next one. Secondly, business cases are often argued based on savings, when the real benefits should be elsewhere. In these cases the numbers are often artificially constructed and often hardly to either prove or falsify. This leads to wrong decisions during the project and may impair benefits realisation.  

3) Adding business value This means the project somehow contributes to the business objectives of the whole organisation or other departments (e.g. Sales or Customer Service). This is where most HR departments want to position themselves. However, they often struggle to make a case for these projects, and if they do, seemingly accurate numbers often come out of thin air to create an illusion of a strong case, which often collapses, when challenged. Why is this? Well, firstly HR often can't make this case alone and shouldn't even try to. Other functions need to be brought on board. If the sales director needs to hire sales reps in new markets faster, he's the one to put a Euro sign to a shorter "time-to-fill". Secondly, management is not all about numbers in a spread sheets. That's why top level execs are paid a multiple of what spreadsheet experts earn. If the exec board agrees that line managers need a certain set of live online information to manage their teams better, then it's up to HR and IT to suggest a solution and add a price tag, which the board can decide about. But it's completely vain to calculate the value of this in Euros and Cents in a bottom up approach. Business cases are good, but detailed numbers made up for the sake of having a mathematical justification for something that's already been decided by top management based on sound judgement, are not only a waste of time, but can also blur the real objectives and so lead to wrong decisions along the way.

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Amy Thistle

9/25/2013 9:06:25 PM

Interested in hearing more tips and best practices from Sven? Be sure to come to HR 2013(, 11-13 June in Amsterdam to see him present the following sessions: Strategies for assessing the costs and realising the benefits of your HR technology investments Tips for forecasting and planning HR costs with SAP ERP HCM personnel cost planning and simulation When and how to use custom development to optimise SAP ERP HCM authorisations Proven change management strategies to ensure a successful transition to a global SAP ERP HCM platform I hope to see you there!

Kristine Erickson

9/25/2013 9:06:25 PM

Thanks for these great perspective on where making a business cases for an HR project - or any project - can go wrong! We're looking forward to seeing you in Amsterdam