A successful transition to a cloud-based core HR solution like SAP SuccessFactors Employee Central requires more than just a project plan. For an Employee Central project to succeed, you must undertake a critical review of existing business processes, closely align with HR’s strategic goals, and – most importantly – obtain buy-in from the highest levels of your organization. Securing that buy-in requires a solid business case that is based on measurable results.
Why Build a Business Case for Moving Core HR to Employee Central?
The idea of building a business case to support a significant investment in a core HR solution like Employee Central is not a new concept. Yet in a recent HR-focused SAPinsider survey (of 278 individuals across 129 SAP customers), 31% of all respondents indicated that the lack of a business case is preventing their organization from moving all or some of its legacy HR applications to the cloud.
Among respondents who indicated they are generating HR business results equal to their peers (we will call them “the industry average”), 42% cited the lack of a business case as the number one impediment to adopting cloud HR solutions like Employee Central. The primary reasons given by industry average respondents for their inability to build a business case center around measurements. These reasons include the absence of meaningful key performance indicators (KPIs) and an overall lack of understanding about the capabilities of the cloud HR applications.
Leaders Rely More Heavily on Measurements to Track Success
As we dug deeper into how different respondents measure success, we found more key differences between survey participant groups. Those respondents who indicated they are achieving HR cloud technology results that are slightly better or significantly better than their peers (we will call them “leaders”) are far more focused on measurements than other participants. Leaders are more likely to invest in cloud HR applications like Employee Central that help them to proactively measure key metrics like employee engagement in support of their HR strategic goals. In contrast, their non-leader peer groups are more likely to be driven by reactive forces such as mandatory cost cutting.
Leaders also tend to use and measure a wider variety of KPIs than the rest of those surveyed. The measurements employed by the leaders enhance their ability to defend the return on investment (ROI) for their cloud HR projects. They include:
- Time to hire. This is one of the most powerful KPIs leaders use to track both candidate experience and process efficiency with SAP SuccessFactors Recruiting and Employee Central. It provides insight into cost, effort, and quality of hiring processes and is a key part of tracking candidate experience.
- Employee satisfaction. While there are many ways to measure employee satisfaction, there is no question that solutions and platforms like Employee Central play an integral role in meeting employee experience expectations by offering the intuitive user interface, integrated processes, and the easy access to employment information employees expect.
- Retention rates. Along with developing and engaging talent, SAP SuccessFactors Talent Management solutions allow employers to assess, understand and strategize employee development in order to maximize retention and reduce turnover costs.
What Does This Mean for SAPinsiders?
Before building a business case, be sure you fully understand the capabilities of the HR applications you plan to implement. For example, if your KPIs require you to track time-to-hire and cost-to-hire metrics, will your recruitment application provide you with the necessary data points to track them? This answer will help you define the proper measurements that will demonstrate the added value of your planned HR business processes. A solid business case for cloud HR that is based on measurable results can help you:
- Improve your project’s priority over others — financially. Competition for new project funding is fiercer than ever. Building a business case on a solid foundation of measurable results can help position your project above others in your organization.
- Elevate HR’s business impact. The leaders in our survey differentiated themselves by their willingness and ability to track hidden employment costs. Demonstrating results like these that affect the bottom line will show the importance of HR to the organization’s overall success and change the perception of HR from a tactical to a strategic function.
- Reduce risk on HR investments. A business case that uses measurable targets will help keep your efforts focused and lower the risk of a project failing or straying off course.
- Properly track ROI year over year. A wise project manager once told me, “You can’t prove success if you don’t measure correctly.” As our research found, leaders are more likely to invest in applications that measure key metrics that support their HR strategic goals. Your project’s sponsors will demand long-term accountability, and your planning and the right data and measurements will help demonstrate that.
Following this guidance should help SAP customers properly plan for and measure the results of their cloud HR initiatives. For additional insights and lessons learned, look for the upcoming SAPinsider benchmark report on “State of the Market: How the Cloud is Transforming HR”.