Why Do You Need a Strong Business Case for Transformation?

December 14, 201611:16 am348 views

High-performing companies set themselves apart by constantly looking for new ways to drive value. It is a fiscal responsibility to drive efficiency improvements in people operations, but this alone may only have a small impact, as it represents a small percentage of the organisation’s overall revenue.

Given the significant amount of workforce related challenges that organisations will face in the future, HRs have a unique opportunity to add value to the organisation as a whole. Economists predict double digit growth for HR professionals, as business operations increase in volume and complexity.

Thus, the contributions of HR driven transformation programs are recognised to not only drive acceptable business performance, but to be the key differentiator that can drive exceptional business performance.

Components of a Successful Business Case

Strategy Alignment: A clear understanding of the strategic business direction is fundamental to framing people strategy that supports how the workforce will be managed to achieve this. This then leads to a deeper understanding of the business problems to be solved or workforce goals the business wants to achieve. It also informs the top people challenges that may prevent you from achieving these goals.

Opportunity Assessment: Once the people gaps are identified, it translates to an opportunity assessment that clearly summarise the gaps in order of priority to show, what must be addressed to achieve the business strategy. Similarly, the technology landscape supporting the people processes are reviewed to be optimised, fixed or completely replaced by new technology.

This also considers the nature of the business at present, policy and legislative pressures, industry trends and other transformation programs at work. Additionally, it is wise to consider specific workforce challenges, as well as the potential impact of the future strategy and suggested changes on the culture of the organisation. This component ensures this is not simply a technology conversation only.

Future Roadmap: The roadmap opportunity assessment will shape the design of an end state proposal that is plotted in the form of a roadmap or program of work over time.  Considerations in this exercise include the business and people calendars, financial year, the existing technology landscape, duration of implementation, priority for value realisation and the business readiness for the change.

The target audience finally also informs the roadmap. The complexity and volume of change that will be introduced can impact the sequencing and timing of programs at work. People can only absorb so much. This informs the required change management and learning development effort required to ensure early adoption of the technology during implementation.

Return on Investment: Return on Investment is completed following a detailed understanding of the future roadmap. This is important, as the cost, phasing and integration of the technology solutions that are recommended, will impact the estimated value and when it may be achieved.

Return on Investment is typically calculated over a 5-year period where estimated cost and recurring business benefits are combined and graphically presented. This typically includes a forward projected view of the Net Present Value, the payback period and the cost of delay.

Estimated cost used in the above will include elements like annual subscription (Cloud), implementation costs (inclusive of change and learning efforts required), cost of capital (if borrowed) and a corporate income tax rate (if relevant).

Recurring business benefits are calculated based on each talent process that may be a source of value creation and percentage improvement is translated into dollar value.

Value Realisation: Tracking and driving business value compliments mature project management principles. Any technology transformation must track and drive value back to business goals and KPI’s to ensure it drives business outcomes. It is well known that what doesn’t get measured, doesn’t get done!

Why a Business Case?

When an organization arrives at the point where it must re-imagine the future, where technology is a source for value creation and transforming into a digital business, it is critical to invest in a thorough business case process before embarking on any technology journey.

A technology transformation can drive significant business value, so it is no longer just a consideration, it’s a matter of survival.

 

Author credit:  Michelle Clyde, Business Transformation Lead at Presence of IT

Michelle is the Business Transformation Lead at Presence of IT, a leading consultancy and provider of the world’s foremost Human Capital Management solutions. Michelle is a dynamic and visionary leader with extensive experience in leading business transformations, cloud technology solutions delivery and value realisation within the Human Resources space across large-scale projects and business programs of work.  She is passionate about her pursuit for business excellence, especially when it relates to people and how they drive business outcomes.

 

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