The problems with legacy HR software: 7 steps to build a business case for a new HR system

What are the 8 common problems caused by using old HR technology?

It’s not change for the sake of it, but about businesses being able to recognise the detrimental effects of repetitive problems that suck the life from HR functions’ efficiency and energy levels. Substandard systems may come in different shapes and sizes, but they invariably prompt the same types of team-based glitches and grumbles. For example, they entail:

1. Lack of adaptability

Software cannot be adapted or tailored to support the business as it grows.

2. Siloed systems

With aged systems that lack integration and connectivity, building accurate accounts of your workforce is highly problematic.

3. Lack of data protection

In an age of super-sensitive information and confidentiality, storing important data across different systems is a risky business.

4. Limited functionality

Relying on systems which require significant manual data entry and offer limited functionality. Teams are weighed down with manual administration instead of working on strategic initiatives to benefit the business.

5. Poor analytics

Most organisations have a treasure trove of people data available but fail to convert raw info into valuable insights that could inform business decisions.

6. Risk management

Concerns the security of employee data and difficulty generating reports to prove compliance with local legislation. Costly errors are unavoidable.

7. No support

Current software tools are no longer supported by customer service or training. Only a few people in the business know exactly how all the systems work.

8. Endless admin

Repetitive tasks and manual processes often take up too much internal time and resources, stopping HR teams from achieving wider goals and better outcomes.

If your current HR systems are creating any of the above issues, it’s likely time to consider a HR software business case. Today’s HR and payroll software is agile, integrated and uses automation to save time on administrative tasks, leaving you and your management team to focus on driving your organisation forward. Whilst making a change can be daunting, it is far less problematic than the time taken to fix errors or design workaround processes to make your system work the way you need it to.

The benefits of a new HR system

The chances are that if your HR department isn’t functioning at an optimal level, some or all of the flaws mentioned above will strike a chord. They also reveal that it’s not typically people that are the problem, but rather the tools that teams work with and which have an immense impact on their ability to excel at what they do.

In addition, employee engagement, productivity and retention are all closely linked to the ease of which employees are able to find what they need and get on with doing the job they’re paid to do. That’s where upgrading your HR system can make all the difference. There are many more benefits of a modern HR system, for instance, it will:

Achieve ROI

Setting goals or targets for a new system is fundamental to its success. You should be able to then demonstrate using the system, how you’ve achieved these goals.

Save total cost of tech ownership

Upgrading siloed HR systems to an integrated solution can help save on your overall operational expenses (OpEx).

Empower employees with self-service

Self-service software inspires greater autonomy and control among staff, whilst also freeing up time spent on managing holidays, tracking absence and answering frequently asked questions. The time you’ll save through automation can then be reinvested in strategic planning to support things like employee engagement, development and performance.

Handle growth

Your new HR system should be future-proof, meaning it’s scalable and with the ability to grow along with your organisation, reducing your requirement to upgrade again in the next few years.

Integrate with other systems

Syncing data and functionality from one application to another using an API (Application Program Interface) could tick the integration box for your organisation. But, a fully end-to-end HR system will include broader functionality than simply people management and HR records, allowing for a seamless flow of data across the employee lifecycle, from recruitment, to onboarding, learning and talent and performance management increasing visibility of your people data and improving efficiencies. A joined-up system makes it easier for new data to be shared instantaneously between functions and with less risk of human error.

Be accessible

With a cloud-based HR system, employees can access data anywhere from any device, and it will be updated in real time, increasing levels of engagement and productivity.

Enhance the employee experience

The organisations who hire the most dynamic, skilled workforce are those who demonstrate the best employee experience. The employee experience starts at the recruitment stage, and should continue throughout the time they’re with your organisation. End-to-end HR systems drive employee engagement, saving employees time and reducing frustration.

Attract and retain talent

Enhancing your employee experience with a more intuitive HR system can help with talent attraction and retention and contribute to reducing attrition costs.

Streamline your onboarding experience

A slick and informative hiring and onboarding portal will impress your new recruits and set them up for success from day one. This also makes it possible to automate aspects of induction training and ask new joiners to complete initial compliance tasks before their actual start date, so they’re ready to hit the ground running.

Use valuable data insights to inform decisions

HR teams should be able to rely on their HR system to generate the valuable data and reports they need to share insights with key stakeholders and contribute towards key business decisions. Intuitive HR software will centralise your people data, making it simpler to cross-reference and visualise substantial datasets, and generate reports within just a few clicks.

How to build a business case for a new HRIS: 7 steps 

When it comes to building the business case for a new HR system, you need to have completed some substantial background research including the problems you have with your current systems and what your new system will need to do.

Technology is developing at a rapid pace and many people are now working in a remote capacity; 92% have reported that their organisation’s approach to where, when and how people work has changed and it is imperative that HR systems are able to keep up with these developments. An outdated or disconnected HR system is no longer viable.

Initially the key considerations when building an HRIS business case in a scaling organisation should be around levels of integration, mobile functionality and automated workflows needed. You will also need tangible statistics and data, available in your current systems, to support your recommendations. If this data isn’t reliable or easily accessible, you have the start of your business case already.

The key to success is to pitch your requirements from an HR perspective as well as from a wider business perspective. To get decision-makers on your side, you need to ‘sell’ the idea to them and make clear not only how you and your department will benefit, but also how perceived hurdles can be overcome and, ultimately, how the solution will help the company to meet its goals going forward. 

Presenting a strategic business case will showcase not only the specific reasons behind a new HR system, it will also highlight the risks of doing nothing, such as issues you have with your current system which could impact the objectives and productivity of your whole organisation.

Take a look at the following seven key steps for building an HR system business case:

1. Involve key stakeholders

It’s important to involve multiple stakeholders to find out what the challenges and requirements are for IT, Data and Finance departments for example, to ensure the business case fits with wider organisational objectives. Sign-off for the new HR system may take a while so sharing your intentions with the decision makers and weaving their initial queries into your plans will help with the final hurdle.

2. Recognise business needs

Reviewing your current system with a critical eye will help recognise what is missing and identify pain points. With a long list of competing priorities, it’s not always easy for decision makers to allocate budget so they need to be convinced just why a new HR system should be implemented. Getting feedback from multiple business functions, setting up tests or focus groups and asking employees for their suggestions is all useful preparation.

3. Gather data on current position

It is vital to collate data on the current position and then continue to build on that picture as it develops. When you are actively monitoring and measuring HR metrics, you can present an evidence-based argument and show progress and performance once you have put changes and tools in place.

4. Prove there is a problem

You already know that there are issues with HR delivery that can only be solved with a robust, fit for purpose HR system. You may be having to work with an out-of-date solution that no longer meets your needs, or worse, a cobbled together set of spreadsheets, databases and paper systems that make it difficult to stay ahead of the game and impossible to produce any meaningful management information. Focus areas to look at include:

• Inefficient processes
• Data compliance
• Information security
• Management insight

5. Identify the benefits

The next step is to look at the benefits a new HR system could bring to your organisation as a whole, including the problems it would be able to solve with ease. Whether this is by improving employee engagement, integrating real-time reporting and analytics or drastically reducing admin time, it is important to showcase just why you should be making these changes and the long-term impact they will have. Work with an external consultant or a HR software provider to identify these benefits and how you will measure the ROI of the software when it is implemented.

6. Do your research

The next step is to look at the benefits a new HR system could bring to your organisation as a whole, including the problems it would be able to solve with ease. Whether this is by improving employee engagement, integrating real-time reporting and analytics or drastically reducing admin time, it is important to showcase just why you should be making these changes and the long-term impact they will have. Work with an external consultant or a HR software provider to identify these benefits and how you will measure the ROI of the software when it is implemented.

7. Create and present your plan

The final step for a HR system replacement business case is to bring everything together and propose the next steps with a detailed plan of action. State both short-term and long-term projections and expected return on investment and obviously resource and budget that will be required. This is your chance to showcase just why a new HR system will offer tangible results for your organisation as a whole.

What other departments need to know 

IT Team

When putting together a HRIS business case, you must consider the needs of the IT team in order to prepare for the objections or hurdles that will need to be overcome and create the best chance of a positive outcome.  

Choosing and implementing an HR system will be another priority to add to what is probably already a long list of IT priorities for the business so it makes sense to think about the issues that might arise in order to smooth the process of moving forwards. In fact, for a larger business, any new software project should involve the CIO, IT Director or equivalent from the start, to help identify and scope out needs and goals and ensure the best results. 

Think about the following questions: 

• What will the testing and ‘go live’ process be? 
• What is the implementation process and how long is it likely to take? 
• Does the proposed software follow best practice? Are you choosing best of breed? 

Finance Team

Similarly, a representative from the Finance team will ideally be involved in a new HR software project from the start, particularly in a full HR transformation project where return on investment will need to be closely identified and measured in order to demonstrate success.  

Financial decision-makers are interested in three core areas:  

1. What is the cost of doing nothing?
   For example, if you were to keep your existing HR system, along with the challenges that brings, what will the tangible and intangible impact be on the business? Answering this question gives you the opportunity to identify the value of time and resources being invested vs wasted. Assign monetary value to inefficiencies based on an hourly rate and time spent. From here you can easily build a monthly cost picture of continuing to function in the current format. Agencies, software providers and consultants are often able to help with this exercise right from the start.
    
2. What cost savings could be made?
   Define the time savings and corresponding monetary value with a new, more efficient HR system in place. Think about the key functions that can be automated. Assign costs to one-off tasks such as responding to data access requests or creating a management report for the Board meeting.  
   
   
3. What new costs will be incurred?
   Provide a summary of the investment required to support the proposed new system including up-front and ongoing costs. 

Ensuring that IT and finance departments are a core part of a new project when building an HRIS business case system is essential for a well-rounded, holistic approach. It promotes collaboration, addresses technical and financial concerns, enhances data security, and increases the chances of a successful implementation and engagement. 

Other factors to consider

When putting together your business case for HR software, it is also important to include other considerations which may crop up. Below are some factors that may be added into your HRIS business case alongside your main steps.

Anticipating changes to budget

You may be in a position where your budget is uncertain further down the line which could impact the HR software you are able to implement. It is important in this case to look into the scalability of the software, alongside prioritising the most important factors, and looking at multiple different options to find out what flexibility and customisation is available.

Creating a CIP

A continual improvement plan may be required for longer-term planning. You may not be in a position to fully implement every aspect of a new HR system in one go, so preparing for this within your HR business case will help manage expectations of your stakeholders. Consider what can be included at this stage, and then what the plans are within the next 12-24 months. The HR landscape will likely look different so it is important to prepare for this as much as possible.

Flexibility for add on features

Implementing a HR system which is scalable and flexible is imperative for any organisation. Being able to add and remove features as required will help in both budgetary respects and for when an organisation goes through a period of growth. It would be a shame to implement a system which is integrated, seamless and easy to use but restricted in how much it can offer on a longer-term basis. Being aware of the limitations of a HR system will help at the planning stage and when discussing with stakeholders, who will want to understand the long-term benefits.

Your existing resources

If you are a small business (below 100 people), you may not have the in-house resource or budget to facilitate a large-scale HR transformation. In this instance, it may be more appropriate to opt for a simpler ‘out of the box’ solution, like Access PeopleHR. Such solutions provide functionality catered specifically to the needs of smaller businesses and work off an agile plan and pricing structure.

The disadvantages of updating legacy HR systems

When building your HR business case, there will likely be a number of questions or concerns that arise from senior stakeholders that may be more reluctant, whether that’s because of risk, budget or resource. Employees may already be comfortable and familiar with their current HR system’s features and functionality and may not want to go through the time and effort required for any training or onboarding on a new system. However, if a new system is intuitive, then employees should easily be able to pick it up without needing to go through an extensive training process.

A HR system with increased automation and mobile accessibility for example can help drive productivity and employee engagement, saving employees valuable time.

The focus of HR must shift towards building the organisation of the future. Now is the time to plan ahead and stake a claim for the evolution of culture, talent practices, learning and development and employee experience – and integrate the necessary technology to deliver it. Decisions made now will have a far-reaching impact on the ability for organisations to thrive, especially with choosing the right HR software. And whilst some employers may be thinking only in terms of stopgaps and short-term fixes, those that invest in the bigger picture of HR transformation will reap the benefits of attracting and retaining top talent, maximising wellbeing, and developing greater resilience for years ahead, rather than months.

What PeopleXD could help you achieve

Whether you’re a growing business taking your first steps towards HR transformation or a large organisation looking to take your employee experience to new heights, we’re here to talk through your challenges and tailor the perfect solution to suit your workforce. Our integrated HR and payroll software PeopleXD has helped many of our clients to...

• Exceed a target of 40% reduction in HR software costs
• Reduce HR tasks from six hours to less than 60 minutes