Effective Strategies for Presenting HR Software to Your Finance Team
When preparing to pitch an investment in HR software, HR leaders must anticipate specific questions from the finance team. Katherine Landon, Senior Vice President of Finance at ELMO Software, emphasises the importance of being ready to discuss the expected Return on Investment (ROI) and the methodology behind its calculation. Finance leaders often prioritise this question to evaluate the investment’s viability. A clear, demonstrable, and credible ROI is essential. ELMO Software commissioned an independent Total Economic Impact (TEI) study by Forrester Consulting, which revealed that a representative organisation with 500 employees and seven full-time HR staff achieved a 129% return on investment. Landon notes that finance teams seek more than just a statistic; they require a realistic assessment of the ROI, including a thorough evaluation of the underlying costs and benefits to the business.
Another critical question is whether the investment is a cost centre or a value generator. HR leaders must differentiate between strategic spending and discretionary spending. Landon advises that good financial stewardship involves challenging every expenditure to determine if it merely increases costs or provides genuine value to the business. A true value generator enhances capacity, resilience, and competitive advantage. The business case for HR software should highlight how the investment can reduce operating costs without diminishing output, scale functions without a proportional increase in headcount, strengthen compliance and governance while minimising manual effort, and deliver clearer workforce data for improved strategic decision-making. Additionally, understanding the Total Cost of Ownership (TCO) is vital. While TCO may vary, a thorough approach is necessary. Mature financial cases do not downplay costs; they demonstrate transparency and rigour, often requiring engagement with vendors to establish accurate TCO. Finally, HR leaders should articulate how strategic investments like HRIS mitigate risks for the entire organisation, not just enhance HR workflows.
Categories: ROI Assessment, Value Generation, Total Cost of Ownership
Tags: ROI, Investment, Value Generator, Cost Centre, Total Cost of Ownership, Risk Mitigation, Economic Impact, Compliance, Workforce Data, Strategic Decisions