Stacey Harris’s presentation at IHRIM last week (The Quantified Organization: Data-Driven HR Functions) provided many interesting insights from Sierra-Cedar’s 2014-2015 HR Systems Survey, not the least of which was this finding:
Organizations that invest in any form of Change Management experience benefits of reduced total HR technology costs per employee. Those organizations with a Culture of Change Management spend 57% less for their HR technology than those that never do Change Management
Change management work can be a tough sell, so I was excited to see a compelling statistic that makes it easier to build a strong case. Yet, it wasn’t until I took a step backward and put on my HR hat that I had an “aha” moment on a much broader scale, namely how HR communicates its value to an organization.
Clearly, HR has gotten better at pitching HR and talent initiatives in terms beyond promised improvements in HR efficiency and effectiveness. We have learned to include our impact on business outcomes such as competitive advantage, market share, profit, and productivity. In a way, however, we may have reached too high and become our own worst enemies. We promise results, but we use words like “influence,” “affect,” and “contribute to” when CEOs and functional executives want hard numbers.
High-level business outcomes can be vague and elusive, often seeming far removed from HR’s day-to-day lives. For example, it makes intuitive sense that employee engagement boosts productivity, enhances customer satisfaction, and reduces recruiting costs, so if scores rise by eight points over the prior year, HR is thrilled. Our CEOs, however, want more. They ask what impact improved engagement has had on the business, so that they can determine if their investment in engagement initiatives was—and will continue to be—worth it.
What struck me about Stacey’s comment above is that IT spend is a hard number and much more accessible than a high-level number like profit. Even better, it’s a big number: Computer Economics 2015-2016 survey pegs it at 2.3 percent of revenue*, and Gartner and CIO magazine suggest it is as much as 4 to 6 percent of revenue. What I’m saying is that IT spend is much easier to get your arms around, so it has to be easier to demonstrate how an HR initiative—in this case, change management—affects the various components of IT costs.
When SteelBridge Solutions delivers change management services, our goal, in simplest terms, is to help clients maximize user adoption of their new technology so that they achieve the objectives that drove their investment. For example, clients who select Workday usually are seeking some combination of quality, service, and cost improvements. Given that the average SaaS HR system implementation costs seven or eight figures, getting approval is no small decision. Ensuring that the desired benefits are realized—in part, through a Culture of Change—should be a no-brainer. Maybe one way of convincing our organizations to make that investment is to lower our sights and think of our impact in simpler, more concrete terms.
In future blog posts, we will expand on this topic, clarifying what it means to have a Culture of Change and elaborating on the elements of IT spend. Then, because SteelBridge Solutions works so often with Workday, we will focus on it to illustrate how exactly change management reduces IT spend. It isn’t the end game, only the first step toward creating a mindset clients can adopt to enrich their change management business case. Stay tuned!
*varies significantly by industry sector and organization size