Any business would vouch for Return On Investment (ROI). An investment is deemed fruitful if you have a positive ROI- And HRIS is no different. There is no doubt that HR Information System or HRIS is an important tool for businesses today. With an ease of managing activities like Payroll, Benefits Management, Talent Management, etc. through single software, HRIS easily merges people and technology.
Like any other investment, your CFO would certainly ask you about ROI on HRIS. But, there are no two ways that, it is certainly difficult to calculate this because HR is not a profit-seeking department. Like so many other investments, ROI on HRIS is not quantifiable. Answering following questions may help you to quantify ROI for your next meeting with your boss:
1) What was the actual cost involved?: Cost is the major factor your boss would be concerned about. Add up all the related costs. Everything which was paid to make HRIS possible should be added up- software cost, training cost, and resource cost. A real picture comes when you compare it with all the tangible and intangible savings and benefits.
2) What was the total saving?: As much as it is hard to estimate the total cost, it is harder to estimate the total savings involved. Calculate the savings you made in terms of time due to automated HRIS. Time being saved by doing the mundane and administrative tasks by your team due to software implementation is an essential part of your ROI
3) What were the benefit areas?: Note down all the areas in which the HRIS has helped. While implementing you must have made a list of priority areas. Take that and list down the benefits in terms of elimination of manual processes, time reduction, and reduced risk. All these become a significant part of your ROI.
4) What progress have you made since its implementation?: It is imperative to measure the progress of any system in an organization. Check the performance of the current system on the parameters defined as by you. Compare how your team has flared with HRIS and how it had performed without the system previously.
5) Does it help in increasing the productivity?: Analysis how your HR team performed before and after HRIS. Has their productivity gone up? Are they able to perform more tasks and achieve results in a better way? If yes then your HRIS system is giving positive ROI.
True ROI on HRIS can be calculated not only in terms of money but also in terms of time. Make sure your CFO sees the benefits of time-saving with the help of HRIS. You may not find immediate results, but HRIS is surely a good business decision.
With its long term ROI, you need to track continuous progress. Tracking would reveal areas to be improved. With more conscious tracking, you would be able to determine the real progress and ROI of HRIS, making it easy for your team to achieve greater efficiency.