Key takeaways

  • An effective business case is the key to getting buy-in for new HR software, whether you’re moving to a different system or investing in a new tool.
  • When creating your business case, use data-backed research and analysis to explain how your proposed solution will solve your company’s biggest human resources challenges.
  • Include specific details that will address stakeholders’ questions and concerns to make it easier for them to give you the green light.

How to create a business case for HR software

A business case is a formal proposal that outlines a project’s benefits, costs, risks, timeline, and what kind of business problem it will solve. Putting together a business case can help you prepare for the various concerns or pushback you might receive when proposing a new human resources (HR) software solution to decision-makers.

It can also highlight the positive effects new HR software can have in areas like:

  • Operational efficiency.
  • Risk management.
  • Productivity.
  • Business expenses.
  • Employee experience.

By following the steps below, you can increase your chances of securing buy-in from team members in different business areas.

1. Understand your stakeholders

You may clearly understand why you need new HR software, especially if you use or will use the software for your job every day. But, for those who may not be in the system as frequently, you’ll need to understand their business priorities to emphasize how the software will positively impact them, even if only indirectly.

Higher-level executives and leadership include people in the following positions:

  • Chief executive officers (CEOs).
  • Chief operating officers (COOs).
  • Chief financial officers (CFOs).
  • Chief human resources officers (CHROs).
  • Chief technology officers (CTOs).
  • Chief information officers (CIOs).
  • Vice presidents.
  • Owners or co-owners.
  • Founders or co-founders.
  • Board members.

These leaders primarily focus on bigger-picture company strategies, policies, and growth goals. As a result, they are usually less concerned with how the software improves the day-to-day experiences of end-users.

So, you will need to highlight how the software will help accomplish business objectives or exceed competitive benchmarks. For example, you can note the software’s robust data collection and analytics tools that can uncover workplace inefficiencies or trends and help you develop tactical action plans.

Unsurprisingly, cost will be front and center in the minds of financial stakeholders. To prepare, you should assemble a cost-benefit analysis demonstrating how the solution will cut costs or maintain profit margins.

And, if the solution happens to be more expensive, be prepared to explain how it may affect costs indirectly. For example, the right HR software can lower recruitment spend, reduce the risk of labor law violation penalties, or increase employee productivity.

Accounting and payroll specialists will also want to hear how the solution can improve their day-to-day efficiency. To grab their attention, highlight capabilities that reduce manual processes, like automations and integrations with accounting systems that streamline data entry.

A new HR system will affect HR and admin staff the most day-to-day. They’ll want to know the specific features the solution will have to make their workdays easier, like tools to combat duplicate work and reduce rote tasks so they can focus on higher priorities.

You will also need to explain how the software addresses their particular pain points, like inefficient HR case management.

Recruiters’ main concern is finding and hiring top candidates in a competitive job market. To do this, they’ll want to know if your proposed HR solution will help them automate repetitive tasks, attract passive candidates, or maintain a healthy candidate pool.

Even if the HR software does not include an applicant tracking system (ATS) or recruitment features, recruiters will still want to understand how the system will improve the employee experience for marketing purposes. For instance, an HR system that offers on-demand pay or assists employees with benefits selection could help recruiters highlight these benefits to attract qualified candidates.

Learning and development (L&D) teams are interested in how the HR software can simplify training processes and provide employee development opportunities. They’ll want to know how the HR system will integrate with current L&D tools, optimize onboarding and compliance training requirements, and measure course completion and effectiveness.

IT teams want to ensure your new software will integrate well with existing tech stacks, maintain excellent data security standards, and scale alongside the company. They’ll also be interested in the implementation timeline and hardware requirements to understand how employee and customer technology use might be affected.

Mid-level managers are mainly concerned with how the new HR software will simplify or complicate their day-to-day processes. Their positions make them keenly aware of larger business objectives as well as the everyday needs of their teams. So, they’ll want to understand how the software affects their portion of HR tasks, like paperwork and performance management. 

They’ll also want to know how the new system’s workforce reports and analytics capabilities can help them tackle challenges like turnover and process inefficiencies.

Most employees may be indifferent to a new HR software solution, especially if they only need to log in for occasional needs. However, you should still prepare for common questions they may have around topics like data security and access permissions. Other features you can highlight that make employees’ lives easier include self-service capabilities, centralized file management, and notification controls.

2. Conduct preliminary research

Preliminary research is arguably the most time-consuming yet necessary step in building your business case. Thorough research can ensure that you find the best solution with the data to prove its value to stakeholders.

Your research should consist of the following elements:

  • Needs assessment.
  • Market research.
  • Cost-benefit analysis.
  • Return on investment.
  • Company surveys.

Needs assessment and company surveys

A needs assessment uncovers the gaps between a company’s current and desired states. It helps you understand the severity of workflow inefficiencies and takes stock of what resources you have or do not have to make your ideal workflow a reality.

One of the main goals of conducting a successful needs assessment is understanding various stakeholders’ interest in new HR software and the problems it could solve. Consider asking questions like:

  • What process improvements do we need?
  • How often do we observe these needs?
  • What resources, if any, do we have to improve these processes?
  • How much time and money can we dedicate to implementing a new HR system?
  • How will we measure success?

Analyzing responses to these questions will help you determine the impact of new software, identify the resources you’ll need, and gauge how much support you’ll receive. You may find that new software is not a viable option for your organization currently or learn about other processes that teams would like the new HR system to optimize.

Market research

Evaluating various HR software vendors will help you determine the best option for your business’s goals and requirements. There are many avenues you can use to find the best software, including:

  • Reading industry reports or marketplace buyers’ and pricing guides.
  • Leveraging software comparison websites.
  • Participating in free trials or product demos.
  • Watching or listening to product videos or podcasts.
  • Reviewing product user reviews.
  • Calling sales representatives for feature explanations and quotes.

No matter what strategy you choose, the key is to construct a central database that keeps track of various platforms’ pricing, pros, and cons. This will make it easier to compare solutions and narrow down a winner as you continue your research.

The HR software market is highly segmented and competitive, but our team of experts is here to help. Browse our software guides to see our top choices instead of starting your research from scratch:

Cost-benefit analysis

Once you have found the perfect platform or narrowed down your list to a few options, perform a cost-benefit analysis to estimate expenses in the context of business impact. To calculate, use the following formula:

Potential benefits of the new software (profit) – total costs of the software = cost-benefit

Remember to consider the new software’s tangible and intangible benefits and costs. Some may carry more weight than others, so a shorter list of benefits can still outweigh the costs if they are significant enough.

The table below highlights a few examples:

BenefitsCosts
TangibleHigher revenue.
Reduced payroll, recruitment, and training costs.
Lower compliance risks.		Software fees.
Implementation costs.
Training costs.
IntangibleMore efficient processes.
Increased productivity.
Improved employee experience.		Data migration time.
Software maintenance and upkeep.
Impact on employee morale and workflows.

Return on investment

Return on investment (ROI) compares an investment’s profit gain or loss to its cost. It can help predict your new HR software’s success long-term.

To calculate ROI, use the following formula:

(Net return on investment/ cost of investment) x 100% = ROI

Cost-benefit analysis and ROI represent the same data in different ways. In the case of ROI, a negative ROI indicates a loss on your investment, similar to a negative cost-benefit analysis outcome.

Some stakeholders might appreciate seeing your HR software’s cost-benefit analysis while others may be more interested in the ROI, so including both in your business case is ideal.

3. Assemble your business case

After compiling your research, it’s time to start drafting your business case. Start with these sections:

  • Executive summary.
  • Risk analysis.
  • Cost overview.
  • Project timeline and governance.

Executive summary

The executive summary consists of one or two paragraphs that explain why you need to purchase this particular HR software. Ideally, it should briefly touch upon each section of your business case.

To help with the writing process, try answering each of the following questions in one sentence.

  • What problem will purchasing this software solve?
  • Why do you need to buy this software now?
  • How will purchasing this software address future business needs or problems?
  • How will this software improve business performance or reduce costs?

Risk analysis

Your business case should outline a list of expected risks when adopting the new software and how you plan to handle them. For instance, new software typically presents some of the following challenges:

  • Data security and information breaches.
  • Interruption of day-to-day business operations.
  • Loss of personnel data, files, or other documentation.
  • Need for additional equipment or training.

With each risk, propose a solution. For example, outlining your data backup procedure and migration plan is a great way to illustrate how you will limit the risk of data loss. Detailing these is vital since it demonstrates your research and preparation for as many variables as possible. 

Cost overview

Executive leaders will be particularly interested in how much the proposed solution will cost compared to alternative options and your current solution. You may want to review general estimates of how much HR software can cost before digging into particulars.

Remember to be honest in your answers and don’t understate the total costs to appear more favorable. Your overview should discuss expected and potential expenses and an estimated total cost. For example, the total price for your HR software could include:

  • Implementation.
  • Training.
  • Renewal or upgrade fees.
  • Add-on modules.
  • Data migration.
  • Additional hardware.
  • Ongoing maintenance.

Don’t forget to highlight the benefits too, like time saved from manual work or increased productivity. Use your market research, cost-benefit analysis, and ROI calculation to showcase the net positives the new software will have on the business’s bottom line despite a high upfront cost.

Project timeline and governance

When implementing any new software, it’s important to have a detailed action plan that aligns expectations around timing and responsibilities. For example, you may want to designate individual stakeholders to handle:

  • Account or system administration.
  • Purchasing.
  • IT assistance.

Next, outline the timeline for your HR software implementation process. A rough time frame for data migration, staff training, workflow testing, and rollout can help decision-makers feel more comfortable giving you the green light.

However, it’s important to clarify that precise timing is subject to several variables:

  • Software compatibility.
  • Business priorities.
  • Data structure complexity.
  • Volume of paper files.
  • Staff technical expertise.

In some cases, it may be worthwhile to present an alternative timeline that involves working with an external service provider. Although it can add a sizable cost, outsourcing software implementation may be more practical than handling it in-house, especially if your business’s needs are particularly complex or time-sensitive.

4. Present your business case

When you present your business case, be sure you have the following:

  • An elevator pitch.
  • Supporters.
  • Answers to anticipated questions and concerns.

Create an elevator pitch

An elevator pitch is a clear, three- to five-sentence summary of what the software does and how it addresses particular pain points for your company. The elevator pitch technique allows you to highlight the new software’s most crucial elements while respecting decision makers’ time.

You should also consider developing several elevator pitches to appeal to multiple stakeholders. For example, the CEO might find the new software’s analytics capabilities most important, while an accountant might like its task automation more.

Elevator pitches for each stakeholder can help you understand their primary concerns and prepare for any questions they may have. The elevator pitch also works in less formal settings, like in breakrooms, to grow support and enthusiasm for the new solution.

Recruit supporters

Ensure you have a few advocates when presenting your HR software business case. You’re less likely to sway decision-makers if only you’re the only person pushing for the change.

Even if you take the lead in presenting your business case, be sure to include evidence from the surveys you conducted to demonstrate widespread support. Executives and business leaders will be more likely to respond in your favor if they believe it will be a popular decision.

Address questions and concerns

Use the risk analysis and solutions you prepared to answer questions from various stakeholders during the presentation. You’ll also want to include relevant data to support your answers.

For example, if a stakeholder argues that the new HR solution will cause too much disruption to payroll processes during implementation, explain your gradual conversion process. Then, you can highlight how the software would save the team five hours on manual data entry each payroll run. So, even if there are hiccups during implementation, you can troubleshoot these problems and establish more efficient payroll processes in the long run.

HR software buy-in cheat sheet

Focusing on the data that supports your proposal is the best way to convince detractors to invest in the solution. Our buy-in cheat sheet below is a great way to prepare to address stakeholders’ concerns:

StakeholderAreas of concernQuestions they’ll haveHow to prepare
CEO and COOBusiness strategy.
Customer satisfaction.
Brand and image.
Growth goals.
Financial impact.		How will the software affect productivity?
How does this software impact our revenue?
How will this software help us achieve company goals?		→ Prepare cost-benefit and ROI analyses.
→ Detail a list of costs and savings.
→ Show the software’s price compared to competitors.
→ Outline the software’s data privacy and risk management features.
→ Detail how the tool will facilitate data flow between existing tech stacks.
CFO, accounting, finance, and payroll specialistsBusiness and labor costs.
Profitability.
Organizational risk.
Efficient workflows.		How much will this software cost?
How is this software better than our current system/competitors?
How does the software streamline processes and reduce compliance risks?
Can this tool integrate with our current payroll or accounting software?		→ Prepare cost-benefit and ROI analyses.
→ Detail a list of costs and savings.
→ Show the software’s price compared to competitors.
→ Outline the software’s data privacy and risk management features.
→ Detail how the tool will facilitate data flow between existing tech stacks.
HR and administrationLabor law compliance.
Employee health, safety, and wellbeing.
Business communication.
Policies and procedures.
Employee engagement.		How will this software make our processes more efficient?
How will the software improve company communication and employee experience?		→ Focus on features that reduce tedious tasks, like AI, automation, or services like tax filing, Provide data on time saved in different manual processes.
→ Note security and compliance features.
→ Outline features that improve company transparency and user experience, like collaboration tools or employee self-service.
RecruitersFinding and hiring top talent ahead of the competition.Candidate marketing.Brand and image.How can this tool make a more efficient hiring process?
How does this tool affect the candidate experience?
What is the onboarding process like for this tool?
Can this tool integrate with our current ATS or recruitment software?		→ If applicable, share features that make the hiring process more efficient, like AI recruiting and automatic interview scheduling.
→ Highlight ways the software can improve your brand image, like whitelisting, career pages, and email drip campaigns.
→ Outline how the tool improves the candidate experience during onboarding, benefit selection, or payroll.
→ Detail how the tool will facilitate data flow between existing tech stacks.
L&D teamsEmployee professional development.
Knowledge retention.Continuous training.Measuring and raising employee performance.		What does this tool provide in terms of L&D?How can this tool make our processes more efficient?
What training will employees need to feel comfortable using this tool for training and performance purposes?
Can this tool integrate with our current performance management and LMS software?		→ If applicable, share features that will make L&D more efficient, like automatic course assignments or AI course creation.
→ Explain the implementation process, including any software training materials provided by the vendor.
→ Detail how the tool will facilitate data flow between existing tech stacks.
IT, CIO, and CTOCompany data privacy.
Cybersecurity.
Technology maintenance.
Quality assurance for customer-facing technology.		What security standards does this platform have?
Are there any additional hardware requirements for this system?
What is the implementation timeline and how will it affect employee and customer technology?
Does the HR software vendor control implementation or will we?
What kind of system upgrades and maintenance should we expect?
Which platforms does this software integrate with?		→ Detail the security and data privacy standards the system maintains, like SOC Type 2, GDPR, or regular audits.
→ Provide an expected implementation timeline and IT responsibilities.
→ Learn what to expect from the vendor in terms of upgrade cadences and how it affects the software it integrates with.
→ Provide a list of vendors it integrates with, including if it has an open API.
General managers, supervisors, and mid-managersProject management.Workforce management.Cost savings.Analytics.How will this improve our day-to-day workflows?
How easy is this software to use and how long will it take to train employees?
Will our employees actually use it?		→ Provide examples, like automatic scheduling, workforce analytics, and AI assistance, that speed up manager administrative tasks and reporting.
→ Outline the implementation process, including employee training requirements, and any interruptions to work schedules.
→ Highlight employee-centric features, like company newsfeeds, self-service, and self-onboarding that will encourage employee use.
EmployeesDay-to-day work tasks and KPIs.
Professional development.
Access to personal data.
Ability to flag concerns.		How will this affect my day-to-day workflows?
Will I be able to access my data, like paystubs and benefits, when I need it?
Will I still be able to access the HR department when I have any concerns?		→ Highlight employee-centric features, like company newsfeeds and self-service, that will reduce the back and forth with HR teams.
→ Outline the ways the new tool will streamline workflows, like mobile data access, and communication.
→ Clarify your processes for responding to employee concerns and that the software won’t replace your HR team.

Challenges to getting buy-in for HR software

Compared to other business tools, HR software comes with many challenges that can make it difficult to secure stakeholders’ buy-in. By becoming familiar with them, you can prepare to address their reservations.

Many businesses consider HR a back-of-the-house department because it does not produce products or services that make money. As a result, business owners who believe HR departments to be a cost center might not understand the value of investing in HR software to reduce compliance risk, uncover workforce trends, and improve employee engagement and retention.

The most frequent users of the HR platform will be HR teams, administrators, and managers. Executive decision-makers’ priorities typically lie in business strategy, customer growth, competition, and revenue, so the software they use daily usually falls in project management, business intelligence, finance, and customer relationship management.

Because of this, it may be challenging to explain to executives how a new HR system could directly impact business objectives.

Even though only a few groups will use the HR software regularly, implementation can be a hassle since it has its hands in multiple business processes. For example, depending on the type of HR software you choose, it can affect payroll processes, workforce scheduling, time clock systems, performance management cadences, documentation workflows, onboarding, and talent acquisition.

The potential interruption to any or all of these functions can be a hard sell for decision-makers wanting to minimize the loss of productive work.