How to Build a Business Case for New Technology

CHICAGO—As a vendor, Joe Rotella, SPHR, fields lots of inquiries from HR professionals buying products and services. So when it comes to presenting a business case for new technology, the chief technical officer at Delphia Consulting LLC knows just how to do it. And he shared that advice with Society for Human Resource Management (SHRM) 2013 Annual Conference & Exposition attendees at a Monday session titled “Technology Meets HR: Selecting and Justifying the Right Solution.”

Regardless of whether you’re buying a color printer or an HR information system, creating a business case remains the same, he insisted. It starts with these seven steps:

Complete a self-assessment and an internal needs analysis.

Rank requirements based on organizational impact.

Identify potential solutions—narrow the field.

“Get real” with providers—that is, share your “real” budget, he said. “If you are uncomfortable telling the provider about your budget on the phone, ask for another rep or cross that provider off your list.”

View demos from promising providers. Narrow your choices down to one or two vendors. “Invite that couple of vendors in for a demo,” he said. “Write a script for the demo. Write a story: Say, we’d like to see the following kinds of transactions.”

Score solutions based on requirements. Create a spreadsheet of selection criteria. Invite your entire selection committee to participate in the demos and have them rate the providers. Use the ratings to select the vendor.

Select a desired solution—and make the business case.

After selecting the vendor, ask for a proposal with prices and other details. As a courtesy, “tell everyone else who has been in the game that they didn’t win,” he suggested.

Then move forward to implementation planning.

Rotella’s definition of a business case: a structured proposal for business improvement that functions as a decision package for organizational decision-makers.

In effect, he said, “It’s a marketing document, a persuasive document that persuades business leaders to give you the thumbs up.”

Rotella recommends using a business case template by the University of Auckland in New Zealand. This outline starts with an executive summary explaining “why you are looking to change now.” Other components of a business case include the opportunity, associated needs or problems, solution, benefits, background and cost analysis. It should cover other possible options—such as doing nothing—as well as specific exclusions in the proposal, constraints and security issues.

He advised attendees to gain executive buy-in early for change initiatives. “Most officers do not like surprises.”

Finally, in a business case, the writer needs to document the proposal’s return on investment. Rotella suggests figuring ROI as equaling the payback period for the investment. However, many purchases yield intangible benefits that prove hard to measure, such as time savings.

In reality, return on investment has three perspectives: financial, cultural and processes, he concluded.

Nancy Davis is editor of HR Magazine.