Oracle uses SA-developed analysis tool globally to show companies ROI on HR systems investment

Oracle`s South African centre of Human Resources Expertise has developed a return on investment (ROI) analysis tool that Oracle account managers and partners worldwide are now using to illustrate the bottom line benefits of a fully integrated human resource management system implementation.

HRMS Value Impact Analysis (VIA), which is based on internationally recognised measurement standards such as Saratoga Benchmark Measures and Calculations, was developed initially to help Oracle SA customers justify the investment needed for making the move to integrated HR.

The HRMS VIA tool, which was developed by Stegmann`s SA team, has now been patented internationally and is being used by Oracle and its partners worldwide for ROI calculations.

The analysis is based on detailed input supplied by the customer covering areas that include financial information relating total revenue and the salary bills of staff, management, line staff and HR, number of employees in the different categories and administration information such as HR reporting and printing costs.

The calculations produced illustrate the potential impact Oracle`s HRMS suite could have on the operational efficiencies from a HR perspective.

"Cost was and still is, a major barrier in the HRMS market in SA. Many companies put off making the investment because they still consider HR to be a back office function with little or no effect on the business," says Gerhard Stegmann, HRMS product manager at Oracle SA.

"We needed a tool to help HR get the value message through to the financial management. Our approach was to ignore the hype around HR and bring it down to a rands-and-cents issue."

In doing so, Oracle has proved to numerous companies locally and internationally, that HRMS can impact the bottom line dramatically.

"There is no denying that HR is regarded as a non-value-add function by most business managers, but now we can prove that, far from being a drain on company resources, HR can directly impact the bottom line," adds Stegmann.

The result of the analysis showed that, in most cases, the cost of implementing Oracle HRMS could be recouped within six months after implementation, totally dispelling conventional thinking that HRMS was a necessary operational overhead that had to be written off over three years.

"In fact, the benefits are so dramatic that we have tended to adjust our findings downwards to make them more credible," he says.

Most companies have vast teams of administration staff doing HR and payroll, with line management resources involved in processing HR matters such as leave and training.

By automating and streamlining such HR processes, significant savings can be realised in the more productive use of administration staff, while line and HR management becomes a much more collaborative process. At the same time HR management executives are freed to become strategic partners in the business rather than back-office administrators.

"When we analysed all the data, the results were so impressive we realised that we had a tool that could be used to help companies anywhere in the world make a business case for investing in HRMS," says Stegmann.