Software Futures, the wholly owned business software solutions subsidiary of the JSE-listed MGX Group, is expecting to recoup its investment in Oracle's human resources solution within a year.
According to independent research - and that of Oracle itself - this is the period in which global companies are realising a positive return on investment (ROI) in the Oracle HRMS solution, which forms part of a multimillion-rand Oracle eBusiness suite being implemented by Software Futures.
"For a company such as ours with which has grow rapidly to the 500 people level, maximising productivity while maintaining high knowledge and skill levels is a priority to ensure we remain competitive. The integrated modules of the HRMS solution gives us the foundation on which to build our people-oriented business, and the pay-back projections are very impressive," says Alan Gibbons, general manager at Software Futures.
A report by The Hunter Group estimates that an investment in self-service HR can deliver an ROI in one year, with 75% less administrative work, 60% reduction in administrative costs and 50% increase in employee satisfaction. Oracle's own HRMS Value Impact Analysis puts ROI at less than a year - typically only about eight months.
"The savings arising from individual components such as self-service and HR intelligence are even more impressive," says Sandy Redgate, alliance account manager, Enterprise Sales at Oracle SA.
"Then you're looking at a savings ratio of four-to-one in the first year, with the main savings being made in reduced turnover rates throughout the organisation and an improved HR to management/staff ratios."
Self-service HR removes much of the mundane, administrative chores many HR executives have to perform routinely. With self-service, HR functions such as leave applications, training scheduling and expense claim progressing can be done via an Intranet with the employees initiating the document flows electronically.
In typical HR implementations, Oracle estimates that for an initial cost of about R250 000, self-service results in HR management-to-staff ratios savings of R228 000 in the first year with a further R20 000 saved on reports production, R330 000 in turnover rates, R18 000 on staff training and R20 000 on productivity improvements.
In the case of an HR Intelligence suite also costing about R250 000, projected savings in the first year include R130 000 on HR/staff ratios, nearly R100 000 on reports, R400 000 on turnover rates R230 000 on modelling and more than R50 000 on productivity improvements.
These savings were only part of those quantified for self-service HR and HR intelligence and do not take into account similar savings realised from other HR components. Only the payroll suite did not cover initial costs within the first year. But even then, projections were for a full payback with 14 months.
"Bearing in mind that HR is just one component of our targeted implementation, you realise that the value proposition from the Oracle eBusiness Suite is compelling," concludes Gibbons.
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