Business cases are essential tools used to convince an organisation’s stakeholders to invest in a particular project. A business case should demonstrate the project’s potential Return on Investment (ROI) and outline its risks.
This blog post will explore how to make a business case for a new Workforce Management software, the purpose of a business case and the steps needed to write a compelling argument to justify implementing a new WFM system. We’ll cover how to assess the current situation, analyse the need for a new system, calculate the ROI, and mitigate potential risks.
Once you are ready to write your business case, we have a Microsoft Word template, which you can download and will save you considerable time.
Let’s explore each step in more detail below.
1 – Executive Summary
Your executive summary should summarise the key points of the business case for a new Workforce Management software. It should restate why you are proposing a new workforce management system, highlight the significant issues you are experiencing now and describes any expected benefits. The executive summary should outline your recommendations and the expected return on investment for the project.
2 – Identifying issues with your current system and processes
The first step in creating a business case is identifying the problem the new WFM system intends to solve. To do this, you will often require an assessment of the current situation to determine the areas where the existing system is falling short. You can do this by analysing your current system’s performance, productivity and cost-effectiveness. Problem areas we often see are:
- High cost of administration
- Poor compliance record
- High levels of time fraud
- Low levels of control over budget
- Poor matching of staff levels to customer demand
- A high number of payroll errors
- Unfair rotas that don’t take staff preferences into account
- Poor staff engagement and, in turn, retention
The identified list of issues is similar to a new system’s potential benefits. You should ideally be selecting a workforce management tool that fixes all of the issues identified.
3 – Costs and impact of not making a decision
Once you have identified the issues with your current process, you should document what will happen if you don’t make changes. You should do this in relation to the strategic goals of the organisation. For example, suppose you are targeting growth in revenue of 5% per annum. In that case, failure to address “poor matching of staff levels to customer demand” may mean that you will not be able to achieve your corporate objectives.
4 – Objectives for the proposed solution
To make a business case for a new Workforce Management software effectively, you want your objectives to be SMART. (Specific, Measurable, Achievable, Relevant, and Time-Bound). They are likely to relate to the key issues that you have uncovered. For instance:
- Reduce the costs of employing hourly paid staff by 4% in 2023.
- Improve the accuracy of the labour demand curve from 88% MAPE to 95% MAPE within three months.
- Achieve 97% staffing to the demand curve in 2023 across all venues.
- Increase sales in 2023 by 5%.
5 – The proposed Workforce Management solution
Since the purpose is to make a business case for a new workforce management software, you should document the proposed solution, including details of the company and the proposed configuration. Most workforce management suppliers offer a wide range of modules, and each one will help you achieve specific objectives. You should list the available modules, whether you are proposing that they are taken and what you expect to gain from using each of them. For example, if you have a working time directive compliance issues, you will likely want to take the vendor’s most advanced compliance offering.
6 – Commercial summary for the proposed workforce management solution
Here you should summarise all of the key commercial arrangements you are asking to be approved. You should include the following:
- Implementation costs
- Hardware costs
- Integration costs
- Software rental costs
- Automatic price increases
- Term
- Estimate of Time to Value
- Automatic contract renewals
- Break options
- Termination
- Levels of liability for both parties
- Insurance cover
- Any additional charges such as support fees, ongoing maintenance etc
7 – Alternatives considered
You should document all the alternatives to your proposed solution and why you have decided not to go with them. As well as other providers, options could include doing nothing or improving your current system.
8 – Pilot costs and ROI from the pilot
If you are doing a pilot or trial, what will it cost, what do you aim to achieve, and what is the committed cost for doing the pilot? This amount is the minimum charge that your organisation will have at risk. If the pilot fails, you will want to walk away and write this off.
In a separate article, we have written about calculating ROI, including the ROI for a pilot, which should help you with this step.
9 – Establishing the overall project Return on Investment (ROI)
As you can imagine every business case for a new workforce management software is important to calculate the projected ROI. An ROI is essentially the ratio of benefits to costs, and we have written a detailed article on how to calculate it, which you can find here. You will need to estimate the value of the benefits that the new system will bring you and calculate the exact costs.
Our Excel Spreadsheet ROI calculator will do all the necessary calculations you need. Our Microsoft Word business case template includes a table to present all of the required calculations to justify your investment in a workforce management system.
10 – Establishing the ROI for any reduction in Risk
A Workforce Management system will help you reduce risk to the business in a number of ways, and it is important that you generate an ROI for the reduced risk. We have written a blog article specifically on this subject, and of course, as already mentioned, our Excel Spreadsheet ROI calculator will do the relevant calculations for you.
11 – Mitigating Potential Risks
Finally, it is essential to consider any potential risks associated with the new system. These include the risk of not delivering the expected ROI, the risk of poor implementation, and any other risks that may be mitigated by the new WFM system. Your business case for a new workforce management software should outline a plan for mitigating these risks to ensure a successful implementation.
You should also run different ROI sensitivity tests to see if you still get a positive ROI if you deliver 15% fewer benefits or spend 25% more on implementation. Your finance director should be able to help you with the correct sensitivity levels, and our Microsoft Excel Spreadsheet ROI calculator can do all the calculations for you.
12 – References
It is good practice to list the sources you have used to derive any assumptions. We have included some useful links in our Microsoft Word business case template.
13 – Conclusion
As you can see from the required content to make a business case for a new workforce management software forces you to gather a lot of information and thoroughly evaluate the current issues, set objectives and assess solutions.
The very act of going through this exercise means you should be well prepared for your workforce management implementation and are much more likely to have a successful project.
Related articles
How to calculate the ROI from a Workforce Management system?
ROI from risk reduction provided by Workforce Management Software
ROI calculator for Workforce Management Software
Business Case Template for Workforce Management Software
How to calculate the Time to Value for WFM software implementation?
