Transitioning from Manual FMLA Tracking to a Cloud Solution: Part III
Step 4: Establish the business case
The most effective way to do that, whether you’re required to provide it or not, is to present a business case for your sought-after solution. It will demonstrate forethought, planning and evaluation that will improve your chances of getting the purchase approved.
Whether your business case with be a simple one-page document or a complex report, we recommend you include the following three components to make the strongest case possible:
• Document the opportunity for improvement • Measure expected financial impact • Be guided by your overall vision
DOCUMENT THE OPPORTUNITY FOR IMPROVEMENT You should begin by asking questions your senior team might ask, such as ‘How do we operate today?’ or ‘Why do we need to change?’ The answers to these questions will not only document your business problems but will be the catalyst for change. It is telling to indicate that current processes are epitomized by self-generated spreadsheets and that no standard method or tool exists for absences associated with the FMLA. The ability to provide basic summary leave of absence statistics or comparative leave specialist caseload measures to management is often impossible because time is spent on inefficient, untracked efforts. When process dictates and dominates delivery and management of the benefit, only hassles can result.
Also important is detailing any inconsistent application of company policies and/or state and federal laws, not because of neglect of duties, but due to outdated work structures. Whatever you accomplish in documenting the opportunity for improvement, you must disrupt the thinking, assumptions and understanding of decisions makers. If they aren’t shaken, the likelihood of change is minimized.
MEASURE THE FINANCIAL IMPACT While calculations of financial impact vary, it is still good to calculate a prospective Cost/Benefit ROI for any hosted cloud solution you have investigated. Since the FMLA does not involve wage replacement cost, any estimate of savings will be based on indirect cost saving factors. One primary factor is the gain in productivity resulting from a reduction in FMLA absences and employees returning to work in a timely manner. A positive cumulative effect results from both the employee returning to his job sooner and other employees being able to focus solely on their regularly assigned duties.
One Optis case study projected annual savings in the reduction of FMLA days of 5% over a four-year period after implementation of a hosted cloud solution. For an employer with 5,000 employees, which also averages 3.5 FMLA days per employee per year, a 5% savings corresponds to a decrease of 875 FMLA days for one year. Including other productivity factors, we would then expect indirect cost savings to total approximately $200,000.
In order to calculate an ROI, we must also consider the cost of the investment. Costs of hosted cloud solutions are typically based on the number of users. Assuming a multi-user investment cost of $10,000 per year, the return on investment, in this example, would be just over 19:1, or a return of $19 for every $1 invested in the solution1. So, consider the investment, predict the savings, and your ROI estimate will provide substantial evidence in building your case.
BE GUIDED BY YOUR OVERALL VISION Sometimes, when taking in feedback from various stakeholders, varying opinions on important features pop up. Evaluation of features is important and should factor into the decision-making process. But, it is more important to value a solution that provides a superior user experience, which not only streamlines and automates the experience of the leave specialist but maximizes long term engagement with the product.
A great solution should be so good at removing the complexities of your existing work environment that when you’re involved in the everyday tasks of leave management your work occurs so seamlessly that you don’t even realize and aren’t even aware of all that you’re accomplishing. In other words, the aspects of work, which previously were so draining and felt lengthy and somewhat overwhelming, now are simplified and are not weighing you down.
1 This ROI estimate and these cost savings are projections only and will vary from one company to another.