Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
Sample Answers to Discussion Questions
Chapter 7: Cost Justifying HRIS Investments
1. How has the use of HRIS evolved over the past 10 years in organizations, and how
might this influence an organization’s evaluations of additional or an updated
investments in HRIS?
Ten years ago (1990s), the use of an HRIS was primarily focused on cost
savings (e.g., reducing transaction time and costs) and risk avoidance (e.g.,
2. Why is it important to estimate the benefits to be derived from new HRIS
functionality before you estimate the costs? If costs were estimated first, how might this
change the analysis?
Estimating benefits first provides a critical aspect of the business plan for the
new HRIS and sets the boundaries for its functionality. Thus, this allows costs
3. Organizations have traditionally used employee time saved as the primary source of
benefits in justification of HRIS and other types of information system investments.
Why can this be problematic? Give several reasons, and relate them to conducting a
CBA.
Frequently, organizations measure employee time saved by estimating an
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
4. What are the direct and indirect benefits of a new HRIS that decrease the transactions
of the HR department by creating employee portals (see Chapter 10) and allow HR
employees to work on other projects like talent management or online recruiting?
Referring to Figure 7.1, the direct benefit would be that the other projects would
be available sooner than expected and the project quality should improve. The
5. What makes indirect benefits so difficult to include in CBA? What techniques might
be used?
Indirect benefits are more difficult to obtain than the hard data for direct
benefits. Estimating indirect benefits requires assumptions about the impact of a
6. When should benchmarking be preferred to direct estimates of the magnitudes of
benefits? When should direct estimates be preferred? Is it appropriate to use both?
The primary limitation of direct estimation is that the accuracy of the analysis
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
7. Why does average employee contribution offer a better estimate of the contribution
of individuals to an organization than total compensation (wages, incentives, and
benefits)?
It provides a measure of the contribution of each employee to the organization’s
8. What are the factors you would have to use in calculating a cost–benefit ratio to
support a decision to purchase a new HRIS when the organization already has an HRIS
that was acquired 10 years ago? Be sure to mention the factors that would comprise the
costs, direct and indirect, and the benefits, direct and indirect, of the current system
versus the proposed system.
Direct costs: Employee time on a task force to develop a project plan for the
acquisition; costs of new software and hardware; cost of hiring an external
9. Develop an argument for the implementation of an HRIS using a risk reduction
strategy and an organizational enhancement strategy.
Risk avoidance strategies are used when investments are believed to eliminate
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018