Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
Case Notes
Chapter 7: Cost Justifying HRIS Investments
Justifying HRIS for Investment Associates, Inc.
Case Summary
This case focuses on a Investment Associates, Inc.—a company that is in need of a more
Case Analysis
This case showcases the importance of an the need to justify the cost of HRIS investments.
Accurately identifying and estimating the value of the benefits and costs of new HRIS
Sample Answers to Case Questions
1. What are some of the ways you can use the HR metrics that would be available using
the HRIS to justify the purchase of an HRIS?
Most importantly, one could easily show that the time needed to complete
complex state and federal reports would be greatly decreased, thus allowing
2. In preparing a CBA for this project, what are some of the costs and benefits involved
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
in this investment in an HRIS?
Costs include installation support, software fee/license, software support,
analyst/administrator, training administrator, data entry, and lost productivity during
3. Explain how to estimate costs and benefits, both direct and indirect, in terms that Jim
will understand. (Remember, Jim always has his eye on the “bottom line.”)
One could complete this matrix in Figure 7.1 using the information available in
4. Explain how to calculate a CBA to justify the HRIS project. Would you use cost
reduction or organizational enhancement (or both) as a strategy for justifying the
purchase?
Both approaches should be used. If part of the company’s strategic plan was to
5. What are the three common problems that could occur in your CBA for an HRIS? How
would you avoid them?
1. Trying to justify a list of costs against a single benefit (e.g., better reports for
2. Listing some costs as direct cost reductions whereas they are actually indirect
cost reductions, such as employee time saved, for Jim, Marian, and Sylvia.
3. Be sure that value estimates assigned to time saved are reasonable. Many
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
6. Finally—and most importantly—explain how variance estimates that can generated for
a CBA would be useful to Jim in the management of his company.
Variance estimates can provide a range of expected costs and benefits of the new
HRIS, as well as average expectations. Benchmark data from other organizations