POD $2403\_1$ Assignment #$1$ HRIS

Justifying an HRIS Investment at Investment Associates Inc.

Case Study

Investment Associates, Inc. $($IA$)$ started a small firm in $2001$ with four employees plus its

owner, Jim Tower. The company specialized in providing financial investment and tax advice to

its clients. Jim had brought a substantial number of clients from his private practice, which had

become too large for him to handle by himself. His four employees included three colleagues

who had some experience in financial investment advice and a secretary$/$administrative

assistant. Jim and his three colleagues were all certified public accountants $($CPAs$),$ and a

considerable portion of the company$$s business was in tax consultation and the completion of

individual and corporate tax returns.

IA was quite successful and, by $2007,$ had added $42$ new employees $-$ financial and tax advisers

and additional administrative staff, including an office manager, Marian Sweet. In addition to

the office manager$$s supervisory tasks, Marian had to complete federal and provincial reports

on the employees as required by law. However, Marian was not trained in HRM$,$ and she

suggested to Jim that the company needed to hire someone with a background in HRM before

they $$got into trouble$$ with the government. Marian was particularly concerned about gender

and racial discrimination but did not understand how to apply the provisions of the appropriate

laws and guidelines.

In November $2007,$ IA hired Sylvia Wong, who had an undergraduate degree in psychology and

four years of experience in HR$.$ In addition, in December $2007,$ Jim was negotiating to purchase

the financial consulting business of an old friend who was retiring. This purchase would mean

the addition of $17$ new employees in February or March $2008.$ Sylvia met with Jim in midJanuary $2008$ to discuss the growing burden of employee reports and payroll processing, all of

which were currently being done using a paper$-$based HR system. She advised Jim that the

company needed an HRIS to process employee records and complete the required government

reports. As an example, she stated that, because she had to search through paper copies of all

employee files, it took her a full week to complete the Pay Equity Report required by the

provincial government. Furthermore, based on this report, it appeared that the company could

have problems in terms of compliance with several federal laws. She suggested that the

HR Analytics POD $2403\_2$

HR Analytics POD $2403\_2||$ Assignment #$1||$ January $27$

th$,2024||2024$ LAMBTON COLLEGE IN TORONTO

company purchase an HRIS to assist with company record keeping and the production of

required reports.

Since the company had been using computer$-$based applications for financial analysis and tax

reporting, Jim thought that Sylvia$$s suggestion to computerize employee records was a good

one. However, given his financial background, he wanted Sylvia to develop a business case,

including a cost$-$benefit analysis, for the purchase of an HRIS.

Your task is to help Sylvia justify the purchase of an HRIS by answering the following

Questions:

$1.$ What approaches to justifying this investment might Sylvia consider?

$2.$ What are some of the costs and benefits involved in this investment in an HRIS? Which

would you be sure to include in your Cost$-$Benefit Analysis of this project and why?

$3.$ 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.$)$

$4.$ Explain how to calculate a Cost$-$Benefit Analysis to justify the HRIS project. Would you use

cost reduction or organizational enhancement $($or both$)$ to justify the purchase?

$5.$ What three common problems could occur in your Cost$-$Benefit Analysis of an HRIS? How

would you avoid them?

$6.$ What are some of the ways you can use the HR Metrics that would be available after the

implementation of an HRIS to justify its purchase?

$7.$ Finally, explain how variance estimates that can be generated for a Cost$-$Benefit Analysis

would be useful to Jim in managing his company.

Reference:

Johnson, R$.$ D$.,$ Carlson, K$.$ D$.,$ & Kavanagh, M$.$ J$.(2021).$ Human Resource Information Systems. $5$th