Objective: Outline the differences between cost reduction and organizational enhancement as strategies for HRIS investments. Describe how this relates to the integration of the HRIS within the organization.
Strategies for justifying HRIS investments divide into two different types-risk avoidance and organization enhancement. Risk avoidance is always used when an organization’s investments are believed to eliminate or mitigate important potential risk in the future. Risk avoidance justifications focus on the magnitude and timing of risks and often are not supported by the extensive investment analyses required by a CBA. In addition, organizational enhancement strategies highlight how effectivement of the firm will be improved by the addition of a new or improved HRIS-as measured by increases in revenues or reductions in costs. Organizational enhancement justifications should often challenge to “sell” to decision makers. Organizational enhancements do not relate to real loss if no action is taken. As a result, cost reduction is a significant part of organizational enhancement. When there is a slump in the economy, businesses become highly concerned with cost reduction and seek the fastest way to cut costs. Companies are finding it difficult to retain people and are lying off people which are unprecedented in recent history of industrial recession. Companies have to develop its own cost reduction program for savings without cutting jobs. Cost reduction can be achieved through reduction, elimination, modification of manufacturing activity. There are various areas to implement cost reduction, such as raw material procurement, logistics (inbound and outbound) and so on. It will help companies and organizations to improve their profits, increase productivity and competition, reduce waste, etc. An effective organizational enhancement process should help organizations to be their best. Most organizations struggle with keeping up with changing priorities. Generally...
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