This is a business plan for Click, a company that deals with the HR system.
Organizations require robust HR Systems to carry out human resource management functions effectively and efficiently (Shacklett 1). Click incorporates comprehensive approaches into the HR System to address the day-to-day management of employees and other aspects of business operations.
First, the Click HR system clearly outlined procedures will aid employers to adhere to preeminent practices in Human Resource management in manners compliant with global legislation regarding employment and workplaces physical environment. Therefore, subscribers will evade fines and penalties associated with legislation contravention.
Second, the Click HR system will help users achieve the efficiency and effectiveness of employees while maximizing profit. The HR system will guide users through hiring and job allocation processes. To enhance productivity, the best talents and qualifications will be allocated to particular jobs. Additionally, the system cut on extra costs associated with human resource management by virtue of its ability to access essential HR tools with ease and speed.
Third, the Click HR system links employers to a pool of HR management experts, which are ready to respond to queries, give appropriate advice, and support where necessary. Access to experts is enhanced by the use of Internet platforms.
Fourth, the Click HR system allows the employer to keep relevant and crucial employees’ information. Additionally, the safety and security of information are guaranteed by deliberated efforts to liaise with one of the world’s most secure data centers. Further, employers have easy access to information from any location at any time provided there is Internet access. In addition, the privacy of classified information is enhanced.
Description of Business
Organizations that can use Click HR system
Click HR system is based on comprehensive and in-depth research on the dynamics of modern human resources, and it is, therefore, pertinent to a myriad of organizational HR management issues. Some of the organizations that will find the HR system crucially relevant include small to medium scale businesses, franchises, government, and enterprises, among others.
By virtue of their small sizes and relatively small profit margins, it is difficult for small-scale and medium-scale businesses to employ or hire HR professionals. However, they must take care of their employees’ welfare (Das, Narendra, and Mishra 183). Therefore, the Click HR system meets the needs of small-scale to medium-scale businesses in an incredibly simple and affordable way by providing relevant tools and resources to manage employees.
Macro businesses and governments
Big business and governments have developed HR frameworks with HR professionals. However, most of them face challenges in achieving regulatory compliance and performance maximization (Shacklett 1). Therefore, HR professionals working for macro businesses and governments require precise and effective tools and resources (Shacklett 1).
Click HR system will help enterprises and government HR departments to enhance efficiency and effectiveness through the following. First, the system will seal loopholes in security and information protection by using one of the best security technologies.
Second, the Click HR system will centralize HR records, which in many enterprises and governments are scattered and, hence, make access and retrieval processes easier. Third, Click HR system will empower the management to manage employees’ lifecycle effectively from hiring to exiting. The system will also help in the integration of payrolls and attendance, further enhancing efficiency and accountability.
Products and Services
The essence of HR management is to streamline the workforce, ensuring that optimization is obtained from each employee and then give fair remuneration. Therefore, the Click HR system is important because it can synchronize employees’ data on qualification and job description, working hours and attendance registers, and payroll systems.
Optimization of employees is realized only if they are at work, during all their working hours. Therefore, the Click HR system has integrated mechanisms to enable any HR department to monitor employee check-in and check out. Users of this system can also observe working hours factoring in late coming, truancy, and overtime. The data collected data can be used in the determination of pay, rewarding every minute of overtime while cutting pay for every minute of late coming and truancy.
Click HR system enhances the organization of payroll system with clarity in remuneration as per job groups, assignments, and contractual jobs.
Further, the system has payroll software that harmonizes all payroll elements, which include awarding of bonuses, loan issuance and repayment, advances, deductions to cater for damages, income tax, and deductions, and issuance of payslips. Users can also keep records of salary structures and automate complex payroll allowing ease in the calculation of salaries and identification and elimination of errors.
Click HR system will help organizations manage employees’ data, which in the era of Big Data has led to tremendous changes in HR departments (Zang and Ye 41-45). The HR system allows users to gather employee data through employee profile updates with information including, addresses, phone numbers, departments, bank details, and job descriptions.
Click HR system makes it easy to access the employees’ information with capabilities of filtering employee data based on job groups, job descriptions, departments, and nominal alphabetical order. Importantly, it is easy for existing employees’ data to be transferred to the Click HR system. Hence, there is no data loss during data transfer processes.
Market analysts have shown that the HR solution market is expected to grow at nearly a compound yearly growth rate of 2.4 percent, attaining $9.2 billion by the year 2020. However, they have also noted that insignificant growth has been noted in the traditional sections of the HR system solutions. These are mainly attendance, time, payroll, and employee benefits management. Nevertheless, these segments of HR solutions still claim a large and vibrant portion of the market.
It has been noted that talent management segments are now responsible for the growth in HR solutions. These segments include “recruiting, training, performance management/BI, and leadership/succession management, as well as by shift to software-as-a-service (SaaS) model” (Bersin 1). As such, a strong, unexceptional wave of consolidation has taken place in the HR system market in the past few years.
It is observed that large ERP software vendors have adopted a double strategy to acquire small HR software vendors. These include the following:
- Expansion alongside the integration of the latest best-in-class HR platform functionality into existing all-inclusive service and product offerings
- Focusing on a wider ERP service or product offerings by HR platform loopholes
The market is poised for growth as opportunities continue to manifest themselves, while vendors and organizations are willing to embrace technologies that are more robust in HR management. According to an estimate provided by Bersin, “more than 450 million people around the world could license and use corporate HR software, yet only 55-60 million seats have been sold” (1).
This implies that the HR system market is still underdeveloped. In addition, every year, vendors and organizations continue to develop new segments, which drive market expansion and size. Apart from the above-mentioned segments, other new hottest HR management solutions include:
- Big Data tools, social recruiting platforms, commonly referred to as the new generation of recruiting applications
- Mobile apps, including recruiting, social collaboration, learning and employee management
- HR analytics that focuses on Big Data software to analyze labor market trends, advertisement, and recruitment
- Modern tools to facilitate knowledge management, collaboration, social learning, and training management
Talent Management Software
It is most likely that organizations will continue to focus on talent management solutions. Analysts have predicted that the market for talent management solutions will continue to grow significantly. In the year 2013, a growth of 17 percent was noted (the market size is currently over $5 billion).
The fundamental driver is talent optimization. Organizations have now acknowledged that talent optimization is a vital factor for success. They can only realize talent optimization through integrated software, which can help manage employees and work processes in an organization. With all these fragmented platforms, there is a requirement for a robust, organizational-wide system that allows workers to manage their roles and assists executives in managing their employees.
Initially, talent management software, as developed by Authoria, focused on offering an integrated system for managing all aspects of HR functions, including recruiting, retention, training, and performance management, among others. Today, however, the HR management market has transformed. HR managers alone no longer use talent management software. Instead, new users have emerged among employees, managers, and senior executives.
Competition / Vendor Landscape
One notable trend in the vendor landscape is an acquisition. Well-established technology firms quickly acquire small, emerging, fast-growing developers. For instance, Pathlore, Taleo, and SuccessFactors, among others, have been acquired, but some vibrant, innovative HR solution developers still exist. Consequently, HR departments can select their preferred solutions from plenty of vendors.
SAP, Oracle, IBM, ADP, Workday, and CornerstoneOnDemand are the major players in talent software solutions. In addition, other highly innovative firms such as Halogen, SumTotal Systems, PeopleFluent, Saba, and Ultimate Software, among others, have also claimed a section of this market. Organizations with more than 200 employees may find talent management software to be extremely useful.
The market of 400 million end-users is big, and, therefore, some firms such as Ultimate and Halogen concentrate on mid-market organizations. On the other hand, large firms such as Workday, Oracle, and SAP, among others, target big organizations. It has also been observed that developers that concentrate on large firms have often not been able to develop solutions that can cater to the needs of small firms. That is, such solutions should be much simpler to execute and relatively affordable.
Click Sales & Revenue
Click HR system sales, and the revenue model is hybrid. With Software-as-a-Service (SaaS), the largest sources of sales and revenues would be maintenance and support, as well as Software-as-a-product (SaaP) revenue. Other revenue sources emanate from the ecosystem (Popp 1).
The hybrid model will ensure that that Click has a constant stream of revenues that can be used to improve existing HR solutions and develop new ones. Besides, these revenues can be used for other purposes, including acquisition to grow sales and revenues.
Click Expected Sales and Revenues
|Revenues realized from SaaS||$ 150,000|
|Revenues realized from SaaP||$ 120,000|
|Revenues realized from the Ecosystem||$ 80,000|
|Revenues realized from Maintenance||$ 500,000|
|Revenues realized from Support||$ 800,000|
|Revenues realized from Consulting||$ 300,000|
|Revenues realized from Software Customization||$ 235,000|
|Total revenues||$ 2,185,000|
Financials for Five Years
Click Pro-forma Income Statement
Pro forma financial statements are necessary elements of the strategic planning and yearly budgeting processes for the Click HR system (CMA Canada 1-12). In essence, these statements will provide financial projections for the Click HR system for the next five years.
|Sales and revenues||$ 2,185,000||$ 2,403,500||$ 2,691,920||$ 2,961,112||$ 3,494,112|
|Cost of goods sold||$ 5,000||$ 7,000||$ 9,100||$ 11,375||$ 14,446|
|Gross profit||$ 2,180,000||$ 2,396,500||$ 2,682,820||$ 2,949,737||$ 3,479,666|
|Total expenses||$ 1,345,800||$ 1,413,090||$ 1,519,072||$ 1,640,598||$ 1,796,454|
|Profit before taxes||$ 834,200||$ 983,410||$ 1,163,748||$ 1,309,139||$ 1,683,212|
|Taxes||$ 83,420||$ 82,169||$ 83,812||$ 83,812||$ 83,812|
|Profit after taxes / Net Income||$ 750,780||$ 901,241||$ 1,079,936||$ 1,225,327||$ 1,599,400|
- It is projected that sales and revenues will grow by 10 percent between the fiscal year 2015 and 2016, 12 percent in 2017, 10 percent in 2018, and 18 percent in 2019.
- Cost of goods sold will increase by 28.5% in the fiscal year 2016, 30% in 2017, decline by 25% in 2018 and rise by 27% in 2019
- Gross profit will increase steadily after subtraction of the cost of goods sold
- Total expenses will continue to increase as follows: 5% in 2016, 7.5% in 2017, 8% in 2018, and 9.5% in 2019.
- Profit before taxes will continue to rise as shown in the above table
- Taxes are expected to fluctuate as the government introduces new economic reforms in the ICT sector: a decline by 1.5% in 2016, an increment by 2% in 2017, no change in 2018 and 2019.
- Profit after taxes/Net Income will rise steadily
Click Balance Sheets
As at December 31
|Current Asset||$ 80,000||$ 92,000||$ 90,000||$ 112,457||$ 130,000|
|Capital Assets||$ 130,500||$ 129025||$ 146,497||$ 147,689||$ 158,762|
|Total Assets||$ 210,500||$ 221,025||$ 236,497||$ 260,146||$ 288,762|
|Liabilities & Shareholders’ Equity|
|Current Liabilities||$ 83,000||$ 78,675||$ 69,638||$ 85,054||$ 92,875|
|Long-term Loan||$ 26,000||$ 11,893||$ 10,124||$ 15,092||$ 33,542|
|Total Liabilities||$ 109,000||$ 90,568||$ 79,762||$ 100,146||$ 126,417|
|Shareholders’ Equity||$ 101,500||$ 130,457||$ 156,735||$ 160,000||$ 162,345|
|Total Liabilities & Shareholders’ Equity||$ 210,500||$ 221,025||$ 236,497||$ 260,146||$ 288,762|
- Total assets will continue to grow at the rate of 5%, 7%, 10% and 11% for fiscal years 2016, 2017, 2018, and 2019 respectively
- Total liabilities and shareholders’ equity will continue to rise as Click accumulates liabilities while shareholders will continue to fund the company for expansions and other related activities, including R&D on HR platforms and their capabilities
Performance or Delivery of Services
The click will ensure that performance or delivery of service is realistic and meets the expectations of customers. Hence, the schedule will not be impossible to attain. As such, the delivery of service will be consistent with customers’ needs and policies. At the same time, performance will be managed to control the costs of operations and, therefore, avoiding high costs.
Timely delivery of services and products will be critical for Click acquisition of the market share, sales, and revenue growths. The company will consider specific applicable elements, including customer agency, established industry practices, prevailing market conditions, software development lifecycles, and provide capabilities for different business needs.
It is expected that the organization would eradicate current manual paper practices and processes and adopt a modern Click HR system for HR operations.
The Organization Five Years after Implementing Click HR system
Click HR system is expected to transform the organization positively, specifically the HR department. First, it would enhance the involvement of managers and employees to develop business cases and enhance governance. As such, it will result in business alignment. Second, the organization would have advanced employee-planning capabilities through integrated advanced forecasting and employee analytics.
Consequently, the organization would transform its talent, data, and external knowledge into valuable insights for decision-making. Third, the Click HR system will facilitate the right HR narratives. That is, creating an environment of collaboration and employee personal development while ensuring organizational success. Fourth, the Click HR system will significantly reduce administrative work for HR managers and related business leaders.
Thus, it is intended to create a high-impact HR department that can support decision-making, enhance relationship and collaboration, and provide the right talents and leadership. Fifth, it would allow an organization to create a flexible and agile HR design. That is, the department would be highly adaptive to enhance excellence through flexibility in HR structures and change management.
Sixth, various platforms, such as social collaboration tools, knowledge-sharing systems, recruitment tools, and management tools, among others, will provide efficiency to users. These will be considered as friendly tools for users, which enhances efficiency. Seventh, the Click HR system will assess both operational and business performance to promote effectiveness, efficiency, and operational alignment.
The system will have operational metrics as well as strategic workforce measures to support HR functions and critical business decisions. Eighth, the Click HR system will be responsible for developing internal skills within the department. It is imperative to recognize constant changes in HR solutions. The HR department requires individuals with change management and relationship management skills, industry knowledge, business acumen, use of social, collaborative tools, and talent management solutions.
Finally, the Click HR system will revamp the immediate manager capabilities. That is, it will assist the HR department in delegating some roles to liner managers to meet the needs of employees as they work collaboratively. It is generally observed that HR departments have always strived to meet the diverse needs of all employees and stretch their limited resources to the limit.
Click Exit Plan
The most preferred exit plan is a merger and acquisition (M&A). The click will merge with another company offering the same services, or it may be bought with a well-established HR software solution firm. M&A will result in a win-win situation for both companies. Click HR system will be suitable for a larger organization that seeks efficiency and faster way of increasing revenues without necessarily developing new products.
The major reason for the exit strategy is to allow Click executives to develop plans for optimizing better opportunities while managing potential bad ones. Thus, the company will run smoothly while developing its balance sheet to make it more appealing to potential buyers or acquirers.
Bersin, Josh. “7 Reasons HR Technology Is So Hot Today.” Forbes. 2013. Web.
CMA Canada. Pro Forma Financial Statements. 2007. Web.
Das, Sarit Prava, Preeti Narendra and Parna Mishra. “HR Issues in Small & Medium Enterprises – A Literature Review.” International Journal of Research in Humanities, Arts and Literature (2014): 183-194. Print.
Popp, Karl. Software Industry, Software Ecosystems and partner business models in the software industry. 2015. Web.
Shacklett, Mary E. Does your company need human resource management software? 2015. Web.
Zang, Siyu and Maolin Ye. “Human Resource Management in the Era of Big Data.” Journal of Human Resource and Sustainability Studies 3 (2015): 41-45. Print.