AI-Powered WFM: 3 Keys to Building a Successful Business Case
by Michael Spataro
March 17, 2022
In my previous post, I highlighted 5 examples of how you and other retailers can take advantage of AI-powered workforce management (WFM) to forge ahead with new opportunities. But how do you get started on your path to the possible?
This article highlights the critical first step on the journey: building a solid business case to get the maximum executive support. And that means doing these 3 things up-front in a concise and compelling way.
#1: Defining the Problem Clearly
You must show business leaders why it’s urgent to take action. So, your business plan must start with the core business issue, along with the costs and risks of not using AI-powered WFM.
For most retailers, the business issue is obvious: the current legacy WFM solution is causing more problems than it’s solving. Ask any store manager or any hourly employee if they feel empowered by the legacy labor scheduling tool they’re using now, and they’ll likely get a sarcastic smirk or an eye roll.
The business impact is immense. Labor efficiency, store manager productivity, employee expectations, and attracting and retaining employees all take a hit if your WFM solution is old and ineffective. Yet current WFM solutions are contributing to high labor costs, overworked and underproductive store managers, fines and penalties for missed compliance requirements, frustration in the workforce, and a poor reputation that hampers recruitment of top talent.
Doesn’t that sound like an urgent need for action? AI-powered WFM overcomes the limitations of legacy solutions and opens new opportunities for creating competitive advantages. The next step is to quantify those opportunities, as outlined below.
#2: Quantifying the Business Value
Start by presenting examples of how AI-powered WFM solves your current pain points and creates new business value. These examples include highly accurate demand forecasting, automated WFM tasks, auto-optimized schedules, empowered and engaged employees, and streamlined compliance (see details in my previous post).
Next, highlight the benefits each key stakeholder group will get after moving to an AI-powered WFM solution. Here are a few examples:
- Company Benefits: Machine learning and AI-powered WFM deliver fact-based forecasts. No more guesswork, hunches, or crystal balls. And when you have an accurate forecast, you can optimize labor costs, lower the risk of penalties and fees from compliance violations, and reduce overtime pay. Equally important, an AI-powered WFM solution helps you attract and retain employees because it gives employees more control over their schedules in an easy-to-use mobile app. The result is lower recruitment costs and turnover rates.
- Store Manager Benefits: Overworked store managers will be more productive because an AI-powered WFM solution enables them to eliminate or automate manual, time-consuming tasks. That gives them more time to focus on high-value activities with employees or customers, making everyone happier. Bottom line: store managers are more efficient and have higher job satisfaction, and they have fewer issues with frustrated or disgruntled employees.
- Employee Benefits: An AI-powered WFM solution gives hourly employees more schedule input and flexibility, so they feel empowered to balance their work and home responsibilities. That leads to higher job satisfaction, better communication, and more engagement with their work. And it helps employees meet their personal financial health goals by optimizing their hours and increasing income predictability.
Finally, quantify the overall business value using credible, third-party sources. For example, the recent Forrester Total Economic Impact study is a source of data that quantifies the results of using Legion WFM at a composite enterprise of 10,000 employees moving from a legacy WFM system over a three-year period.
- 13x ROI
- Net Present Value (NPV) of $13.39 million
- 95% forecasting accuracy
- $6.1 million in savings through schedule optimization
- 10% reduction in overtime pay
- Reduction in employee turnover rate by 5%
- $4.2 million in labor cost savings
Then add the intangible benefits to these quantified results. You get increased employee engagement, a better onboarding experience, store managers focused on high-value activities, unlocked revenue through staffing optimization, streamlined compliance, and attracting and retaining top talent.
#3: Overcoming the Obstacles
Even the best business case with quantified benefits may meet corporate resistance at some level. Here are the most common concerns and how to address them.
- Inertia: All but the most visionary business leaders are risk-averse and inclined to postpone any change that could add cost, complexity, and disruption to current processes. The business case must address these concerns upfront by detailing the total expenses and timing of cash outlays, ROI timeframe, and long-term NPV of the investment. In addition, the business case must include the impact on each stakeholder group in terms of learning new technologies, processes, and required retraining timeframes.
- Concerns about AI: The term “AI” evokes negative responses – from concerns about privacy invasion to job loss. These misgivings ignore the simple fact that today’s AI can help retailers serve their customers and employees better – customers get faster and more personal service when employees are focused on them rather than doing back-office routine tasks. AI-powered WFM is a great example of how AI benefits us all. Take time to understand what’s possible by using advanced technologies and be open to the possibilities even if they make you uncomfortable. Our world has changed, and we need to open our eyes to find the path to the possible.
- Implementation: Mapping out your journey and finding the right vendor are crucial to getting approval on implementing AI-powered WFM. We’ll cover this topic in a future blog post.
Take the Next Step
Please book a meeting and tell us more about your WFM vision. We’d love to discuss the possibilities and show you how your business can benefit from using Legion WFM.