Business intelligence (BI) can unlock the value in HR data
World-class organisations are characterised by their ability to deliver the right information to decision makers, at the right time. Workforce data is a particularly valuable – but often inaccessible – source of information. If stored and used properly, it can be a powerful tool to help control costs and improve business performance.
Traditionally, the maintenance of workforce data has been haphazard. It is rare that there are clear owners of the data, and even where there are, they are often specialist technical staff working in a back office.
Organisations typically have multiple applications holding HR data. In large organisations, this is often done through the HR modules of ERP systems such as SAP and PeopleSoft.
These are good tools for capturing core data and storing it in a single place, so that reports can be made directly from a consistent source. Maintaining such a source of communal basic data is important as it allows activities such as headcount reporting to operate smoothly and accurately.
However, unless the core ERP is used to perform all the required workforce management activities, access to this data will be limited. And because ERPs are best suited to storing and retrieving data at a high level of granularity, rather than analysing large data volumes, there is a risk that heavy processing work will impact system performance for core transactional users.
This is where the implementation of an HR business intelligence (BI) capability can make a valuable contribution. A BI solution can overcome these technical and organisational limitations by:
So, how do you set up a fit-for-purpose HR BI solution which can deliver value to the business as fast as possible with a low overall cost?
The first step is to establish what data is critical to operating the business at both a strategic and transactional level. HR BI adds value by combining workforce data with other business information, creating insights – such as the full and true cost of providing a service, or determining how prepared the organisation is to meet market and regulatory challenges.
Secondly, identify data sources from across the organisation and make them available to the BI solution. This is more than merely bolting a query and reporting tool onto the ERP system. The real strength of the BI approach is evident when knowledgeable users have both the capability and the opportunity to bring together often seemingly unrelated information to derive business insight.
Thirdly, identify and secure ownership for those data sources. There is no point in analysing data if it is incomplete or inaccurate. Application owners are often reluctant to hand over data from ‘their’ systems without an explicit statement of how it will be used. In the case of a BI capability, it is difficult to be explicit on this point, until the analysis is completed.
Finally, give business users time to analyse the available data. This should be a flexible approach, which is necessarily different from traditional reporting activities. Users need to work with the data to build up a picture of what will work for them and their organisations.
The ‘holy grail’ for HR functions is to demonstrate how HR makes a measurable positive contribution to business performance – and a BI solution is a key part of enabling this to happen. However, the context of each organisation is important in determining what it will value, and importantly, this context will change over time.
For example, a company with a large field workforce may value enhanced workforce scheduling capabilities, having a direct and measurable contribution to cost and revenue, whereas a telecoms company launching a new broadband product will value speed to market through its salesforce.
Rapid prototyping approach
Many organisations face a major struggle to implement BI. There are plenty of war stories of expensive failures which can put people off even attempting it in the first place.
In our experience, the last thing you should do is select a tool. Far better to simply to get on with it with an available low-cost technology (say SQL Server), prove the approach and migrate to a more elegant and expensive solution later.
BI is a flexible tool, and extended specification time can kill a project, as the window of opportunity may close by the time the capability is live.
A rapid prototyping approach can deliver usable insight within weeks, not months. By presenting rapid results based on a small investment, you can build the case for further and full rollout.
Tim is recognised as one of Europe’s leading sourcing consultants. For the past 18 years, Tim has supported many European multinational companies in transforming their HR, Finance, Procurement and IT functions: creating their sourcing strategies; selecting service providers; negotiating contracts; and implementing their solutions. He was named Sourcing Advisor of the Year by HROA in 2006, Outsourcing Professional of the Year by UK’s Outsourcing Association in 2007 and HROA Europe’s Individual Innovator in 2008.
With an HR and IT business background, Joe Camilleri has gained experience across a wide range of industry sectors, including Oil & Gas, Public Sector, Retail and Consumer Goods, Financial Services and Telecommunications. Over his career, he has played a variety of roles in many HR transformation and ERP systems implementations.