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Move from HR Data Collection to Real Insights About Your People

by Jean-Bernard Rolland and Kouros Behzad | SAPinsider

April 1, 2012

Too much data is rarely seen as a bad thing since it can provide detailed insight into the business. However, the HR organization has lacked the ability to easily access data across the enterprise, leaving crucial HR metrics unseen by executives who have the power to act on them. Advanced analytics solutions can help SAP customers maximize the value of HR and, with this information at their fingertips, executives can make more-informed business decisions more quickly.
 

The human resources organization has never been short on data. Many companies have invested heavily in improving and automating HR operations, and for decades, HR has been collecting data in areas like employee performance, turnover, and staffing levels. All of this data has resided in the company’s systems, but HR has lacked the user-friendly solutions to easily access the information and provide detailed executive-level analyses. The technology limitation has left crucial HR metrics unseen by executives who have the power to act on them.

HR has always had access to standard reports and basic metrics, but timeliness, relevance, and accuracy have frequently been inadequate. Since the beginning of the global recession, three trends have converged to establish advanced analytics capabilities that enable HR to better support the business at a crucial time.

For starters, technology can now pull HR-related data out of disparate databases and systems, making information readily available to managers and executives in a visual, intuitive display. When powerful, user-friendly technologies like SAP BusinessObjects solutions and SAP HANA are applied to the HR data set to enable real-time analytics, an entirely new level of business insights and opportunities opens up.

Next, most companies have optimized their core HR processes as much as they can, and are looking for new ways to align with the business. They have spent years focusing on how to make HR-related business processes as efficient as possible, and have learned that process optimization can only go so far. This has driven many companies to seek more detailed analytics to shed light on new opportunities and drive more value from their existing solutions.

Lastly, the global economic crisis has fueled the demand for stronger HR analytics to support the strategic objectives of the organization.  Companies are focusing on achieving rapid but controlled growth and want to understand who their top performers are within their organization and how they can recruit the right talent to achieve the growth target set forth in their strategic plans. The most efficient way to gain this understanding is by applying analytics to their data for more acute insight into the composition and dynamics of their workforce.

A New Maturity

The convergence of these three trends has brought a new level of maturity to HR analytics. Organizations are no longer focused solely on collecting streams of transactional data. Instead, HR and business executives are asking for new views of the information to help them make crucial business decisions in real time.

In the past, metrics on issues such as employee absenteeism likely never made it to business executives. The effort required to produce complicated reports confined it to the domain of middle managers, who paradoxically had limited ability to act on identified trends, despite having rich information about the source of the problem. Today’s HR analytics solutions allow business executives to easily view those types of metrics, readily interpret the information, and direct actions.

In many cases, executive-level metrics are sufficient to provide the insight needed to manage an organization effectively. But if an executive sees a metric that is outside of an acceptable range, he or she can now drill into the behaviors underlying the metric, determine the root cause of the issue, and explore possible actions to quickly respond. As more executives are exposed to this level of capability, they are requesting even more advanced HR analytics to help them manage the talent in their business.

From Reactive to Predictive Analysis

This new level of analytic power enables executives to perform predictive analysis on their HR-related data. Let’s look at two examples.

A Comprehensive View of Risk Management

Perhaps nowhere is predictive analytics more valuable than in managing risk associated with the workforce. SAP Workforce Risk Management enables users to not only document and reduce adverse workforce events, but predict their likelihood and impact by monitoring the appropriate risk indicators. With key risk indicators in areas like safety, fraud, and turnover, executives can develop a more effective plan to avoid adverse events.

For instance, companies in many industries collect data on near-miss incidents — accidents in which no one was injured, but could have been. Information on such incidents is stored within a company’s system. Yet viewing the data — the number of near-misses — without adequate context does not help predict the imminence of a serious accident or suggest what action might help prevent one.

With SAP Workforce Risk Management, an executive can see the correlation between the number of near-misses and other relevant indicators, such as the level of seniority of the employees at the site, no matter what system they’re stored in. The metric seen by the executive can also factor in data residing in other applications on the amount of safety training received by employees. Combining all relevant data provides a more complete and accurate picture of the risk faced by the organization. The correlation between seniority level, training, and near-misses helps predict whether the risk is mounting. With this information, the executive can determine if a serious problem is imminent and how certain business changes, like increasing safety training, will reduce the risk of a serious injury or a death.

In the past, key risk indicators existed in various systems at a level that an executive couldn’t drill down to. Technology today allows information to be easily correlated and visualized, helping executives perform this level of analysis in real time.

More-Informed Workforce Planning

Workforce planning is another area in which analytic solutions can help executives develop realistic strategies. At many companies, the workforce planning process involves HR planners taking a “bottom-up” approach, asking local managers how many new hires they expect to need in the forecast period. The planners then build spreadsheet-based forecasts, with little visibility into what the hiring budget might allow. At the same time, the finance group takes a “top-down” approach and develops a budget that allows for a different number of workers. If there is a gap between the projected number of employees and the budget, HR and finance must resolve the problem. This process can take months and overlap well into the forecast period.

The new SAP BusinessObjects Operational Headcount Planning analytic application eliminates organizational disconnect by prepopulating the HR application with actual financial and headcount data, thus setting a baseline budget for HR planners for the planning period.

Based on surveys conducted among HR professionals and workforce planners from many organizations over the past year, SAP sees that the demand for this kind of solution is extremely high. Companies in a variety of industries have confirmed that they struggle to tie their long-term strategic initiatives, which are more directional in nature, with their workforce forecasts, which require hard numbers. The SAP Business­Objects Operational Headcount Planning analytic application can help combine HR and financial processes to produce accurate and realistic business and workforce plans.

A Step Up in Strategy

Advanced analytics solutions can help SAP customers maximize the value of HR and related data that already resides within their environment (see sidebar). Rather than merely collecting and storing data, they can leverage it for actionable insights. With information at their fingertips, business executives can make better business decisions. For more information, visit www.sap.com/usa/solutions/business-suite/erp/featuresfunctions/workforceanalysis/index.epx.

Bringing the Power of Analytics to HR

The following analytics solutions for human capital management are available:

  • SAP Workforce Risk Management
  • SAP BusinessObjects Operational
  • Headcount Planning analytic application
  • SuccessFactors Workforce Analytics
  • SuccessFactors Workforce Planning
  • SAP BusinessObjects Executive HR Reporting analytic application
  • SAP Business Intelligence for HR 
  • SAP Manager Insight 
       

Jean-Bernard Rolland (jean-bernard.rolland@sap.com; Twitter: @watchthewave) is Vice President for HR Solutions at SAP, responsible for a portfolio of core solutions as well as workforce planning and analytics. He has been with SAP for seven years, focusing on advanced analytics and industry solutions.

           
       

Kouros Behzad (kouros.behzad@sap.com) is a Director of Solution Management for Line of Business HR at SAP, responsible for the strategic direction, roadmap planning, and go-to-market functions of HCM analytics and workforce planning solutions.

 

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