analytics

The Deal Architect blog by Vinnie Mirchandani recently looked at Analytics. Here are my two pennies' worth.

At SAP we spend much more time talking about analytics to customers today than ever before. Analytic software has come on leaps and bounds over the last few years. (not just the SAP stuff, but then I'm biased). The challenge isn't getting the data out anymore, or putting it into nice graphs or charts. It is that analytics really only starts once you have the results.

Innumeracy is a big issue, especially with many of the HR management types I deal with. (Fabulous book on innumeracy by Paulos made me wake up after avoiding the topic for 20 years- math teacher and I didn't get on at high school)

I spoke with  a senior HR guy at a major German auto manufacturer a few months ago. He was doing some tremdenous stuff on the implications of the ageing workforce, combining it with all sorts of demographic and market data and providing his board with some key scenarios to ponder. He could talk about causality, statistical significance, probablities, deviations and the like.  Analytics is a tremedous competitive advantage for this company. The difference between him and most "end-users" of analytics was vast, but then he had a PhD in statistics.  He could also explain things to people who didn't.

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There is an Australian, Peter Howes, who is on a mission to fix HR innumeracy. I hope he succeeds.

Bluntly put: Analytics is only as good as the person doing the analysis.

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an HR Challenge that software can’t solve.

Because I spend much of my working-waking hours on HR software stuff, I try and find the time to understand more about what HR folks actually do. I browse the HR websites and blogs fairly often.  I came across this yesterday on the excellent (despite the Oracle logos)  UK HR website. http://www.hrzone.co.uk/  

Dealing with smelly staff.

We have a staff member with a long standing personal hygiene problems, he has been spoken to about it several times, both by the department head and myself as HR, it gets better for a while but then he slips back and it becomes worse again. He has been to the doctors and there is no medical reason for his symptoms, his departmental manager is really getting fed up as people from other departments continue to make (very unsubtle!) comments. I am going to sit down with him again in the hope this will shock him into action again but I am sure we will be in the same situation in a few months time, I’m thinking that if this does happen to commence formal disciplinary procedure (it really is that bad and affecting everyone else in the department) as essentially he is able to do something about it (as it does get better for a while) and it is affecting others- I’d welcome your thoughts on this awkward situation !!

You need to log on to the site to get the rest of the story. http://www.hrzone.co.uk/cgi-bin/item.cgi?id=151762 

I wonder what job he does?
 

looking at other HR tech blogs

As I'm new to this blog thing, I figured I ought to surf around a bit and see what else is out there in the HR technology space. two that caught my eye were Michael Specht's and the Yankee Group analyst Jason Corsello The Human Capitalist :cool name. 

An excellent source of HR press releases and updates is Christian Acosta's website. He did his doctorate on HR technology, and now works with me at SAP.

I'm also impressed with this wordpress software. I'll just need to figure how to make the RSS stuff work and I'm in business.

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HR and Finance

I have been following HR trends and theories for the past 15 years or so. Working at a leading software company, I’ve spent considerable time crafting product messaging and linking technologies to these themes. Selling and consulting about HR technology is an interesting place to observe the ebb and flow of HR trends, waves and fads. In the past few years, shared services, HR as a business partner, becoming strategic, jettisoning administration, outsourcing, Talent Management,  HR transformation and other buzz words have resonated throughout the HR space, not just in the US; but world-wide.

The Ulrich business partner model is now at the core of many HR department plans. It is rare today that I meet an HR organization that isn’t doing some form of shared service restructuring, or “transformation project”. The mantra of “strategic” HR is on the lips of most HR management.

“We need to add value to the business and drive the organization of the future.”

  • “The HR head should be the trusted advisor of the CEO”
  • “We must become more analytical, and measure ROI and link HR activities to profitability or growth matrixes.”
  • “Performance management must link to organization success and individual success”
  • “How can we win the war for talent?”
  • “We must benchmark”
  • What should we be called?

Consulting firms point to diagrams of pyramids inverting admin into strategy. BPO providers articulate how outsourcing can reduce the administrative burden and free up the space and resources to “Be strategic”. Technology promises to reduce administrative drudgery and slash transaction costs. We are busy in HR, aren’t we, changing our world for the better?

HR- under huge pressure to validate and prove it adds value. HR: underinvested and undervalued, but fighting back. HR, on the move – transforming. HR, wrestling with a changing agenda, reinventing itself and becoming “business focused”, “integrated” and linked to the “bottom-line”. Some HR departments have gone as far as to re-brand HR as “Human Capital Management”. Software products have been quick to follow.

Somehow, HR often manages to see itself as unique, having different challenges from the rest of the organization, requiring unique solutions and processes. People outside HR often look on in bewilderment, wondering what it is that keeps HR so busy.

I recently received a major jolt. I’ve have started to collaborate with a new team looking at Chief Financial Officer challenges and issues. Key current top topics are:

  • Getting more out of financial shared services
  • Beyond compliance
  • Transforming from administrative to value added financial services
  • Enterprise performance management
  • Accounting for intangible assets (IP, Brand and People)
  • Becoming the trusted advisor of the line and the executive team.
  • Building for the future.

I recently saw the Wharton executive program, “The CFO: Becoming a strategic partner” featured prominently on their website. Books and journal articles abound promising to “transform it (the finance function) from a numbers-cruncher into a strategic partner to the business.”

The most recent issue of the CFO magazine was devoted to Human Capital. With articles such as “What’s wrong with finance training” and “The new Human-Capital Metrics.”

In the German “Controller” magazine a recent article explained how HILTI had integrated HR type metrics into accounting reporting.

I have been asked to give a talk on “People issues for finance”- to provide guidelines for finance functions developing learning programs to cope with the switch to shared services and business partnering. It is worrying that they are asking me, and not their own HR teams.

It is seldom that I see HR and Finance willingly talking to each other. Even at business school the HR folks and the Finance Folks would hang out at different ends of the library or even the bar.  The accountants would play hooky in the organization management classes, and the HR folks would avoid “quants” and accounts like the plague. Relationships or liaisons with bean-counters were frowned upon. Their jokes weren’t even funny.

Odd then: The top challenges facing the Head of HR are almost exactly the same as those facing the Head of Finance. Perhaps it is time that Finance and HR sat down together and shared some ideas. HR folks might be able to teach the finance folks a bit about the people issues in performance management, and who knows, just maybe they could help you figure out how to build a convincing ROI case for your talent management strategy. 

You might even come up with some joint strategies. Measuring the value of “Human Capital” is interesting to the accountants too. Sarbanes-Oxley isn’t just a finance thing. You may agree it seems dumb to build two shared service centers to handle first level support. You may realize that accountants are people too. If you think back to business school, there was that one person in accounts who was patient and explained depreciation without seeming depreciating, and who was able to write a sensible paragraph on organizational culture. Organizations need more of those people, and less of a silo mentality.  He or She is probably a CFO now.

HR and Finance are not castes. Its time for some inter-marriage.

Banking and HR Technology….

 Banking and Human Resources:  some parallels.
 
Banks, like many of us, were caught up in the internet hype of the late 1990’s. Online banking promised to revolutionize all forms of banking, removing the need for branches and such like. Traditional banks and insurance companies launched internet only banks. The high street bank branch was doomed, it seemed.

Banks now realize that retail banking requires a multi-channel approach. Not all customers are the same, and not all banking processes are equal. Banks today deliver a multi-channel experience. It may make sense to do a simple bank transfer online, but I may wish to talk to someone on the phone about my mortgage, and I’d like some face to face advice from an expert on balancing my investment portfolio or setting up as an independent contractor.  Also, a 25 year old graphic designer is likely to have a different channel mix from a pensioner, although the silver surfer community is the fastest growing of all.

Banks have become very sophisticated in managing this multi-channel approach. It has taken a number of years to get the balance, and as new technologies emerge, the model needs re-balancing.  The best banks though, know that managing the channel model is the key to cost management, customer satisfaction, and ultimately, profitability.

I’m of the view that HR needs to do the same. In talking with many companies today, I can segment them into three groups.

Technophobe: Self service is not for us. Our managers and employees want to deal face to face with HR. ESS (employee self service)  and MSS (manager self service)  is just pushing work to the managers, they should get on with managing not self service.

Technophile: With ESS, we don’t need HR anymore. Managers and employees can access the system 24-7  and do everything online themselves.

Technorealist: We deploy a mix of interaction models. We use the web, the phone, email and face to face meetings; depending on the type of services, the customer receiving the service, and our cost model.

I don’t expect the bank teller to advise me on whether invest in a hedge fund, and I don’t expect a hedge fund advisor to transfer money from my current account to pay the electricity bill. Why is it that some companies seem to think that the HR generalist, who processes my sick leave form can advise me on building a high performance team, and can help me structure a compensation plan that will retain my top performers?

The dissonance between work and home continues to grow. Most of your employees are familiar with eBay, Amazon, Yahoo, Google and so on. They can submit their tax returns online, pay parking fines, congestion charges and even do online banking.

ESS is not the answer to all HR questions. But neither is an HR generalist on every corridor. The best HR functions today work like the best banks do. They understand the customer demographics, and the service demands, and deliver the most convenient service at the price point that makes sense. They provide efficient transactional services, accurately and cheaply, with a minimum of fuss. And they provide advice and guidance when it really counts.