Desire and Capability – Aligning the desire for HR analytics to BI Capability

Being able to measure its own performance is critical to the HR function. One of the key challenges facing HR is its ability to track and measure those aspects of itself that truly add value to the organisation. Understanding this and the varying degrees of maturity in the process, are essential to designing an appropriate HR analytics approach.
Feedback is critical
Feedback is essential to the survival of any complex organism.  The human body has multitudes of feedback mechanisms to provide the brain with key information about the current state of the individual; pain, pressure, heat, proprioception, balance, sight, hearing etc. are all systems that incorporate different sensing networks that provide the brain with immense volumes of data. The brain then analyses this input to determine how well the body is progressing towards any one of a number of goals.  The ability to understand and apply this incoming information, as well as to project this information into the future, all develop over the lifetime of an individual.

Organisations are governed by very similar rules.  They have a multitude of systems that provide input on the current state e.g. financial statements, banking reconciliations, stock level and distribution, procurement and HR processes.  These all generate immense volumes of data that can be used to define and understand the current state and progress the organisation towards any one of a number of goals.

Similarly, an organisation typically develops increasingly more mature methods of interpreting this data, and for converting it to information and knowledge of increasing richness.  This knowledge can then be used to steer the organisation in line with its strategic goals. If this feedback does not provide the organisation with useful or relevant information, it will be hamstrung in its efforts to steer itself effectively.

If we accept the above analogies, then it is clear that one of the only ways an organisation can understand its current state, and can change and direct itself, is through accurate and appropriate feedback, and this is typically done through the use of reports and analytics. Not receiving appropriate feedback, or receiving the wrong information, has an incapacitating effect on the organisation.  As I mentioned in my previous blog [link], it is crucial for any analysis of organisational data to be tightly aligned to the HR strategy, and more even more important is that they must present actionable input that can be used to make effective decisions that impact the organisation.
It is not sufficient to align your analytics to the business strategy.  It is imperative that the level of maturity of the BI capability in the organisation is taken into account as well.

Understanding where an organisation sits on this continuum is crucial for the development of appropriate people metrics, as the complexity of the information requested must match the capability of the analytics environment.  A mismatch would mean either that the capabilities for reporting outreach the organisations ability to use the information (implying poor ROI), or that the decision makers of the organisation are not provided with the depth and breadth of information they need to make informed decisions.

BI Maturity
Understanding the importance of feedback is only part of the puzzle.  The maturity of the BI capability also crucial to the process.
Business analytics can be viewed as the confluence of business strategy, technology and the data that flows through it.  Analytics systems provide the organisation with the ability to interpret this data and help it to understand its current state.  The BI maturity continuum can be divided into the following five stages;

Early

• The early stage of BI maturity in an organisation is characterised by a highly manual approach to developing reports and analysis.  The extraction and transformation of the data is done using secondary tools such as Excel.  The data is often of questionable quality and the outputs are rudimentary views of historical actions.
• There is no simple way to communicate the analysis and reports done, other than as attachments to email.
• In most cases the end-user is not able to adjust or build their own analysis, but are reliant on specific individuals to develop the reports required.

Emerging

At an emerging level, the organisation has some processes in place to drive the development of regular analytics, as well as to request new analysis to be done.

• The reports are still produced on standalone spread sheets that require a significant level of manual intervention. These often incorporate data from un-connected data sources with no programmatic support.  This increases the need for data cleansing and mapping, to ensure that the information provided is consistent.
• The reports remain historical, but may begin to provide some context beyond the plain numbers, such as a historical comparison or basic projection of averages.
• The systems themselves remain stand-alone, and not integrated to the source systems.

Defined

At this point the systems  used to develop the analysis, have moved beyond spread sheets, and may be some form of analytical tool, though tight or native integration to the underlying systems is not common.

• At this level there is the emergence of functional or process level data warehouses that are used to produce specialised reporting.  Around these data stores will emerge isolated groups of expertise, who are able to interrogate these data stores.
• There is no standardised data dictionary or meta-data lexicon to work from, so the analysis developed may not be transportable to other functional areas (the definition of an employee from a production perspective might not meet the needs of the HR function).
• The processes to gather the data and develop the analytics and reports becomes more automated and more standardised, and the access to data will improve.  However there is no true end user self-service.

Progressive

At this level there is the emergence of integrated data stores across the organisation and tightly integrated analysis tools.  This may take the form of a traditional ERP solution, or a well designed and implemented enterprise data warehouse.

• The single data source drives the development of a standardised approach to data definitions and formalised processes for developing analytics.
• The MIS capability in the organisation is also able to develop complex analytics drawing on data across multiple business functions, in order to mine and identify specific business trends and uncover areas of competitive advantage.
• The ability to develop predictive analytics is also present but is not fully fledged.
• Access to the development tools is also extended to line management to allow for the development of ad-hoc analysis, further lightening the load on the MIS department.  Such an approach also drives compliance with the standardised data model, helping to ensure that an employee is defined in the same manner across the organisation.

Leading
At the most mature point of the continuum analytics have been embedded into every business process, providing on-demand access to reports, analytics and dashboards.

• The analytics produced provide actionable intelligence to steer both tactical and strategic decisions.
• Self-service delivery, real-time dashboards and predictive analytics are all well entrenched.
• The organisation has a strong understanding of the value of data, and has identified data stewards to manage and maintain data integrity.

Conclusion

Being able to understand the maturity continuum for analytics in an organisation, is crucial to planning an effective people analytics strategy.  Where there is a gap between the maturity of the BI capability and the expectations of the organisation, possible blind spots in the feedback that is required and received may exist. These highlight areas that must receive concerted attention.  Expecting to deliver predictive people analytics in an organisation that is still stuck using simple spreadsheets, is a recipe for unhappiness across the board.  Coupling the desire to do so, with the understanding of the current level of maturity, will provide you with a set of clear steps to take in order to bring the organisation in line with these desires.