Archive for the ‘HR Software’ Category
From Reporting to Business Intelligence
The Evolution of Business Intelligence
Of all the elements that can help HR deliver ’strategic value’ to an organisation, business intelligence ranks at or near the top of the list. If you accept that your workforce is one of your organisation’s biggest assets, the ability to provide senior management with meaningful information about the best way to leverage it has to be a priority. Whether you’re calculating costs, analysing individual employee value, digging into the factors behind absence or assessing the best way to recruit and retain high-performers, HR business intelligence is critical.
Yet for all its obvious value, many HR functions still struggle to provide deep-level business insight. In some respects, this is simply the continuation of historical trends. While the finance function has a long analytical pedigree centred on revenue and cost, HR’s role has traditionally been focused on meeting regulatory requirements, administering people-related processes and providing counsel. From a business intelligence perspective, its role until comparatively recently was largely confined to managing overhead and providing rudimentary insight into operational efficiency, with only the most basic means of measuring people-related value. As a result, while some high-performing HR functions now provide sophisticated business intelligence, a large number of organisations lack both the tools and the analytical skills needed to provide business insight.
This emphasis is reflected in the way organisations approach HRIT projects, which still tend to be heavily focused on automation rather than business intelligence. The priority for most projects is to improve the management of HR processes and transactions, whether that’s replacing a core HR Management System or automating processes such as recruitment or absence management. The business intelligence components tend to be limited to setting up standard reports and occasionally building a custom report to meet specific senior management needs, with more sophisticated analysis pushed back into a future ‘Phase Two’.
There’s nothing wrong with focusing first on automating people-intensive manual processes, particularly as they typically deliver the efficiencies you need to make a business case for HRIT investment. And it’s perfectly reasonable to automate before you analyse: there’s little point trying to dig down into the underlying causes of absence, for example, if you don’t have a mechanism in place to capture data about which employees are actually sick, on vacation or taking maternity leave. But what tends to happen is that the more advanced business intelligence components – the ‘Phase Two’ – never quite happen.
Ideally, process improvements and business intelligence should go hand-in-hand – the implementation can be phased, but they need to be seen as two parts of the same project. This is partly a question of good practice: you need to have insight into how efficiently automated processes are running, which requires some kind of analytical capability. Just as important, as we outline in Part Two, easy access to relevant data is what paves the way for more effective business intelligence – and automating processes helps organisations shift data from paper forms, standalone spreadsheets and disparate software applications into a central database where it can be more readily analysed.
This close inter-relationship is reflected in the way that software developers bundle business intelligence software in with the transactional and process management capability of their HR Management Systems, usually through a combination of standard reports and tools for custom analysis. In some cases, vendors also offer more sophisticated business intelligence tools, which go beyond standard HR reports to provide drill-down analysis of costs, causes and trends. Generic business intelligence tools evolved out of the finance function and were traditionally numbers-driven – and that meant they weren’t always easy for business managers to deploy. But as we outline in Part Two, recent generations of people-related analytical software have placed much more focus on usability within the HR function and lines of business.
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