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The Foundations for Business Intelligence
Centralised HR Data Management
Conventional wisdom has it that the quality of any output is determined by the quality of the input, and the analytics market is no exception. Without an effective data management strategy, you can deploy the smartest business intelligence tools – but you may well end up analysing the wrong information.
One of the first steps in any business intelligence strategy is to get better control over your people management data. Inevitably, some of this will be unstructured knowledge – the kind of information that’s locked away in filing cabinets, sits in your employees’ heads or is buried deep in your email archives. As we indicated in Part One, process automation plays a critical role here by turning manually-held information into digital form. By automating your recruitment, training management and absence processes, for example, you can generate a wealth of information for both individual employee performance management and trend analysis.
This information then needs to be stored centrally – or at least be accessible from one central location. One potential starting point is to make your HR Management System the central repository for all people-related data – since this is the place where basic employee records are held, it makes sense to build a complete employee picture around it. The software applications that feed this store don’t of course need to be part of the same HRMS: you can use a broad range of best-of-breed systems and services, as long as they’re sufficiently integrated to automatically update the central repository.
Tools for Analysing Data
Once you’re able to post all the relevant HR data in a central repository, it becomes much easier to get insight into both operational and strategic issues. Many operational reporting needs can be met with the standard reports that come bundled with HR Management Systems. In addition, specialist business intelligence tools – provided by both traditional HR software vendors and third party business intelligence. Some vendors also provide specialist software for employee planning, modelling and ‘what-if’ analysis.
While business intelligence capability has traditionally been provided as in-house applications and tools, some vendors now offer HR business intelligence as a hosted service. In this set-up – frequently referred to as ’software as a service’ – the provider takes responsibility for running and managing the actual software, which the customer accesses over the internet and uses as if it were an in-house tool.
How effectively these reporting tools can be deployed depends on a number of factors. Firstly, ease of use and a good user interface are critical. Many older generations of business intelligence tools were designed with IT or subject matter experts in mind, and proved too complex for HR or line managers. Even with training these tools can sometimes be harder to handle than expected: training works best if it’s followed quickly by repeat usage, but users sometimes find that the time between learning and using is interrupted by a lengthy software implementation.
The design of the reporting software is particularly important when you make repeated queries during an analytical exercise and want to be able to reset the parameters or change your view of the data. For example, you may start by looking at absence costs at a business unit level, on a three-month basis; depending on what you discover, you might then drill down a level to an individual department, and change the view to span an entire year; next, your research could take you to an individual employee record. Some people-based business intelligence software packages are more flexible in their approach to this kind of analytical exercise than traditional business intelligence tools, allowing users to view data graphically and drill down using simple ‘point and click’ techniques.
Secondly, regardless of how good your tools are, you’ll also need in-house analytical capability. You don’t need a PhD in statistics to be able to use these tools – but you do need an analytical mindset. Going forward, some vendors are likely to offer this analytical capability as a service in its own right, using their own tools and knowledge of the HR market to interpret data provided in confidence by your organisation.
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