Guest Post - Why Business Intelligence is Failing HR Managers
SteveNote: This guest post comes from Tom Malone, CEO of Accero.
In the past few years it seems like business intelligence has been all the rage. Vendors promise a tool that will help HR managers pull a seat up to the table with strategic insight gained through predictive analysis of the company’s own data.
However, according to analysts, most companies never achieve the results they expect with these tools. Why is it that business intelligence fails to live up to expectations? The answer can be found in time and resources.
Somewhere between the sales pitch for BI and the initial implementation of the product comes the realization that instead of a solution that serves up insightful analytics, they have a tool that, while powerful in potential, requires a ton of work before it can provide any useful insight.
Once a BI product has been purchased someone within the organization (usually HR & IT) must determine what key metrics they want, and what data they need to support those metrics. Then they must couple the BI tool with other technologies such as a database and ETL tool (extraction, transformation and loading) to build a data-mart that manages and stores complex workforce data, automate a process to load data into the data mart, design each key metric as a chart, scorecard or dashboard, build all the charts and dashboards, store them in a way that makes finding the right metric easy, tie each metric to a role-based security model and finally train their users in using the BI tool to slice and dice through the resulting metrics.
As you can imagine, doing all of the above takes a lot of time, a lot of IT talent and a lot of money. It is the number one reason why BI is failing HR managers and their organizations.
Do we need analytics solutions to help provide insight in the space? Absolutely. HR Managers are the best conduits for information into how an organization can encourage and reward employees, comply with laws, reduce labor costs and increase productivity and eliminate compliance risk. Are we there yet with easy-to-use tools and pre-defined solutions? For most HR departments, the answer is no.
I’d be interested in your thoughts and personal experiences with this topic. Is BI working for you and within your organization or has it failed to live up to its promise?
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Tom Malone is CEO of Accero (formerly Cyborg) a Payroll, Human Resources and Human Capital Management software and service provider. Tom has over 25 years of experience in the software, computer services, and telecommunications industries.
Reader Comments (7)
I agree with the lack of time and money, and would add lack of resources. Companies with a budget big enough to purchase slick HR/IT tools are hesitant to give access to these tools to the users in the "field". If they do give access to the tools, the training is limited to the initial roll out.
BI can make a significant difference in HR organizations and in the larger enterprise. That fact that HR & IT "must determine what key metrics they want,...what data they need to support those metrics...couple the BI tool with other technologies such as a database and ETL tool (extraction, transformation and loading) to build a data-mart that manages and stores complex workforce data," etc. is no different from what other organizations within the enterprise are doing to leverage and succeed in using BI.
There are probably more "tools and pre-defined [BI] solutions" focused on customers and sales than on HR. However, BI can be just as effectively used to focus on the internal enterprise. One example is talent management. What employee attributes show a strong correlation with high performing enterprise programs and services?
The delivery of enterprise programs and services are assessed by outcome measures associated with “On Time,” “On Budget,” and “Quality.” BI technologies can be used to assess the correlation of specific employee attributes with “On Time,” “On Budget,” and “Quality” program and service outcome measures.
One such initiative would be to undertake a pilot or larger (depending on several factors) project focused on identifying key personnel attributes that have a strong correlation with important and high performing programs and services within the enterprise. Are there specific personnel attributes such as attitudinal outlook, education, experience, etc. that have a statistically strong correlation with the performance of these important programs? Such analyses may provide the enterprise with opportunities to sustain and improve program and service outcomes by matching employees with programs and services that will benefit from the attributes that these personnel bring. In turn, employees stand to benefit as well by matching them with programs and services where they have the opportunity to be seen as making a difference.
Hypotheses would be developed that are either validated or invalidated by analyses. The results of such a BI initiative should then be factored into recruiting and professional development actions to get the enterprise the most talented workforce possible. It is important to continuously re-assess these attributes and outcomes and establish feedback mechanisms from employees and managers so that there is an emphasis on continuously improving the BI model.
This in turn enables enterprise talent management initiatives and corresponding resources to be focused and provide the enterprise with "the biggest bang for the buck."
It's important to emphasize that such an initiative should not be limited to HR and IT participation. Business unit and program managers should be involved as well so that they are part of the process and have opportunities to provide input and reviews.
One key issue comes down to how important is the HR function viewed within the enterprise? The answer to that question in turn is driven by the answer to another question: Is HR seen as adding value to the enterprise? If not, then there may be other critical challenges facing HR that HR needs to address before looking at how to use BI.
The "value add" challenge is similar to the one facing CIOs. Just as CIOs are leveraging BI technologies to make a difference in the enterprise, there are opportunities for HR/talent management executives to do the same. Look to see what BI initiatives are working within and external to the enterprise. Do any of those initiatives address one or more of the enterprise's HR challenges? If so, how? What are the projected benefit outcomes and how will those outcomes be assessed? What are the costs and risks? How can risks be mitigated? Are the right resources available and ready to commit to the success of such an initiative? Who is the enterprise executive that will champion a HR/talent management-focused BI initiative?
The answers to these questions can provide a foundation for identifying BI initiatives that make sense for the HR organization to undertake that offer the greatest opportunity to succeed.
@Bonita - Thanks for sharing, great point about the tools not being the only important piece in all this
@sanchezjb - Thanks for your in depth response, I will make sure to share it with Tom
One of the reasons I see that BI initiatives either fail completely or fail to get significant traction is that HR and IT try to do too much too soon. Many HR departments are still relativity new to producing metrics and analytics either for themselves or their business partners. There are a number of BI vendors out there with some pre-packaged metrics, reports and dashboards that can help HR department get their feet wet. I also recommend trying to pick a BI vendor that not only has the pre-packed metrics but also has pre-built integrations (ETLs) with the customers HCM system(s). Oracle BI for example has pre-built ETLs from PeopleSoft HR and Oracle EBS.
This is very nice Do any of those initiatives address one or more of the enterprise's HR challenges? If so, how? What are the projected benefit outcomes and how will those outcomes be assessed? What are the costs and risks.
This is very very cool posting Such analyses may provide the enterprise with opportunities to sustain and improve program and service outcomes by matching employees with programs and services that will benefit from the attributes that these personnel bring.
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