SAP’s offering for Workforce Planning and Analytics

There is no shortage of data, or ways to analyze it all in today’s HR. Yet we constantly hear customers and HR leaders talking about drowning in data and thirsting for insight. What we are seeing beyond that thirst see is a deficiency in the way HR data trickles down, or bubbles up, in the organization. More than ever, different groups within companies have different information needs. And quite consistently, they are not getting what they need.

I think SAP has taken decisive steps in solving this problem.

To understand how there can be so much data yet such a deficiency it getting to the right users, let’s first see who these users are.

Who are these people?

Figure 1: HCM stakeholders across the organization.

Managers are the most conspicuous users of HR data. Executives and senior-level managers need aggregated information to check the pulse of their organization at any time, and potentially react quickly by assigning tasks to others. Middle managers need micro-analytics (meaning targeted widgets focused on specific questions) to make operational decisions inside the transactions they are using every day, which typically involves more detail than senior-level managers require.

Directly supporting managers is finance and controlling. Typically, these users do not need HR analytics in their day to day work. Yet they need visibility on HR data as far as headcount planning is concerned. Some of the questions for which they need insight come from HR data. How many people will the company hire next year?  How much will it cost in salary and benefits? How much will it cost in real estate or IT resources? These are not trivial questions, yet often finance and controlling cannot address these questions without significant specialized assistance from HR.

Such assistance comes from HR analysts, a new function we are seeing more frequently, and who are often called upon to address needs outside of the traditional HR function. HR analysts are professionals possessing a strong quantitative background, and are assigned to HR to help frame decisions more quantitatively. Their previous experiences are often gained from their tenure in in marketing or finance, and they may have considerable experience in operations or CRM. HR professionals, whether administrators or HR business partners, are the immediate consumer of HR analysts, obtaining detailed reports and needing some level of capability to drill down and answer questions.

Plenty of pain to go around

All these users make unique contributions to HR strategy and execution. As mentioned earlier, each user has different needs according to consumption level and position in the value chain. However, we are seeing common to them all a consistent combination of five pain points.

Figure 2: Summary of challenges organizations face to leverage analytics.

Data quality

Inadequate data quality does not just refer to missing data points or coarse measures. There is also a lack of real time information, caused by a lag between the time a report is requested and fulfilled, during which time the data can become obsolete or irrelevant. Because data is loaded in batches in warehouses, it is seldom up-to-date and accurate. And even worse, different people see different versions of it.

Finding (or inventing) the most relevant metrics

Each business has a unique strategy, and therefore must monitor sets of metrics that apply to it, but may not be comparable to similar metrics used by other companies.  Therefore organizations often fail to to calculate the metrics that make most sense for them. Arriving at an accurate headcount report is already a challenge, and more advanced metrics such as cross-enterprise metrics are even more difficult to get. Metrics bringing together finance and HR, or CRM and HR, or Supply Chain and HR, or any other enterprise data and HR are nearly impossible to calculate, much less to distribute.

Operational or strategic HR planning? How about neither? 

While all companies recognize its importance, they are often unable to perform proper HR planning. Whether developing a strategic 5 to 10 year plan to achieve market leadership, or a 12 month plan to control hiring costs, they simply do not have the tools. Instead, they struggle with multiple inconsistent spreadsheets and manual efforts, leading to redundant work and errors.

It’s all too much

At the end of every working day, every business has untold megabytes more data than just 24 hours before, leading to decreased  ability to deal with large volumes of data. Whether to find hidden relationship between metrics, dependencies invisible to the bare eye, or whether simply to run a payroll reports or an org structure simulation, more data means less likelihood of deriving value from it.

Usable by the user, of all people

Last but not least, much of the information derived from data is not available in a format that can be consumed by the various stakeholders. Middle managers need widgets inside the transactions they use every day. Executives need dashboards they can easily access while they travel. Business partners need an environment with which they can interact. Each of these formats is just not there in most cases, and if in rare instance one exists, it fails to render proper data.

Three approaches to address big data pain points

SAP has three approaches for HCM solutions to address these pain points, while providing the appropriate level of usability according to the user: reporting, analytics, and planning.

Figure 3: Summary of the reporting, analytics, and planning approaches to using big data.

Reporting: establish where you are.

The first approach deals with HR reporting. Reporting solution are  designed to provide middle managers, HR business partners and executives with the information they need to get a clear picture about what is happening right now in the business.

For on-premise reporting, SAP offers a series of standard reports inside transactions. Called, embedded analytics, this solution requires BOBJ tools, and has been available since Enhancement Package 5. We also offer a series of analytics to quickly get to the root-cause of a problem

Analytics: understand why you’re there.

In a general sense, “analytics” refers to enhanced levels of analysis techniques aimed at discovering, actionable, relevant, highly specific insights within organizations. However, when described as a business solution, analytics goes a step further, providing a set of BI capabilities that allow for a high level of interaction to detect problems, investigate root causes, and push action to the proper persons. Both HR reporting and analytics are backward looking: they provide clarity on how the company did and why.

Executive HR Analytics and Advanced Analytics are BW on HANA solutions. Executive HR Analytics allows executives to check the pulse of their organizations, and quickly react to problems they see by assigning to-do’s, and other resources if necessary. Advanced Analytics is a tool for BI analysts to answer a question asked by an executive and come to a conclusion quickly.

Manager Insight allows users to perform analytical tasks on-device. Reporting and analytics performed on Manager Insight have a corresponding solution on the cloud, allowing users of SuccessFactors Talent Management and Employee Central to access reporting that will help them to make micro-level decisions inside the transactions they use every day. Cloud Workforce Analytics is a powerful solution that allows customers to perform all possible analytical tasks on the cloud. Featuring over 2000 metrics and benchmarks, we call it the “Rolls Royce of HR analytics” for its refinement and sophistication.

Figure 4: SAP’s solution stack and roadmap.

Planning: determine where you are going

Planning is always forward looking, whether dealing with immediate short-term planning of shifts, 12-month planning of new skills and headcount acquisition, or strategic long-term planning to prepare for growth and international expansion. Let’s take a closer look at each of these planning time frames.

Short-term planning or shift planning is fairly straightforward: Who will I need tomorrow morning at 8 o’clock? How many people will I need on Saturday, etc. This type of planning is dealt with using a partner, Roster Planning by Click Software.

The second time frame is handled by SAP Operational Headcount Planning, and is concerned hiring plans over 12-18 months. How much will it cost in salaries? How much will it cost in benefits? How much will it cost in IT or real estate? And how will these new hires support the company’s strategic objectives? Hiring is often done under guidelines provided by finance. With the SAP Operational Headcount Planning solution, middle managers can plan at the level of their team, using the average actual costs from the previous year as a starting point. They can do so with a constant reference to the guidelines provided by finance. In case they exceed the guidelines, the system will immediately let them know, thus eliminating painful reconciliations and back-and-forth’s. This solution is deployed on-premise, and is built on the SAP Business Planning solution, with specific content for HR.

Finally, the third time frame deals with Strategic Planning, such as a five to ten years plan for growth, international expansion or societal demographic changes. It  is delivered on the cloud and  comes pre-integrated with the SAP Operational Headcount Planning solution allowing users for example to assess how will a 12 month hiring plan will fit into the company’s five-year plan.

     Figure 5: Benefits from an integrated HR Workforce Planning and Analytics solution.

Figure 6: Examples of customers running an integrated HR Workforce Planning and Analytics solution

Customers who already went for SAP HR analytics have realized significant benefits. Comcast for example, directly linked its customer satisfaction increase to a reduced turnover that was made possible by better understanding and empowering its workforce. WellPoint also achieved some significant savings in the area of turnover by analyzing and then adjusting its hiring and on-boarding processes. ABC hospital was able to dramatically improve the way it identified, grew and retained top talents in-house.

SAP today counts with hundreds of customers running its Workforce Planning and Analytics, in all lines of business and of all sizes. It is interesting to see that some companies with a very deep quantitative culture chose SAP’s Workforce Planning and Analytics instead of developing their own solution from scratch. This validates our approach, and confirms that quantitative techniques can be applied to HR to optimize decisions at all levels, whether for middle managers inside the transactions they use every day, for senior executives to check the pulse of their organization or for HR business partners to get a detailed picture of what is going on with the workforce.

In summary, it has become clear to us that success in analytics depends as much on understand who the users are, and what part of the value chain their contributions are most relevant. In this blog I’ve given a brief overview of how we in Workforce Planning and Analytics are directly addressing the needs of customers. Many more updates are planned, so stay tuned.  For more general updates about HCM solutions, you can get in touch with me, or follow me on twitter at watch the wave.

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