The Proof is in the Pudding

My fascination with analytics started back in my Product Management days at SAP when we first started developing BW and designing infocubesfor various analytical reports. We developed a relationship with Peter Howes, Vice President, Workforce Planning and Analytics at SuccessFactors, who at the time was the founder and CEO of Infohrm, a specialist technology and consulting firm that worked exclusively in the area of Workforce Planning and Workforce Analytics. Peter challenged my tendency of linear thinking, and opened the doors to more three-dimensional thinking. I became very interested in questions, such as cost per hire or why do people leave an organization? Of course you can ask that question in an exit interview but if you miss that opportunity, or maybe don’t really trust the answers you get, then a good analytics tool can help.

When I first started searching for answers I would look at what jobs had the highest turnover and assumed that that was my answer – the job. Again, Linear thinking – what and why. However, I eventually learned to look deeper in order to find a more conclusive answer. Thus, more three-dimensional – what, why, and why is the why. I started by looking for similarities in the people that were leaving and followed up with a series of “why” questions. Is there a particular job that has a higher turnover? Can it be broken down by a shift? A particular manager? A particular time of the year? It is when you start to drill down that the answers start to become clearer and, thus, provides the opportunity to implement a plan to rectify it – or at a minimum improve upon it.

What I really loved about it is I could start to find proof that is not always easy in HR – especially when dealing with soft skills. I could also look outside of the HR data to find answers as well, due to SAP’s integrated foundation. For example, what was the impact of a sales training program (HR data) on sales revenue (FI data)? Then I could dig deeper – did people who took the course from instructor X or training session B perform better?  This discovery was especially significant for me because I came from a major manufacturing organization where HR was referred to as the “fluffy” stuff. Not anymore. Now I could provide proof about the effectiveness of the programs HR put together and their impact on the business, thereby earning a seat at the table.

As a part of earning a seat at the table, HR executives should be able to measure tangible progress against key performance indicators (KPIs) based on three core executive issues:

• How do we establish an environment in which our employees feel engaged and we retain our top talent?
• How do we anticipate and meet the business’s workforce demandsand prepare for growth?
• How can we streamline and automate our processes to increase productivity and reduce the cost of operations?

Based on SAP’s experience, the HR value proposition at the highest level (and many HR business cases) is founded on three groups of metrics, in line with the core HR executive issues:

• Employee productivity – Employee engagement as well as other more industry-specific productivity metrics (for example, revenue per employee or employee utilization)
• Workforce availability – Employee turnover as well as other employee lifecycle–related metrics, such as time to hire and quality of hire
• HR operational efficiency – HR costs per employee or employees served per HR full-time equivalent (FTE) as well as related cycle time, error rate, and transactional metrics

The SAP Value Engineering team actually provides a complementary service for organizations who are interested in knowing how they are progressing vis-à-vis these metrics and others. They work with customers and prospects to establish a sustainable approach to execute on-time, within-budget, and on-value performance along the implementation lifecycle. This includes jointly developed collaborative value assessments that result in a business case, a client solution road map, and an executive summary.

As a little bit of background, SAP Value Engineering has conducted more than 10,000 collaborative value assessments with customers and prospects globally. A key component of the value assessment is a benchmarking analysis, where business performance is compared against peers in the same industry and region, and of a similar scale. This benchmarking enables organizations to diagnose issues, form a hypothesis, and identify root causes, helping ensure they target areas that will bring the most value to their organization.

HR is one of the most mature benchmarking practices, with more than 800 participants to date. Feel free to read the whitepaperwhich outlines some of this valuable data about best practices for improving human resources performance or, if you’re ready, sign up and take advantage of this complementary service.

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