Why HR Data Management Strategy is important in your HR Transformation
A multinational company moved their HR system to the Cloud with the aim to transform their current HR function into a data driven HR function. They wanted to transform their HR organization from an administrative function, to a consultative role, which helps the business make decisions based on reliable data. Months after successfully going live with their new HR Cloud system, they started having challenges with the quality of their HR data. They were able to go-live successfully, so they must have done all the technical work needed, right? So, what did they miss?
Moving your HR system to the Cloud is more than just implementing an HR Cloud solution – it is to a certain degree always an HR Transformation, since this move impacts your HR organization and changes the way your organization works. There are several dimensions that come into play when implementing an HR Cloud solution like SAP SuccessFactors: Strategy, Value & Risk, Program Management, Organization and Processes, IT Management, Data Management, and Change and Enablement. All these dimensions are important. The sad reality though is that although the Data topic is somehow discussed in many different levels by different workstreams in the project, it is most of the time underestimated and there is no single owner who safeguards the over-all Data Management topic.
Most organizations do not have the luxury of defining their Data Management Strategy before they must manage their data in the Cloud. Using Peter Aiken’s framework (from the DAMA DM Body of Knowledge 2), organizations can define a way forward and establish their HR Data Management strategy. Only when all these Data Management capabilities are considered in the Data Management strategy and implemented , the organization can have well-managed data and advance its HR Analytic capabilities.
SAP SuccessFactors as a SaaS solution covers several of these Data Management capabilities. This means that when an organization purchases SAP SuccessFactors, they have a starting point for Data Security and Data Storage & Operations. SAP SuccessFactors solutions employ extensive security measures to protect against the loss, misuse, and unauthorized alteration of data. SuccessFactors also has a robust Data Model which promotes a global Data Design, but also supports local legal requirements for more than 90 countries. With pre-built and custom integrations for SAP SuccessFactors, organizations can also keep all HR and business data flowing seamlessly within their over-all system landscape.
The Data Management capabilities of most organizations would stop here. Mostly it is because the SAP SuccessFactors implementation project has been completed. In other cases, it can also be due to lack of resources to invest in more sophisticated Data Management capabilities, lack of knowledge or most probably due to the absence of a Data Management strategy in the first place. Effective organizations understand that although the foundational Data Management capabilities can be covered by an HR system such as SAP SuccessFactors, the objective of becoming a data-driven HR function cannot be fully achieved by this alone.
What happens when the organization implements a new HR solution but lacks the Data Management strategy? Once they go-live with their SAP SuccessFactors solution, they will start to find data quality issues.
There is this assumption that the system will take care of data quality by itself. In many cases, yes, several system functionalities from SAP SuccessFactors can support data quality such as built-in validation checks, business rules, system-based value list and picklists, data fields auto-population based on existing information, and many more. These features greatly contribute in safeguarding data quality, but only to some extent. Getting to a higher data quality also depends on the organization’s ability to maintain a reliable Meta Data and consistent Data Architecture. Everyone in the organization have different levels of knowledge about HR data and there is no one person who knows all information about the organization’s HR data. The metadata acts as a single source of truth where it is defined clearly the meaning and the purpose of the data stored in the system, as well as the origin of data and dependencies. Metadata can be in the form of an HR Data Dictionary or Data Catalog. With this, it is easier to implement Data Quality concepts and measure to ensure that users are using the right data fields for the right purpose. These provide clarity on how data from within the over-all HR system landscape work together.
In order to ensure data quality and manage metadata and data architecture, a robust Data Governance is required. Data Governance also enables execution of strategic initiatives such as Business Intelligence & Warehousing (HR Analytics), Reference Management, and Document & Content Management. This is the reason why Data Governance is at the bottom of the pyramid – because it provides the structural support for all the Data Management capabilities. Without Data Governance, an organization wouldn’t be able to manage their HR data properly according to policies and best practices.
Implementing SAP SuccessFactors is a great opportunity to establish or re-align an organization’s HR Data Management strategy. Only then an organization can reach a state where they have reliable data and processes to support their strategic business goals.
The HR Innovation and Transformation team provides HXM advisory services for SAP SuccessFactors Data Architecture, as well as Solution Architecture, HR Process Design, and Organizational Change Management. If you are interested to learn more about how you can ensure not only the success of your SAP SuccessFactors implementation but also your overall HR Transformation, reach out to the SAP SuccessFactors HR Innovation & Transformation team at firstname.lastname@example.org.