Monday, April 26, 2010

BI and KM Can Make a Difference in HR Organizations and in the Enterprise

Tom Malone, the CEO of Accero, provided a guest post titled, "Why Business Intelligence is Failing HR Managers," at Steve Boese's HR Technology blog.

Tom's premise is that "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?"

I agree that tools will not "help HR managers pull up a seat to the table."  Thomas Wailgum wrote an excellent article on this challenge at titled "BI's Dirty Secret:  Better Tools Are No Match for Bad Strategy." I also agree with Tom Malone that, for most HR departments, easy-to-use BI tools and pre-defined solutions are lacking.

However, the fact that HR and 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 tools (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.

These challenges present opportunities for innovation and the achievement of business goals.  A "seat at the table" will be earned by demonstrating value that comes not just with strategic insight but also by showing how that insight can lead to improved outcomes in the enterprise's business goals and supporting programs and services.

BI can make a significant difference in HR organizations and in the larger enterprise.  One example is talent management. Businesses, including government agencies, are focused on attracting and recruiting high quality candidates and then professionally developing and retaining those employees.  A HR / talent management question might be, "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.

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.  This presents an excellent opportunity for the enterprise to leverage the knowledge that these personnel have.  Their input is key to identifying attributes that, from their perspective, have a strong impact on employee performance and program and service performance. In effect, by doing this, the enterprise is building the foundation to effectively use knowledge management practices to support enterprise initiatives and impact outcome performance.

Hypotheses would be established based on collective input 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."

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, supported by the knowledge inherent in the enterprise, that make sense for the HR organization to undertake that offer the greatest opportunity to succeed.