This is the first part in my Analytics for Talent Management series. In this part I will cover what analytics actually means, how they differ from reporting and why more organization aren’t using analytics.
For the benefit of those readers whose focus is more on Talent Management than analytics or business intelligence, I thought I would provide a definition of what analytics actually are. Analytics, as defined by Wikipedia, are:
…the discovery and communication of meaningful patterns in data. Especially valuable in areas rich with recorded information, analytics relies on the simultaneous application of statistics, computer programming and operations research to quantify performance. Analytics often favors data visualization to communicate insight.
The clue here is “meaningful patterns of data”. For Talent Management it is important for organizations to understand the patterns between their Talent Management initiatives and the overall value that these initiatives are offering the business. And as someone that spends part of their time working with data visualization solutions, I definitely agree with the last part about data visualization. In terms of analytics, SAP recently received plaudits for their SAP Visual Intelligence solution – although this solution currently does not offer any HR content. Now, in the following few paragraphs of Wikipedia these two sentences in particular stood out to me:
The most common application of analytics is to business data in order to describe, predict and improve business performance.
…analytics is not so much concerned with individual analyses or analysis steps, but with the entire methodology.
I think that it is hard to argue with the above statements and, since robust Talent Management practices support organization’s improving performance and sustainability. Analytics, like Talent Management, is not a single action or process, but an entire methodology around supporting increased performance. This correlation between the two disciplines shows a clear alignment between a Talent Management strategy and an analytics strategy.
What’s the difference between analytics and reporting?
I often see the terms analytics and reporting being interchanged. Coincidentally, while preparing to write this section I came across a recent blog by Bert Laws called Let’s Put Analysis Back into Analytics. In his blog he makes a statement which I think sums this up nicely:
“Simply stated, analytics should be about analyzing something. Similarly, reporting should be about reporting something. When we use an analytics tool to present last quarter’s KPI’s (or measures or metrics or whatever you want to call them) and we let our executives simply view the report (sorry folks, a dashboard is just a report when you use it this way), we are just straight-up reporting – not analyzing anything.”
Here Bert makes the point very well – analytics are not just about seeing what’s happened, but about analyzing how what has happened has affected the business and how this can be used to improve the business. This blog is excellent and there are some very good comments about analytics versus reporting that are well worth reading.
Why aren’t more organizations using analytics?
There are many reasons why more organizations aren’t using analytics. Some organizations aren’t mature enough, some think they know their business well enough, others are not advised well enough, while others simply do not have budget. SAP has tried to address some of these concerns, with varying success. But, if a business doesn’t have the appetite to leverage analytics capabilities then there is little anyone can do to show them the real value.
Part of the reason may be that SAP has delivered a number of different technologies containing varying types of analytics in the past few years. There is no real central or holistic set of analytics in one technology that cover the key metrics in the detail that organizations need them. I am really pleased with some of the technologies SAP has released and obviously each technology has a different use case. However, customers do not want to use multiple tools to get a comprehensive set of Talent Management analytics.
There are other business reasons, such as business not making the business case and that HR, traditionally, has not had a quantifying culture. Typically HR has been a kind of “island” within the organization, but now the waters are receding and HR has to prove its value and force itself to be a player at board room level.
I’m not sure there has been a unified SAP ERP HCM analytics strategy over recent years, but SAP seems to have put a real focus on this area and many of their management team and product owners have become active in providing this information to the SAP HCM community via channels such as SCN and articles in SAP Insider. With a well-organized strategy, SAP HCM customers – and Talent Management customers – should start to get a solid set of analytics solutions that will be built on the same platform for the next few years. I hope to see an end to the “bit part” solutions of the past few years.