Whitepaper

Using Analytics to Achieve the Greatest Value for Workforce Initiatives

Introduction
As depicted in Moneyball by Michael Lewis, Major League Baseball captures every move made by every player during every game. It then crunches this information to determine a players and teams weaknesses, strengths and performance in given play situations. Based on this predicted performance, coaches determine who their starters should be against a particular team and even how much players should be paid.1 In order to be competitive in the 21st century, companies have recognized the need to use the information they have been assembling over the years and put it to better practice than merely populating a database. However, not many organizations are equipped to conduct in-depth analysis of their workforces, let alone have the ability to connect learning and development to business outcomes. As in Moneyball, analytics distills a massive amount of data into actionable information, allowing both HR Managers and L&D Managers to be part of an organizations starting lineup.

When BI and analytic capabilities are integrated into business processes, decisions are more repeatable, scalable, traceable & accurate. Gartner

Analytics vs. Reporting

Most Learning Management and Talent Management systems have built-in reports; this is a known and established fact. The challenge is that most of these systems are data-rich but information-poor. They collect and store thousands of data points of learning activity and process, but rarely present the data back in an informative way that allows business decisions to be made. Most of the reports included in the system are activity-based. These types of reports are valuable in helping leaders to manage the learning environment, but they dont actually help them lead. Static reports alone will not give you the total solution you need to make businesscritical decisions. More importantly, many business leaders often think of a report when they talk about analytics. However, the report will only identify facts, and when the facts look odd, the fire drill begins to determine the cause. A report is the result of a simple tactical question, and before you can create a report you have to dive into the information to understand what the answer is that you are looking for. From there you can create a report to view that information, even schedule to have it delivered to you on a regular basis. Typically, reports are used to provide a list of tactical or operational information a list of who has registered for an activity or what users have what skill sets.

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Using Analytics to Achieve the Greatest Value for Workforce Initiatives

The following figure shows the progression gained as organizations transcend from operational / tactical reporting to strategic decision making with analytics.

Visibility Pre-built Static Reports Volumes of data Configurable Ad-hoc Reporting Scheduled Distribution

Analysis Interactive Dashboards Key Performance Indicators (KPIs) Historical Trending Alerts

Strategy Target and Benchmarking Top & Bottom Performers Proactive Strategy and Planning

Excellence Management & Operational Excellence Actionable Intelligence Continuous Improvement

Figure 1: Transition from Reporting to Analytics

Reporting supplies you with what is happening versus figuring out why it has happened, and, even more importantly, how you can work to fix or better the results. Reporting solutions will help you measure performance of various business entities relative to a business plan or target. It will help you convert data into information, where as an analytical solution will help you turn information into knowledge, and with knowledge comes power. While reporting presents you a clear view into the past, analytics provides you the vision to see where you are going. Consider analytics to be the antithesis of reporting, in that it strives to encourage people away from passive number review and toward an interaction with the data. Analytics gives you the ability to mine information from many different viewpoints, simultaneously if required, in order to arrive at genuine insight that everyone can communicate and act upon.

REPORTING
What happened? When did it happen? How many? How often? Where? Where exactly is the problem? How do I nd the answers?

Questions Answered by

Information is Power
Would you drive at night without your lights on? This is no different than allowing your organization to blindly locate opportunities that have a direct impact on business performance; increasing the risk of investing time and energy in areas that may not truly be a priority. Every day, management asks itself to do more with less, and every day, organizations turn to analyzing their current processes and programs to find those diamonds in the rough. With analytics, organizations are able to analyze, interpret and make the best possible decisions and recommendations based on factual data, eliminating the use of gut instinct or intuition. According to Predictive Human Capital Analytics Survey, April 2010, less than a quarter of companies (24 percent) make human capital decisions based on data. High market performers are starting to turn data into power by analyzing information and addressing challenges such as those defined below.

Questions Answered by

ANALYTICS
What if these trends continue? How much is needed? When will it be needed? What will happen next? How will it affect my business? How do we do things better? What is the best decision for a complex problem?

Program Effectiveness and Alignment: How can we

make continuous improvements to the programs, processes and organization to become more effective and aligned with business goals?

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Using Analytics to Achieve the Greatest Value for Workforce Initiatives

Program Design and Delivery: Which elements in a

program work well and which do not? How does our delivery model work well, and where can we improve it? Which instructors or facilities are performing well or poorly?

Program Efficiency: How well are we utilizing our

financial and human resources? Are we leveraging e-learning in a cost-effective way? Where can we save money and create higher value for lower cost?

Operational Effectiveness: How well are we contributing

to our organizations strategic goals? How well are we meeting our operational business plan for learning? Where can we improve our time-to-market, attainment of our training objectives, and alignment with other HR or talent initiatives?

Line-of-Business Results: How well are line-of-business

managers completing their training goals? Are compliance programs being met and, if not, why not? How well is training meeting the needs of performance planning and development planning? Are your programs meeting the organizations needs for skills gaps and strategic development? Human Resource departments are turning to analytics as game changers in driving business strategy. HR professionals need a consistent analytical point of reference to make human capital decisions that impact business results.

Identify Top & Emerging Talent

Identifying top performers with performance ratings, assessments and succession plans

Drive Employee Engagement

Improve Retention

Fill Leadership Gaps

Enable real-time talent mobility

Assess rating distributions to assure appropriate and effective rewards allocation

Leverage performance and succession assessments with leadership planning

Developing top talent with career development and personalized learning paths

Modify or equalize accurate compensation with performance-based compensation planning

Align individual mobility opportunities to support business strategy

Align career development planning with succession potential

Figure 2: Aligning HR Priorities with Business Objectives

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Using Analytics to Achieve the Greatest Value for Workforce Initiatives

The first thing an organization must do is determine what workforce-related initiatives it needs to improve upon and how addressing those will impact organizational effectiveness. In todays volatile business climate, it is imperative to show the value of the HR function, particularly with major HR initiatives and projects. Success depends on the ability to measure how much value HR creates for the business in terms of standard financial indicators. During this phase, human resource leaders should ask questions such as:

Does my organization have a sufficient number of individuals

with the right skills to support a new product launch?

What training interventions would be most useful to

increase the productivity of my offshore contact center?

Which recruiting channels are providing me with the most

effective sales leaders after three years at the organization?

What are the factors that differentiate higher-performing

managers in my most productive branches?

What percentage of my engineering workforce is eligible

for retirement in the next three years, and what is the propensity of eligible engineers to actually retire? Most organizations are awash in financial data and deficient in measures of nonfinancial performance. And a large proportion of the measures they do track are not strategically relevant. With too much data and too little useful information, many organizations must start their improvement processes without 100 percent of the right measures in place. What is the best purpose of measuring the value of learning? At the end of the day, the simplest answer is most likely the correct answer, and in this case, the purpose is to increase the value learning adds to the business through the increase of effectiveness of learning and its efficiency. In short, measuring value is fundamental to running learning and development as a professional business function. It is not to justify what L&D has done historically, although that would be a by-product. It is about shaping and magnifying the value L&D adds in the future through answering questions similar to the following:

How much money to spend on a given program? What vendors to select for content? What blended learning mix should we use? How do we measure which groups need help? How do we drive completions? How well did people learn? Who? Why? How can we reduce the cost of this program? What business impact did it have?

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Using Analytics to Achieve the Greatest Value for Workforce Initiatives

Manufacturing Example
Analytics represents the discipline of correlating and analyzing large quantities of data that may originate from diverse and divergent locations, in order to identify trends and opportunities for innovation and mission critical strategic improvement. In other words, with analytics, leading organizations can create causal relationships between the efforts they make toward objectives and the results they produce. As a demonstration of how to link learning outcomes to business results, consider a typical manufacturing organization. A key cost and quality objective in manufacturing is minimizing error rates during the manufacturing process. Measuring how learning management affects this objective is therefore key to the bottom line. With a talent-based learning system, measuring how learning management impacts this result is a simple process.

Set an organization goal: Establish an organization-wide goal to reduce manufacturing

error rate by 20 percent.

Cascade goal to everyone involved: Next, the organizational goal is cascaded down to every
employee involved in the manufacturing process.

Execute training: Create and execute the training programs that are designed to
reduce manufacturing error rates.

Set up metric that compares average test scores against

goal achievement:

The holy grail of training measurement has always been the dream to directly correlate training to business impact: sales revenue, productivity, turnover, product quality. Bersin & Associates

Since all data for both goal achievement and training

results are held in one system, it is easy to run a report that compares average test scores in the training program to employee goal achievement.

At the End of the Day

Identify what you want to measure, what information makes up that measurement and where the information is going to be tracked across programs and operations. The objective of analytics is to allow any business person to understand whats going on in his or her realm of responsibility:

How much did something cost? What were the components of the cost? Who took or completed a learning offering? What can we do to improve it?

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Using Analytics to Achieve the Greatest Value for Workforce Initiatives

Companies are concerned with acquiring the RIGHT talent, retaining top talent and developing future talent. Leadership intuitively knows that the better the talent IN the organization, the better the results FOR the organization. There is NO SILVER LINING for metrics and measurement programs these need to align with your organizations business initiatives and goals answering the most important questions.

76 percent say they have to wait or that it is difficult to get data into the right graphs, charts and scorecards when they need it

Only 30 percent are able to get the data themselves, without technical assistance

87 percent felt they could improve the way they leverage HR data in their systems to drive business decisions

Figure 3: Survey Conducted by HR Executive, February 2010

So what is the risk or more accurately what is the dollar value your organization will throw away because they are not willing to implement an analytics platform that can provide actionable information that influences the effectiveness of decision making and operations?

Upper management would not have information to improve

the quality of their business decisions

Customers would not be able to measure and manage their

workforce assets to be competitive

Managers might now have access to metrics that are useful

and that can be acted upon (right here, right now)

HR metrics would not be aligned with key business drivers

for positive revenue impact

Making Decisions with SumTotals Strategic Workforce Analytics

SumTotal Systems Strategic Workforce Analytics is a complete package that puts proactive control directly into the hands of executives and business managers, providing an avenue of strategic planning, ultimately managing an organizations human capital more effectively.

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Using Analytics to Achieve the Greatest Value for Workforce Initiatives

Most Comprehensive Strategic HCM-Talent Data Warehouse

200+ HCM interlinked business objects across learning, performance, succession, compensation hiring and career development Rationalized data and security across data and analytic objects allowing single objects to support multiple audiences

Access to Template & Ad-hoc Key Performance Indicators

Flexible and quick ad-hoc KPIs and reports enable dynamic analysis Leverage established KPIs to instantly uncover trends and patterns to make better decisions and proactively address issues before they become major problems

Integrated with External Business Data

Simple and straight forward process allowing you to add any external data source and create integrated reports Data locked in business ERP systems can be integrated for overall operational efficiency and alignment with corporate strategy

Actionable Intelligence for Execution Excellence

Drill through to detail transactional information for additional Drive closed loop execution and continuous improvement with integration transactional actions from reports Everyone from supervisors to C-level executives instantly gains strategic insight into the organization with secure, role-based access to more than 100 key performance indicators, reports and dashboards. Pre-defined reports and dynamic dashboards enable users to easily drill down through charts, graphs, and scorecards and pivot across multiple dimensions to quickly find the information they need to make sound business decisions. Users instantly uncover trends and patterns so they can make better strategic planning decisions and proactively address issues before they become major problems.

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Using Analytics to Achieve the Greatest Value for Workforce Initiatives

Figure 4: SumTotals Strategic Human Capital Management Suite

Analytics can illuminate high-level questions about investment optimization, company strategy alignment, customer satisfaction, market condition influence and key performance factors, but only if decision makers can see across regions, business units, or processes and consider information from the enterprise perspective.

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Using Analytics to Achieve the Greatest Value for Workforce Initiatives

Problem

SumTotal SumTotal Solution T To

Cannot Get Integrated Data for HCM

No Analytics
HRMS Succession

SumTotal Strategic Workforce Analytics

Recruiting

LMS

Integrated Powerful HCM Database

Perf.

Comp.

Single data warehouse with LMS & Talent Data

Impact

Results

Inconsistent / poor data quality

Single source of truth across Learning & Talent

Figure 5: Challenge Solved by Strategic Workforce Analytics

The figure above is just one example of how Strategic Workforce Analytics can take a business pain of segregated data and turn it around and provide integrated data in each and every component of workforce planning from hiring through retention through compliance. Measurement will continue to take a front seat in communicating the importance and pertinence of workforce aligned with core business objectives. In business, the bottom-line is still king and organizations must demonstrate how much they contribute to the revenue stream and help decrease costs. Let SumTotal Systems help you manage your most important assets to their fullest potential, using key performance indicators such as those defined in the figure below.

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Using Analytics to Achieve the Greatest Value for Workforce Initiatives

HR
Pay for Performance
Ratio Performance Turnover Average # of Successors per Organization Company Attrition %

L&D
Compliance % Assigned Training Number of Hours of Training Per Month/ Quarter/Year Compliance % Trendbased on Certification Expiration Date Trainings Satisfying the Particular Competency

External
Training Budget per
Organization

Time to Productivity
per Organization Due to Training

Sales Booking Change Customer Satisfaction

per Organization

Figure 6: Sample KPIs from Strategic Workforce Analytics

Pre-defined reports and dynamic dashboards enable users to easily drill down through charts, graphs, and scorecards and pivot across multiple dimensions to quickly find the information they need to make sound business decisions. The following are important business drivers that we deliver through Strategic Workforce Analytics:

Quick Visibility Reporting - Effectively communicate

the right information to the right people via targeted alerts and reports to optimize processes and ensure compliance to proprietary, industry and regulatory standards.

Linking Learning and Talent to Business Results

- Executives and managers across the organization uncover trends and patterns workforce planning has on core business data so they can make better strategic decisions and proactively address issues before they become major problems.

Actionable Intelligence Quickly and efficiently close

the loop between problem awareness and resolution via deep link shortcuts to specific areas within learning and/ or talent management systems without involving your IT department.

Faster Time to Value Instantly gain strategic insight

into the organization with secure, role-based access to out-of-the-box dashboards and reports including an extensive KPI library.

Single Source of Truth Optimize workforce planning

through HCM interlinked business objects supporting HRMS, TM and LMS in a single repository.

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Using Analytics to Achieve the Greatest Value for Workforce Initiatives

Endnotes
1

Ira Boudway, Baseball Set for Data Deluge as Player Monitoring Goes Hi-Tech, bloomberg.com, http://www.bloomberg.com/news/2011-03-31/ baseballis-set-for-deluge-in-data-as-monitoring-of-players-goeshi-tech.html, March 31, 2011.

More Information
For more information, send an email to connect@sumtotalsystems.com

About SumTotal
SumTotal Systems, Inc. is the global leader of strategic Human Capital Management (HCM) solutions that provide organizations with a new level of visibility to help make more informed business decisions and accelerate growth. Recognized by industry analysts as the most complete solution, SumTotal provides full employee lifecycle management, including a core system of record, from a single provider for improved business intelligence. The company offers customers of all sizes and industries the most flexibility and choice with multiple purchase, configuration, and deployment options. We have increased the performance of the worlds largest organizations including Sony Electronics (NYSE: SNE), AstraZeneca (NYSE: AZN [ADR]; London: AZN), Amway (KUL:AMWAY), Seagate (NYSE: STX), Dell (NASDAQ:DELL), and Google (NASDAQ:GOOG). For more information, or to request a demo, please call +1 (866) 768-6825 (US / Canada), +1 (352) 264-2800 (international) or visit www.sumtotalsystems.com

Corporate Headquarters
SumTotal Systems, Inc. 2850 NW 43rd Street Suite #200 Gainesville, FL 32606 USA Phone: +1 352 264 2800 Fax: +1 352 264 2801

EMEA
SumTotal Systems, UK 59-60 Thames Street Windsor, Berkshire United Kingdom, SL4 1TX Phone: +44 (0) 1753 211 900 Fax: +44 (0) 1753 211 901

APAC
SumTotal Systems India Pvt. Ltd. 7th Floor Maximus Towers Building 2B, Mind Space Raheja IT Park, Cyberabad Hyderabad, AP-500081, India Phone: +91 (0) 40 6695 0000 Fax: +91 (0) 40 2311 2727 2012 SumTotal Systems, Inc. All rights reserved. SumTotal, and the SumTotal logo, are registered trademarks or trademarks of SumTotal Systems, Inc. and/or its affiliates in the United States and/or other countries. Other names may be trademarks of their respective owners. 12_0301LS

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