Can Data Pave the HRO Path to CHRO? Part 1.
I am futuring here, positing a new path for attaining the top spot in HR through HR data and services delivery. While managing HRO and HR shared services is not on the current career path for becoming a senior HR leader, I would like to speculate on this possible future.
In my February 23, 2010 blog on the Puzzling Puzzle of HR, one of the puzzle pieces I mentioned is the role of business and HR analytics. I firmly believe that better HR data leveraged as a part of HR’s consulting services is core to expanding HR’s business impact. And yet, HR has had a long-term frustrating relationship with even basic reporting, let alone with advanced analytics.
Yesterday I listened to a replay of a Human Capital Institute webcast, “Turning Analytics into Action,” presented by Capital Analytics. The session was about moving up from descriptive analytics to predictive analytics, an important goal. One of the participant polling questions asked about common barriers to improved data use. The top two items were; incomplete or messy data (55 percent) and knowing what and how to measure (27 percent). Those responses are frighteningly telling. If HR leaders are still largely struggling with what and how to measure, and face barriers in accessing the various needed data sources, they must first strengthen their data foundation before they can credibly move up the data value chain.
HR’s current data-related focus is obtaining access to what has happened and moving toward what is happening right now. Its future step is predicting what will happen and advising on how to best prepare, adapt and manage limited resources to achieve business results. A number of HRO vendors want to help HR clients move up the data value chain. For example, IBM, Accenture and Wipro all offer advanced HR analytics as available additional services. Unfortunately, advanced HR analytics are an added cost item, and so far the vendor’s capabilities are ahead of most clients’ willingness to spend, and ability to use and leverage.
The first step is to build the data infrastructure for improved basic HR workforce reporting. And I do mean workforce, not just service silo by service silo. Knowing what data you need, how and where you will get it and making sure it is valid should be a major part of your strategy and planning for HR and HR services delivery. Basic HR administrative software and outsourcing already provide improved reporting capabilities for many buy-side organizations. When selecting HRO vendors, understand what new data and reports will be available, and determine if there will be assistance for the retained organization in learning to use the new capabilities. When transitioning to a new or upgraded HR service platform, take time during configuration and implementation to wire in as many data elements as you can. If you do not collect the data, you cannot later analyze the data.
In part 2, I’ll take a look at why data matters on the path to the top of HR.
Linda Merritt, Research Director, HRO, NelsonHall
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HRO Insights 
May 6, 2010 at 9:29 am
New technologies keep on popping out every day. People are really contributing new ways, not to mention outsourcing strategies and new innovations in HR. IT companies are leading the way to this new world we’ll be facing and we need vast knowledge for us to cope up with it.