HR TECH REPORT: TALENT MANAGEMENT

m a y 2 1 , 2 0 0 7 w w w . w o r k f o r c e . c o m | Workƒorce MANAGEMENT 25

HR TECH REPORT:TALENT MANAGEMENT35% Percentage of companies with

2,500 or more employees that arein the process of implementinganalytics software.S

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30% Percentage of companies with 2,500 ormore employees that indicate they willmake significant investments in analyticssoftware during the next three years.

Keeping scorewith analyticssoftware By Ed Frauenheim

Makers of the cutting-edge talent management applications promise business insights by organizing workforcedata in EASY-TO-UNDERSTAND ‘SCORECARDS’ and ‘DASHBOARDS,’ but many employers remain unclearwhat information they should be looking for.

TODAY’S cutting-edge tech-nology for managing talenthas much in common withcar dashboards and baseballcards. Makers of software tohelp firms recruit, assess,develop and retain employ-

ees are trying to present key data in waysas simple to understand as a speedometeror fuel gauge. And just as baseball cards

combine player photos with importantstatistics, companies can view snapshotsof their team members that include arange of key information, such as salarylevel and performance rating.

Software firm Authoria, for example,allows managers to see an organizationalchart on the computer screen with im-ages of their direct reports presented al-most like baseball cards. Below the photo

of Joe Smith is his job title, performancerating, the amount of time Joe has workedat the company and how long he’s been inhis current position.

This way of organizing information notonly is easy on the eye, it eliminates muchof the grunt work associated with tryingto analyze data stored in paper records,spreadsheets or Microsoft Word docu-ments, says Jeff Cooper, senior business

WORKFORCE DATAMADE SIMPLEClockwise from near right: Authoria presents workforceinformation in a baseball card-style format that includesemployee photos, while prod-ucts from SAP and BusinessObjects offer “dashboards”that display key data in waysas easy to understand as aspeedometer or fuel gauge.

Oracle dash-boards visuallymap data such

as turnover,return on

human capital,employee

productivity,organizational

growth andheadcount by

region and jobcategory.

Source: International Association for Human Resource Information Management and Knowledge Infusion study

Cooper

WORKFORCE MAIN 05-21-07 B 24,25,26,27,28,29,30,31,32,33 WFDB 5/16/2007 9:22 AM Page 2

Project10 5/14/07 2:20 PM Page 1

http://www.authoria.com

consultant at Authoria. In effect, workforce analysis and pres-entation tools like those from Authoria raise the game of hu-man resources managers and other company leaders, Coopersays. “Now that person can focus more strategically,” he says.

Workforce analytics applications refer to software prod-ucts that help a company draw conclusions from its humanresources data. These tools are considered particularly vitalfor the most strategic talent management tasks, which in-clude recruiting the right employees, measuring their per-formance, helping them develop and compensating them ef-fectively. To make smart decisions around hiring, promotionand pay, firms ideally need to sift quickly through data suchas performance reviews, salary levels and even store revenue.

Partly because organizations are eager to make wiser tal-ent management calls, there is growing interest in work-force analysis applications and related “dashboards” or“scorecards.” The momentum also stems from the way suchsoftware has become both more sophisticated and simpler

to use during the past five years or so.Still, some skepticism surrounds the analytics field. Ven-

dors of analytics tools have not always provided effectivesoftware or guidance to customers, expertssay. It remains difficult for large companies togather basic employee data such as head-count—which makes scouring the informa-tion for trends difficult. And it’s not clear thatorganizations know what information theyshould be looking for.

Jodi Starkman, a talent management specialist with con-sulting firm ORC Worldwide, says diving into workforce an-alytics applications can just result in making a bad pro-cess—such as recruiting from poor sources of candidates—more efficient.

“HR is collecting a lot of data,” Starkman says. “But peo-ple are still confused about what kinds of business ques-tions they should be answering.”

HRTECHREPORTTALENT MANAGEMENT

26 Workƒorce MANAGEMENT | w w w . w o r k f o r c e . c o m m a y 2 1 , 2 0 0 7

On the fringes ofthe HR tech marketA COUPLE OF software strangers have come to

town.

Cognos and Business Objects are not as famil-

iar to workforce management leaders as are such

HR application vendors as Oracle, SAP and Suc-

cessFactors. Cognos and Business Objects typi-

cally are called “business intelligence” software

makers, but both vendors make products de-

signed to analyze talent-related information. And

like the proverbial movie strangers who spur self-

reflection and shake up communities, the firms

provide greater insights compared with analysis

tools from the usual suspects in human resources

technology, according to the companies.

Still, it’s not always easy to be the outsider.

Business Objects has seen just moderate growth

for its Workforce Analytics product, even as oth-

er vendors report solid progress. Business Ob-

jects plans to reintroduce its workforce analytics

software this year, says Richard Stocks, the com-

pany’s product marketing manager for analytics

applications. Stocks and his colleagues plan to

clarify that Business Objects makes software of

interest to more than just techies in information

technology departments.

“There’s been a lack of education in the mar-

ket,” Stocks says.

That market is poised to invest more heavily in

software products that analyze workforce data,

experts say. Companies have become more fo-

cused on managing their talent through the use

of metrics. In addition, vendors have made im-

provements to software tools designed to study

the efficiency of HR operations and show the

links between workforce matters and business

results.

In a recent study from the International Asso-

ciation for Human Resource Information Man-

agement professional group and consulting firm

Knowledge Infusion, 30 percent of companies

with 2,500 employees or more indicated they

will make significant investments in analytics

software during the next three years.

The giants of the HR software field, Oracle

and SAP, sell workforce analytics products. Also

offering analytics tools are talent management

specialists that focus on such tasks as recruiting,

performance management and learning man-

agement.

Vendors that limit their wares to talent man-

agement software typically can’t mine data out-

side of the applications they sell, says Farhana

Alarakhiya, associate vice president of analytics

applications at Cognos. In addition, she says her

company’s application is easier to use than ana-

lytics tools from SAP and Oracle and comes with

“high-touch” service.

At the start of a software implementation,

Cognos makes sure to bring together line man-

agers and HR officials to ask what metrics are

most important to them. “Users are getting ex-

actly what they want the first time,” she says.

SAP and Oracle both dispute the portrayal of

their analytics products as hard to use. SAP says

its business intelligence tools have advanced to

be as simple to use as a pocket calculator. Ora-

cle argues that using a third-party analytics tool

can lead to integration headaches.

Cognos launched its workforce analytics appli-

cation about a year ago, and has seen significant

business for it. The company says its tool is used

to track workforce data for more than 500,000

employees and is used by four out of the 10 top

HR outsourcers, including IBM.

Despite less-than-scintillating sales of its work-

force analysis product, Business Objects remains

bullish about the field. Stocks, an outsider to the

HR world, still believes he can help workforce

management professionals see the big picture

more clearly, and have the time to focus on it.

“I always tell people, ‘Analytic applications

give you your job back.’ ”

—E.F.

Starkman

Business Objects dashboard

Cognos dashboard


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FIRMS SHOWING INTEREST

A recent study from the International Association forHuman Resource Information Management professionalgroup and consulting firm Knowledge Infusion suggestsmany companies are not doing heavy analysis of their work-force data. In the survey, which polled IHRIM membersand Knowledge Infusion customers, 52 percent of respon-dents with 2,500 employees or more cited very light to mod-erate assessment of the impact of HR initiatives on businessresults through standard reports and spreadsheets. Twenty-four percent of such organizations indicated they are not

doing this type of measurement at all. Just a quarter of com-panies with 2,500 employees or more had implementedworkforce analytics software.

On the other hand, the study found growing interest inworkforce analytics. Thirty-five percent of companies with2,500 employees or more are in the process of implement-ing analytics software, making it the top category among 12types of HR-related applications. And, the study found, 30percent of companies with 2,500 employees or more indi-cated they will make significant investments in analyticssoftware during the next three years.

One firm dipping its toe into workforce analytics applica-tions is Dallas-based software company Intervoice, whichemploys about 800 people worldwide and whose productsinclude software for contact centers. Intervoice recently be-gan using a dashboard within SAP’s E-Recruiting software.Among the tools available to the Intervoice staffing team area summary of job applications waiting to be processed and

links for recruiters to schedule interviews, says Don Brown,senior vice president of human resources at Intervoice.

Brown has higher aspirations still. He’d like to configurehis SAP software to create an improved dashboard for linemanagers. Already, his manager self-service portal includesopen job requisitions, employee birthdays and service an-niversary dates. He wants to add such information as year-to-date turnover, talent development goals and progress to-ward them, and performance reviews ranked by score andlinked to summaries. “We can justify the funding,” he says,“but we can’t do everything at once.”

PRODUCT CATEGORIES

Analyzing workforce data may be as complex as findingthe most important factors in store profitability or as simpleas generating a companywide breakdown of employees byage. Firms sometimes rely on their existing spreadsheetsoftware to tackle the easiest of these tasks. More sophisti-cated application tools, though, can cost large organizationshundreds of thousands of dollars.

Analysis results can be presented in reports sent by e-mail or posted on a Web page. In some cases, the conclu-sions also can be seen on computer-screen dashboards thatquickly signal whether a particular figure exceeds an ac-ceptable level—say, annual turnover above 10 percent.Dashboards and scorecards, which differ slightly from dash-boards by measuring progress toward a particular goal, of-ten broadcast the status of a particular metric with a greenlight for “OK,” a yellow for “caution” and a red for “trouble.”

Besides slicing and dicing workforce data and presentingthe information back to users, analytics tools can fire off e-mail alerts to employees when danger levels are reached.

Sellers of workforce analytics products divide roughlyinto three categories. The first is comprehensive businesssoftware providers such as Oracle and SAP. The second istalent management specialists including Taleo or Authoria.Then there are stand-alone analysis applications from ven-dors such as Cognos and Infohrm.

Lawson Software is an example of the first group. LikeSAP and Oracle, Lawson makes software to automate vari-ous business areas including human resources, finance andmanufacturing. Lawson, which is based in based in St.Paul, Minnesota, says its Lawson Business Intelligencesoftware allows companies to peer across multiple areas ofthe business to come up with useful information.

Cecile Alper-Leroux, Lawson’s director for human capital



Specialized talent management applications often lack the

ability to compare data from different areas, which is a priority

for customers. “Rather than getting into super-detail in any

one type of product, they want to see how their learning

management, performance management and recruiting data

tie together to meet their business goals.”

—Gretchen Alarcon, vice president for human capital management product strategy, Oracle

Software makers haven’t

done enough to help organ-

izations get the right data

in front of the right people.

“Different stakeholders

need different metrics.

The vendors haven’t really

delivered on that.”

—Jim Holincheck, analyst with research firm Gartner


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management product strategy, cites hiring metrics as an ex-ample. She says Lawson Business Intelligence goes beyondsimply measuring the time it takes to hire someone to consid-

er the effectiveness of the hire—seen throughfigures such as total cost of the employee, howquickly the person became productive and howsuccessful they were in performance reviews.“That’s a much more complex view,” she says.

Oracle also boasts of workforce analyticssoftware that spans the typical “silos” of infor-

mation in a company. It sells analytics tools for both its Or-acle E-Business Suite and PeopleSoft Enterprise productlines, and is working to “embed” analytics in individualproduct modules. For example, its Oracle iRecruitment ap-plication is set up so managers who are asked to approve an

offer letter to a new hire automatically see the range ofsalaries given to employees with similar jobs, says GretchenAlarcon, Oracle vice president for human capital manage-ment product strategy.

Alarcon concedes that vendors specializing in talentmanagement applications such as recruiting or compensa-tion software may allow users to drill more deeply into theinformation presented in reports or alert e-mails. But sheargues that the specialists’ products often lack the ability tocompare data from different areas, which is a priority forcustomers. “Rather than getting into super-detail in any onetype of product, they want to see how their learning man-agement, performance management and recruiting data tietogether to meet their business goals,” Alarcon says.

Adam Miller, chief executive of talent management soft-



Cautious optimismat Cardinal HealthVINCE EUGENIO is on the verge of discovering

a treasure trove of talent management informa-

tion.

But Eugenio, vice president of enterprise

learning solutions for medical products and serv-

ices company Cardinal Health, knows enough

about HR software to realize that promised re-

turns from technology can be elusive. So he’s

both excited and cautious about a workforce an-

alytics application that Cardinal will begin using

soon as part of a new outsourcing agreement.

Eugenio is eager, for example, to get rapid

reports on such topics as how particular training

programs correlate to employee retention,

sales growth and profitability. But rather than

rely solely on the vendors to suggest the best

ways to slice and dice Cardinal’s learning-related

data, Eugenio and his team are doing their own

homework.

“I’ve been in this space 20 years,” Eugenio

says. “I’ve learned a lot of hard lessons.”

Cardinal is one of a growing number of organ-

izations turning to applications to help them

study their data related to employee recruiting,

performance, development and compensation.

Companies have seen evidence that closer at-

tention to their workforce data can help boost

the bottom line, and software to mine that in-

formation and present it clearly has improved in

recent years.

On the other hand, hurdles to wider adoption

of analytics tools include lingering skepticism

about the products and the difficulty of piecing

data together at large, complex companies.

Cardinal, with some 40,000 employees, multi-

ple business units and operations on five conti-

nents, has challenges along these lines. During

the next three years, the company plans to con-

solidate nine separate learning management soft-

ware systems into just one or two, Eugenio says.

Eugenio declined to identify the learning man-

agement application or the workforce analytics

tool being supplied by ExcellerateHRO, which an-

nounced its contract with Cardinal in April 2006.

He did say, however, that the analysis application

is from one of the major vendors of “business in-

telligence” software, whose makers include Busi-

ness Objects, Cognos and SAS Institute.

Cardinal’s combination of learning manage-

ment software and workforce analytics will “go

live” beginning early next year. Its workforce an-

alytics application is an example of a stand-alone

tool, designed to draw data from other applica-

tions holding workforce or business data. Other

vendors of analytics software combine their

data-mining products with talent management

applications or broader business management

software. Eugenio says the product he’ll be us-

ing stands out from analytics tools built into

learning management systems.

“What I have will be exponentially better than

what any learning management system can pro-

vide,” he says. “The analytics tool in the LMS isn’t

dipping into the other systems.”

Eugenio has been at Cardinal seven months.

Before that, he spent several years at staffing com-

pany Randstad, where he honed his data-digging

skills by noticing a link between how thoroughly a

manager trained and oriented new sales profes-

sionals and their overall sales performance. The

program won Randstad an Optimas Award from

Workforce Management in 2006.

Still, Eugenio’s software skepticism persists.

He notes that Cardinal’s learning data won’t ini-

tially be linked to its finance information. He

hopes that will occur down the road.

“I can smell the steak. I can hear it sizzle,” he

says of the new system. “But how is it going to

be cooked?”

—E.F.

Cardinal Healthemployees

KIIC

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Alper-Leroux



http://www.rightthinginc.com

ware firm Cornerstone OnDemand, agreesthat vendors need to provide a range of ap-plications in order for analytics tools to re-sult in the most useful information. ButMiller, whose firm offers software for per-formance management, succession plan-ning, compliance management and com-pensation planning, takes issue with theidea that the big business software playershave an edge in analytics and dashboard

tools. “In virtually every case, it’s much eas-ier to configure, navigate and report in oursystem,” he says.

Also in the mix are companies that focuson analytics tools alone. These include“business intelligence” software makersCognos and Business Objects, both ofwhich make tools for analyzing a range ofbusiness information, including workforcedata. Another analysis specialist is Infohrm,

which focuses on HR and talent manage-ment matters.

Brian Kelly, vice president of sales andmarketing at Infohrm, says his product willgather data from a variety of sources in anorganization. But a key part of Infohrm’spitch is its willingness to consult with cus-tomers about how to use metrics effectivelyin their management style. “It’s not a tech-nology issue at companies,” Kelly says. “It’sa change management issue.”

Companies have been banging on In-fohrm’s door. The firm has seen revenuegrow more than 35 percent annually over

the past three years, and clients includesuch big names as Starbucks, Nokia andTime Warner. Other vendors of workforceanalytics software report growing interestin their products as well. “It gets talkedabout a lot,” says David Ludlow, SAP’s vicepresident of product management for hu-man capital management applications.

On the other hand, Ludlow says relative-ly few organizations have actually put ana-lytics tools and dashboards into place toglean wisdom about their talent. Among thechallenges to greater use of analytics is thatmany companies still make decisions aboutthings like succession planning and perform-ance management on paper or in spread-sheets, where data is hard to retrieve, hesays. “You can’t have analysis unless you au-tomate these processes,” he says.

Another obstacle to the adoption ofworkforce analysis software is that the toolsaren’t always easy to use. Authoria, for ex-ample, offers clients a variety of “pre-baked” reports designed to be simple to ac-cess and comprehend. One such report,intended to aid in succession planning,plots out employees on a grid showing bothperformance rating and potential. But us-ing Authoria’s software to ask more com-plex questions takes sophistication, such asunderstanding how to construct a multi-variable search.

An example of such a search would bean attempt to find, for a given job family, all



“If HR leaders don’t know

what to do as a result of

the metrics, then having

them doesn’t matter.”

—Naomi Bloom, Bloom & Wallace


http://www.paragoncri.com

the employees and external candidates whomeet criteria around current location, will-ingness to relocate, length of service andperformance record. Cooper says HR “su-per users” and other champions of the toolare the ones likely to do such ad-hoc dig-ging, which can lead to important insights.“Yes, it requires some understanding to cre-ate a complex, multi-variable search fromscratch,” Cooper says. “And rightfully so.”

Vendors of analytics tools also must over-come some residual distrust, says Jim Holin-check, analyst with research firm Gartner.He says vendors haven’t always doneenough to help organizations get the rightdata in front of the right people, whetherthey are the HR director, CFO or chief ex-ecutive. “Different stakeholders need differ-ent metrics,” Holincheck says. “The vendorshaven’t really delivered on that.”

Along these lines, Lawson is working onspecific role-based dashboards, such as onesfor compensation analysts or recruitingmanagers. But the company’s Alper-Lerouxsays there is a limit to the effectiveness of“canned” reports and dashboards. She saysLawson delivers about 275 preconfiguredreports, but the nuances of every businessmean clients almost invariably want to buildtheir own metrics. “More than 50 percent ofour customers use 25 or fewer of those re-ports out of the box,” she says.

Some analysts, though, question thewisdom of HR departments in choosinghow to analyze their talent managementdata. “If HR leaders don’t know what to doas a result of the metrics, then having themdoesn’t matter,” says Naomi Bloom, manag-ing partner at Bloom & Wallace, a consult-ing firm in Fort Myers, Florida. “The miss-ing piece is the business savvy.”

EARLY RESULTS

Infohrm’s Kelly says clients thus far havefocused on very basic data chores. “You’d beamazed how many companies struggle toget an accurate headcount figure,” he says.

There was a flurry of activity aroundworkforce analytics about five years ago,

followed by a lulland now growingattention to thetopic, Kelly says.He expects that

attention to continue, in part because casestudies of early adopters are persuasive.

In one example, a large retail client ofInfohrm analyzed its data to determine thatthe greatest factor in store revenue andprofitability was manager tenure. That sort

of insight allowed the firm to do more tohold on to its store managers, Kelly says.“They know which levers to move,” he says.

Holincheck says interest in analyticswill follow the course of companies’ now-common adoption of recruiting, perform-ance management, learning managementand compensation management software.“We’re where talent management wasthree to four years ago,” he says. “It’s going

to be a mainstream thing that people areinterested in.”

In other words, it soon may be as normalto have a dashboard in front of you at workas it is to have one in front of you whiledriving there. wƒm


m a y 2 1 , 2 0 0 7 w w w . w o r k f o r c e . c o m | Workƒorce MANAGEMENT 33

E d F r a u e n h e i m is a Workforce Manage-ment staff writer based in San Francisco. To com-ment, e-mail [email protected].

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HR TECH REPORT: TALENT MANAGEMENT