Presenting data as information and turning it into knowledge

How HR systems benefit the “C” level executive and where HR fits in.

HR professionals make a fundamental mistake when it comes to HR management systems (HRMS). They seem to think these systems are only for them. That an HRMS provides some foolproof method of reducing their heavy workload and turning them magically into strategic partners at the “C” level of the organization (CEO, COO, CFO, CIO).

The truth is quite different. HR systems may in fact make HR more efficient and reduce workloads but as far as the organization goes, that is only a secondary benefit. Ultimately HR systems exist to aid management in decision-making regarding the deployment of people in the organization.

This is not to say that senior HR professionals are not management. HR staff has a crucial role in producing and analyzing the data for presentation to management. They have a key responsibility in spotting trends and subtle patterns which, when combined with their knowledge of the organization, provide incalculable value for the executive.

However, management will soon spot trends and patterns all by themselves. The HRMS will produce the information they need, and then the job of HR staff will be to answer the tough data-driven questions that the executives will pose.

HR systems are business systems. They are for all members of the organization. Managers, employees and executives alike all need and should have access to the system to enable them to do their jobs. In the “old days” of technology we poked fun at the IT groups in their “glass houses” shielding their technology wards from the rest of the organization. Now HR is in the same situation.

New technologies are emerging to allow business users and executives access to HR data. With appropriate security and user-oriented technology, executives are learning to probe the human resource data and gather key insights.

“But,” you exclaim, “ I know my management team, they will never accept the use of a system. I have to hold their hand just to get them to read a report.” This used to be true, but managers are becoming more technically literate and are insisting that the technology adapt to their patterns of working and not the other way around.

How many of you remember the executive who used to have his secretary print out all of his e-mails so he could read them and then dictate a response? I met a few early in my career. Fortunately, such behaviour doesn’t exist anymore. Most executives use e-mail as a strategic tool. They are surfing the Web as their primary source of information. They buy things from amazon.com and futureshop.ca. They carry laptops, palmtops, PDAs and Blackberrys. They’ve gone wireless and they’re wondering where HR is.

The key to executive acceptance is not the presentation of data. Executives hate data. They want information or even better, they want knowledge. There is a hierarchical relationship between these three items. (The table above presents a simple view of these relationships.)

Data is the simple presentation of demographic information. These are the reports and lists that most HR people compile and present as information today.

Information requires that the basic data be transformed to provide useful insights into broader categories. The information must be manipulated, consolidated and presented in an interesting format to capture executive interest.

At the knowledge level, the information must be interpreted using either internal business information or external market data that presents the implications to management. This is the kind of information management needs.

HR management systems today are beginning to incorporate the kinds of tools that are needed to transform data into information and be able to present it to management on demand. There are also some early pilot projects around transforming information into knowledge. These efforts are very preliminary still require HR staff to interpret the information and communicate the implications to management.

Reporting self service (RSS) is a new tool that allows managers to directly access the simple standard lists and reports that they need in their everyday lives. Within the HRMS, managers can access the system and call up predefined reports that can be viewed on screen or printed.

The system reviews the security authorization that the manager has, granting permission to view data, and then presents her with the report. The manager only sees the employees that report to her and can access all of the information that she needs. If additional manipulation is required the manager can export the data to Excel and transform the data into knowledge using a familiar tool.

In the recent survey, HR Management Systems: Are They Making a Difference?, conducted by Canadian HR Reporter, ARINSO and Perceptor Solutions, a division of Affinity Systems, HR professionals were asked if their organizations were using RSS, and a surprising number of organizations responded positively. Roughly 23 per cent indicated they were using reporting self service, while a further 15 per cent are either using a bolt-on tool or some other method of obtaining the same functionality.

RSS has an impact on a manager’s ability to access their data, but it also indicates a shift in responsibility for HR data from HR to the line managers.

In her response to our survey, Hayley Phillips from AT&T Canada noted, “We have decentralized data input, so the line ‘owns’ their own data. We also have decentralized our report writing tools, so managers can prepare their own reports. We have empowered management and administration.” This is a powerful transformation in the relationship between HR and line management.

Cathy Pederson, systems administrator at the Alberta Energy and Utilities Board, replied in a similar vein. “Prior to implementation, managers would receive pay and job reports on a quarterly basis or upon request. Now the information is available at the click of a mouse. It is HR’s job to provide decision-making information and we are now doing a better job of it,” she said.

RSS works for HR at a simple level. What happens when an executive wants to look at data for the whole company? First, they are overwhelmed by data. They need a tool to summarize it. Second, they expect the data quickly. Third and last, they expect all the data they need and they don’t want to access multiple systems. In this situation, a data warehouse (or its little brother — the data mart) is needed.

A data warehouse is a repository for data separate from your production systems. It is optimized for reporting. HRMS systems are (or should be) optimized for transactions. A data warehouse will let users query the data without bringing payroll to its knees.

Data warehouses can combine large volumes of data both from an HRMS and from other systems, such as a customer relationship management (CRM) system or even end-user office tools like spreadsheets and ACCESS databases. With multiple sources of data, managers can create information and turn it into knowledge.

As an example, managers can take information about product sales and correlate it with information about employee compensation over time to determine the impacts of sales on compensation levels.

In the survey, HR Management Systems: Are They Making a Difference?, participants were asked which tools their organizations were using with their HRMS. Sixteen per cent of organizations responding to this question indicated they had implemented a data warehouse; 20 per cent of the remaining respondents were using either a bolt-on product for this functionality or some other method of getting to the same data. The vast majority (60 per cent) still have not adopted a data warehouse strategy.

Data warehouses are often very useful, where you have multiple locations using different HR and payroll systems, to bring data together for analysis without disrupting existing systems. They can also extend the life of a legacy system by making data more accessible.

Micheal Leduc, manager, systems administration at Montreal’s Concordia University, said their data warehouse allowed HR to provide more consistent information and more timely data. Leduc commented, “Our HRMS was implemented in 1993, and as such was not particularly information friendly. Using the data warehouse for ad hoc reporting (production reports are still performed on the HR system) allows us to make information universally available. The data warehouse is not just for HR but includes data from finance and student administration, as well. Managers can access all the data with appropriate security profiles.”

When a company has a data warehouse in place, a complementary tool is an “online, analytical, processing tool” (OLAP). These tools allow users to look at their data from different perspectives, much like the pivot tool in Excel. First you might want to examine the above data by product line, then by level of income, then by region, then across quarters and so on.

An OLAP, like a Rubic’s cube, allows data to be viewed in different ways to determine if a previously unknown pattern emerges. You twist it this way — no, that didn’t help — so you twist it that way and you see a trend.

In the HRMS survey, only four per cent indicated that they used an OLAP tool to access their data. Interestingly, a higher number of organizations (seven per cent) indicated that they bought an OLAP tool but do not use it.

Data warehouses and OLAP tools may be needed to get information for executive management but they are not the tools for presenting the information. Executives want visual, readily apparent information. They do not want to have to dig for it. Having found an interesting bit of knowledge, they want to be able to drill down on the data so that they understand the information right down, in some cases, to the data level.

For that, a new tool is needed — a portal, and like its namesake, it is a doorway of sorts. By bringing together information on job roles and functions, for example, on one site, a portal reduces the amount of time managers would otherwise spend searching around the organization for the information they need to manage their employees.

For those of you who have used Yahoo, Altavista or MSN, you have seen a portal at work. By mouse clicks you can navigate to the information you need. In a manager portal, the same navigation takes you to your corporate data.

The survey showed that some organizations (14 per cent) have begun to use manager portals as a management tool to access information. There’s still a long way to go because 66 per cent of organizations are not using portals. The remainder use another tool to replicate this functionality.

Alan Jarvis, vice-president of HR for Allianz Canada in Toronto, put in place a portal for managers in his organization. “I prefer to refer to it as the intranet rather than use a technical buzzword,” he explained, but Allianz managers access both manager transactions and corporate information through the Allianz intranet.

“We have linked policy information, directory services and a host of other services all on one page,” said Jarvis. “We have provided services such as access to our share purchase program calculator but now we are adding the ability to link with our external benefits carrier. We have always had direct deposit of our benefits re-imbursement but now we can stop sending the statement to your home and route it to your desktop.”

As managers become more attuned to how their information needs may be met, HR management systems will play a significant role in enabling HR to move to a more strategic value-added role.

John Johnston is the director of strategic consulting and e-HR Solutions for ARINSO International, a leading Canadian HR systems consulting firm active in the implementation of SAP HR/payroll software and the use of innovative Web-enabled systems for HR areas such as e-recruiting, e-learning and employee portals. He can be reached at [email protected] or visit www.arinso.com.

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