1 Twelve years of CedarCrestone HR Systems Survey are available at

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3 In today s economy, it s critical for organizations to make employee retention and development a major business focus, to ensure that valuable employees are not lost as the economy improves. However, many organizations struggle to understand their workforce the performance and productivity of the workforce, the applicants they are recruiting and retaining, the internal talent they are grooming for career advancement, and the compensation and benefits that allow the organization to be competitive in the marketplace. As we transition from retrenchment to growth, organizations have an opportunity to excel instead of just survive. In past downturns, organizations slashed training programs, benefits and compensation, and people in across the board reductions. This time, organizations are still turning to cost cutting measures and reductions in staff and services, but with a difference. This time, they can sift through far more data and crunch far more numbers to determine who is performing and who will be needed, with what skills, in the future. They can look at which people are achieving their performance goals and see which of them have the competencies that will be needed for today and tomorrow to build competitive advantage. This time, with a view of competencies in place and skills needed for the future, along with performance metrics, organizations can thoughtfully manage their workforce with training, development, benefits, and compensation. And, they can see the value this support delivers. This time, organizations can be supported by workforce analytics to drive return on human capital investment today and into the future and to see the value the workforce delivers to organizational performance. This paper will introduce Oracle s comprehensive HR Analytics offering and show how the increased power of having metrics and analytic insight can align core HR business processes with organizational goals and strategies and help ensure organizations make the right business decisions today for tomorrow. The reason organizations adopt technologies should be to improve organizational performance. But, proving to the C-level that technologies contribute to organizational performance is difficult at best. However, there are some sources that contribute insights into the value of HR technologies. These insights have to do with how best practices contribute to performance. A quick Google search shows over a dozen definitions of best practice, with the first being that a best practice is the belief that there is a method, process, activity, incentive, or reward that is more effective at delivering a result. Those of us in the HR and HR technologies fields believe there are a set of practices and technology adoption that are best and we are beginning to see consistent and irrefutable proof of the benefits of these practices and technologies. The CedarCrestone HR Systems Survey 1 is the longest running and broadest survey that covers adoption of HR technologies and the value organizations achieve from their usage. While we recognize that HR technologies are not all that drive value in organizations, their adoption and how they are deployed clearly appear to be part of a cluster of factors that embody best practices. We are not alone in this recognition. According to the Hackett Group, a best practice organization is one that leverages/exploits existing/emerging technologies. 2 For the past few years of conducting the CedarCrestone HR Systems Survey, we have seen that organizations with certain key HR technologies have better financial metrics than organizations without these technologies. 1 Twelve years of CedarCrestone HR Systems Survey are available at 2 The Hackett Group, Best Practices Defined, 3

4 Organizations that move to employee and manager self service and to shared services with an automated help desk for HR are able to serve more employees with fewer HR administrative staff than those without. These organizations also have higher operating income growth than organizations without these technologies. This is a consistent finding since Organizations with competency management have significantly higher sales growth than those without. This is a consistent finding since our 2005 survey. Organizations with competency management as the core of any talent management approach are able to assess which competencies it needs to plan for, recruit for, develop for, and pay for. Moving to codify competencies and using that information to drive a talent management strategy is impacting these organizations ability to improve their financial performance. These organizations have the right people with the right skills working on the right objectives and are able to pay them right. The more an organization knows about its competencies, any gaps, and what competencies contribute, the better it becomes. Integration matters. Since 2007, we have seen that organizations that have integrated their talent management processes with each other, to their HRMS, and to the business intelligence environment have standout financial performance on revenue, sales, and operating income growth. Organizations with more than the average BI applications in place have higher one and two year sales growth than organizations with less of the applications. Since 2007, the CedarCrestone annual survey has also reported that organizations with some key business intelligence applications have standout sales growth. The average number of BI applications in use of the fifteen we track today is five. The applications that consistently contribute to the highest one or two year sales growth and higher sales per employee include operational and ad hoc reporting; middleware technology that does the heavy lifting of extracting, transforming and loading data from multiple sources into reportable formats; an HR warehouse that stores workforce and performance data; and workforce analytics. Organizations that use these BI applications are managing with metrics and analytics. Analytics matter! Again, we are not alone in this finding. IDC research conducted in 2008 suggests a statistically significant link between analytic orientation of an organization and its competitiveness 3. By using analytics, organizations can more effectively manage and improve performance, becoming best practice organizations. HR analytics can help an organization improve its profitability through more effective workforce cost control, balancing the lowest effective headcount while ensuring satisfactory service delivery, thereby appealing to the CFO. Executives, the CHRO and line managers can see top and bottom-performing employees to better develop and retain key talent pools, addressing any retention trouble spots or looming gaps in needed competencies. Executives and managers can better understand the causal effect of workforce investment on operational results; for example, balancing contact center performance, such as average cost per call and abandonment rates with and without additional training to customer satisfaction levels and service delivery costs. Now, more than ever, action on issues must be immediate. Organizations need analytic solutions that provide proactive, event-based, and scheduled alerts, delivered directly by , cell phones, or to personalized dashboards. If overtime levels on a hospital floor, for example, are in danger of exceeding budgeted levels, an analytics solution should send an alert to the scheduling nurse and financial officer. With this information, they can quickly correct the deviation, examining alternatives to paying overtime such as hiring independent nurses or more full-time staff, and as a result, profit margins can be preserved. 3 Improving Organizational Decision-Making through Pervasive Business Intelligence: The Five Key Factors That Lead to Business Intelligence Diffusion, IDC multiclient study, November

5 In the recent 12 th annual CedarCrestone HR Systems Survey 4, organizations with such push technology outperformed organizations without these technologies on one and two year sales growth as well as average sales per employee by 35%, 37%, and 37% respectively, a significant difference for the past year. Alerts matter! The core processes of HR, similar to a supply chain, are ultimately to optimize the workforce through adroit processes to acquire, develop and pay the workforce while complying with statutory requirements. Each of these processes has a set of business objectives and sometimes there are issues in meeting those objectives. Organizations can use analytics to dig into the issues of each process, using an analytical workflow that guides users to answer questions about each area, to gain insights from available information to then take action. For example: Optimize: To meet the business objective to develop a strategic workforce plan, planners can juxtapose workforce composition to external data on how the workforce will be impacted by population aging. With this information, they can identify key positions for succession planning. An analytical workflow would guide the planner through assessing the current headcount level, turnover trends, and projected turnover so that workforce capacity can be forecasted. The planner can factor in workforce compensation and develop forward looking scenario-based workforce plans, varying the workforce cost structure to determine the best future scenario. Acquire: To meet the business objective of having an efficient, cost-effective, and scalable recruiting process, recruiting specialists can see into the recruiting pipeline to develop a recruitment plan. Starting from a high-level metric of new hires, an analytical workflow would guide them to drill down to see the best recruiting sources and candidate pipeline for specific jobs along with such metrics as average time and cost to hire, to determine the best candidate source. They can also view successful candidate profiles, matching to current workers in comparable roles, and then conduct a competitive offer analysis to support a hiring decision that balances between acquiring the new hire, while not alienating and disengaging current talent in similar positions. Develop: To meet the business objectives of both developing workforce capabilities while increasing workforce engagement, a learning strategist would want to assess the organizational skills and experience levels and organizational strengths and weaknesses. Starting with an organizational skill map, the strategist would want to assess the effectiveness of learning programs, development plans, and employee potentials to help employees understand development and career opportunities available to them to optimize the overall skill portfolio. To ensure engagement, the strategist might also wish to determine the top performers and what development activities helped them become top performers. With this information, they can develop a top performer profile. The development group can then use that performer profile to make recommendations for new hire training that builds a new set of top performers. Pay: To develop competitive compensation that drives business results, the compensation manager would want to view total employee compensation throughout the organization hierarchy, drilling down to see pivotal groups that drive performance in order to focus on compensation-sensitive groups. With guided analysis to show the correlation of pay with performance, pay with retention, and pay with new hire attraction, the user would be able to predict the effect of compensation on retention and performance. Pulling in company pay levels, a compensation specialist could compare these compensation results to market compensation levels and then model compensation to see the effect on budget. The user would then be able to adjust compensation that will sustain organizational performance at a competitive level neither too high nor too low. 4 CedarCrestone HR Systems Survey, 12th Annual Edition 5

6 Comply: To meet the business objective of recruiting and promoting a diverse workforce, the HR specialist would want to monitor demographics of candidate pools and the demographics of the workforce and from these, fine tune the diversity hiring plan. To meet the objective of reducing accidents, a specialist might want to see accident trends and assess safety and health risks of the workforce and then develop a health and safety risk mitigation plan. To ensure license compliance, compliance specialists would want to see at a glance licenses out of compliance. By being able to see which employees licenses are going to expire they can then alert managers and employees of the need for license renewal. Or these compliance deviations can generate automatic alerts. Analytical workflows and embedded decision support are a key part of emerging user interfaces. What does an analytical workflow look like? In the example in Figure 1, the analytical workflow that comes pre-built with the Oracle HR Analytics product, addresses the objective of ensuring that Human Capital is leveraged properly, guiding the user from the summary level to detail stored in the Human Resources transactional system. Along the way, it helps HR or executives to answer questions they might have about turnover and staffing. It starts at the highest level the Business Objective/Issue level, and then guides users to explore the issue by enabling them to drill down from that high level to see the turnover data underneath. Users can thus gain insight and even take action into the transactional system, as appropriate, to address the issue. An issue of leveraging human capital effectively of any organization is turnover. Is turnover within manageable limits? So, in the first table at the top right of the workflow in Figure 1, an analyst is able to view at a glance a turnover dashboard with some key performance indicators. At a glance, the analyst can see that voluntary turnover shows red, meaning that it is trending up, beyond acceptable limits. These limits can be established by each organization. Since voluntary turnover has increased, the logical next question is why are people leaving? The user can drill into detail in the radar chart to see the reasons. Then, rather than look at everyone, the analyst can look at which groups are affected and quickly see which group has a disproportionate number of employees and see that their salaries are well below the mid-point of a competitive range. The user can further drill down to actual employee job summaries to see compensation and how it compares to peer groups. From this information, the analyst can begin to see whether individual salary actions are needed, or perhaps an overhaul of the compensation program is required. If individual salary actions are required, the analyst can notify the supervisor to take 6

7 action at the transaction level into the system of record by adjusting a salary. By taking action, the supervisor is able to effect a change in the organization for the better. Oracle HR Analytics with its tight integration between the business intelligence environment and the transaction system enables organizations to close the loop of this particular issue, by enabling action. Oracle HR Analytics supports the organization from insight to action with pervasive integration among data sources and guided analytical workflows. Each part of any of the analytical workflows is supported by pre-built reports and navigations that allow users to easily drill to further levels of detail to answer questions. Workflows capture information at the transaction line level so that users can easily drill from the summary information to the most detailed level of information required. Ultimately this allows users to not only monitor progress on addressing an issue at a high level but to easily navigate to the right information so that in the end, any required corrective action can be proactively taken and recorded back into core systems as appropriate. Oracle Human Resources Analytics provides insights from metrics to drive organizational performance that balance cost efficiency with the best ways to develop and deploy an agile and high-competency workforce. The product integrates data from across the enterprise s systems, transforming silos of data into timely and actionable insight. Oracle Human Resources Analytics is tightly integrated with Oracle transaction systems to leverage the value of existing data and to eliminate the inefficiencies of data silos. It can pull in HR, financial, customer retention, talent management data, from both Oracle and non-oracle systems, truly giving a comprehensive and seamless view of information about your workforce. Oracle Human Resources Analytics offers seven subject areas (absence, compensation, HR performance, learning enrollment and completion, recruiting, US statutory compliance, and workforce performance), nine dashboards, over 200 reports, over 300 metrics, and over 600 dimensional attributes. See Figure 2 for an overview of Oracle HR Analytics. Overview Subjects 7

8 Oracle Human Resources Analytics provides organizations with detailed analysis on workforce performance and HR programs. It provides complete, real-time and enterprise-wide insight for all users, enabling fact-based actions and intelligent interaction. The prebuilt solutions, comprised of dashboards and logical analytical workflows, are designed for rapid deployment at a low cost of ownership. For HR, these cover best practices and areas of analysis identified by countless Oracle customers. There are four components: 1. Pre-built warehouse with five star-schemas designed for analysis and reporting on HR data (workforce profile, payroll, absence, recruitment, and learning). 2. Pre-built ETL (extract, transform, and load) to extract data from over 3,000 operational tables and load it into the data warehouse, sourced from HCM and other systems and sources. Oracle HR Analytics comes with pre-built integration with Oracle EBS, PeopleSoft and universal adaptor to non-oracle sources into the integrated data warehouse. It integrates with Oracle EBS , R12, and R12.1 and PeopleSoft Enterprise 8.9, and 9.0. Integration with the newlyreleased PeopleSoft Enterprise 9.1 is in development as of release of this whitepaper. An Informatica OEM PowerCenter ETL Server is a required tool for managing the source-to-target data extraction and loads. The ETL tool handles the data loading and mapping using pre-built and delivered jobs that fully understand Oracle source application as well as external systems. 3. Pre-mapped metadata, defining real-time access to analytical and operational sources, embedded best practice calculations and metrics for the HCM practitioner. These cover the presentation layer, a logical business model, and physical sources. 4. A best practice library of over 230 pre-built role-based intelligence reports, dashboards, and alerts for HR managers, analysts, and business unit executives. At the foundation, Oracle HR Analytics is powered by Oracle BI Enterprise Edition that can be used to extend existing analytic solutions to meet any enterprise business intelligence need. Using this, organizations can embrace any corporate data source. 8

9 Oracle s OBIEE (Oracle Business Intelligence Enterprise Edition) is a foundational business intelligence product that orchestrates bringing data from multiple sources into forms of presentation, whether a report, a dashboard, or an alert. OBIEE provides a business model and data handling that maps between sources of data and the presentation layer used by executives, managers, specialists, and employees. The sources of data might be in an Oracle EBS or Enterprise HRMS, or in other applications such as talent management solutions, any data warehouse or data marts, or even every day tools such as Excel. The presentation layer may include reports, dashboards, and alerts. OBIEE also provides for ad-hoc analysis whereby a manager can drill down into data on a dashboard and see the underlying detail. OBIEE, the middleware, is critical in that it provides a simplified business model that contains the complex data dimensions and metric calculations needed for any presentation approach and hides the complexity from the business users. Its value is that it is one tool, one user interface, and one metadata source. HR Analytics subject areas include: The Workforce Profile provides a starting place for analysis on headcount and headcount movement trends, turnover, and span of control, providing a consistent view of the workforce to line managers and HR. Drilling down from this level, one can analyze staffing (i.e. contingent workforce as percent of total workforce), retention (i.e. retention hotspots or retention by top performers), and other demographic trends. By various time periods, users can view the entire organization and can select within the organizational hierarchy for a divisional, departmental, or workgroup view. With the tight integration between the Workforce Profile subject area and its dashboards and metrics to the underlying HR system of record, managers can finally view up-to-date workforce counts, something that has eluded most organizations to date and helps HR build credibility with Finance. 9

10 From the prebuilt dashboard for this subject area, users can correlate financial measures with key workforce metrics to demonstrate HR s strategic value in the workforce. For example, in the top two graphics in Figure 4, we see rising revenue per employee in the Employee Productivity graphic and rising contribution per employee in the Return on Human Capital graphic. These trends can be indicative of a potential problem with turnover. But, in fact, looking further, we see in the Employee Expense Trend chart that overtime is trending sharply up as are contracting expenses shown in the Key Variable Cost Drivers. With this information, managers can move to reduce overtime costs or contractor costs, such as hiring full time staff at lower and stable salary costs. 10

11 Using the Compensation subject area metrics and dashboards, financial officers can monitor payroll costs and spend on overtime and variable compensation. Managers can view performance by company pay levels, comparing these either within the company s own structure or to competitive levels (compa-ratios). HR specialists and managers can link compensation with performance as shown in the Figure 5. With this view, managers can analyze high performers with potential to fine tune their rewards to ensure their retention, thereby optimizing compensation plans while managing costs. This comprehensive set of dashboards and pre-configured analytical workflows provides a complete set of recruiting metrics that measure the efficiency and effectiveness of the entire recruitment life cycle, from pre-hire to post-hire employment. It enables optimization of candidate sourcing; analysis of the recruitment pipeline and hire-to-retire process efficiency; analysis of time to fill to support optimization; monitoring of vacancies; and measurement of quality of hires and their retention by source. Providing this ability to monitor quality of hire differentiates Oracle s HR Analytics for the recruiting process in that it does not stop at hire, but continues through employment to provide an ongoing quality of hire analysis. With the Recruitment subject, recruiting specialists can see job applicants, hire ratios, and retention rates by recruiting source. They can also drill into performance of new hires to assess the quality of these hires. By viewing these effectiveness metrics, an organization can fine tune its recruiting strategy, balancing costs, retention, and performance. They can thus lower costs through targeted recruiting. Through the Retention subject area and its dashboards, managers can view the voluntary turnover for top performers and can drill down to see the reasons they are leaving and then, guided through a set of workflow analyses, can determine the corrective actions to address any retention issue. Figure 6 shows new hire retention by source type. Users can monitor performance at first service milestone of new hires, along with separations and separation rate assisting them to gain a total picture of new hire quality. 11

12 From the learning management metrics and dashboards, users can assess learning offerings and how those programs affect employee performance and tenure. They can also monitor learning offering effectiveness and the costs to deliver by delivery option. For example, users gain insight into learning demand through top enrollments by job (see Top 10 Enrollments in Figure 7), delivery methods, or organizational units and can identify the courses with the longest wait time (see Longest Average Enrollment Wait Time in Figure 7). With this information, they can fine tune the overall learning program, perhaps adding more courses or eliminating ones not well attended. 12

13 From the Absence subject area metrics and dashboards, specialists and managers can monitor planned and unexpected absence events to gain greater insight into lost productivity, as well as staffing and scheduling needs. It is possible to measure absence events over time to highlight trends and exceptions such as that highlighted in Figure 8. HR no longer needs to run individual reports, but now from a single dashboard launch pad, can monitor US EEO, AAP, Vets100, and other compliance reporting to view the state of compliance to determine if action is necessary. Users can decide on next actions by navigating to other dashboards to further analyze issue areas such as workforce diversity. 13

14 This firm (MajorFS) has over 50,000 employees worldwide. It operates in over 100 countries. Twenty percent are people leaders and HR professionals distributed across its broad reach. MajorFS began a multi-year path in 2008 towards developing and implementing an HR servicing and information technology roadmap, including deploying a workforcerelated business intelligence capability to reach all these leaders and HR professionals. Before the HR Analytics project, there were multiple data sources including the PeopleSoft HRMS, various talent management solutions, and additional data sources, along with multiple reporting tools which resulted in too many reports, erroneous data, and multiple interpretations of HR data. Too many reports led to higher storage costs as well as data discrepancy issues depending on the source. Contradictory reports led to questions on data integrity. The inability to link multiple data sources caused redundant report and increased operational costs and maintenance. Beginning in 2008, MajorFS began to deploy a business intelligence infrastructure based on Oracle s Business Intelligence Enterprise Edition and the HR Analytics application to support its envisioned business intelligence capability. It leveraged the out-of-the-box data model, reporting, analytics/metrics, and dashboards. MajorFS is currently engaged in expanding the data sources integrated through its BI infrastructure (finance), integrating additional talent management applications (recruiting and learning), establishing resident experts on business intelligence, and driving usage across 100% of its HR business units. MajorFS as a leading-edge early adopter is exemplary in its team scope. Understanding that usage comes from broad representation of those to be impacted by new technologies and the changes they bring, its team is comprised of representatives from across the organization including an worldwide IT group, Global HR Technologies, MajorFS Technologies Infrastructure, MajorFS Workplace Technologies, MajorFS Chief Information Security Office, HR Compliance, various business owners from the core HCM and talent management, its outsourcing partner, and Oracle. MajorFS has implemented the following dashboards: Pay for Performance, Headcount Analysis including terminations, and Recruitment Performance. Some of the dashboards have been deployed as quickly as one to two months, including Expense Trends and Cost Drivers, within the HR Performance dashboard. This required loading currency exchange rates into the data warehouse and implementation of the profit and loss security model. In progress in late 2009 and into 2010, are the deployment of HR Performance, Workforce Profile, and additional Recruitment dashboards. As it continues to build on its BI capability, MajorFS is achieving benefits of: Enterprise-wide HR reporting that it views as best in class, covering employees and contractors Standardization of HR reports globally, with multiple organization views of employee data that include non-hr data sources Increased control and auditing capabilities HR information delivered timely, accurately, and cost effectively Manual work by end users in developing reports has been reduced substantially leading to labor cost savings Reporting tools required to support HR have been reduced substantially as well, leading to cost savings Users have confidence in the accuracy of HR data Users express increased user satisfaction. Next steps include continued socialization of business intelligence, education and training on key deployed reports and dashboards, establishment of resident experts on business intelligence to further expand usage, and ongoing efforts to improve data integrity. All these activities will happen within the context of obtaining continued input, alignment, and funding for additional deployment of the strategic BI roadmap. 14

15 Pernod Ricard is a leader in spirits and wines that has almost quadrupled in size through acquisitions in the past eight years. Since 2000, it has acquired Seagram, Allied Domecq, and Vin & Spirit (the state-controlled Swedish organization behind Absolut vodka). From selling almost exclusively in France, it is now a leader in the rest of Europe, the Americas, and Asia Pacific. Today it distributes products into more than seventy countries. It has rebranded itself as a luxury group. The way of working, decentralization (avoiding too many decisions made solely in Paris where it is headquartered), the values, entrepreneurial spirit, mutual loyalty and strong sense of ethics, and the style, conviviality, make it an employer of choice to its 19,000 employees. It s HR management objectives were set in 2005 after its Allied Domecq acquisition. They were fourfold: Attract and integrate an international pool of talented graduates with experience, recruited from the best universities around the world Manage and monitor the career development of these recruits in an international environment, ensuring that career opportunities are anticipated and implemented. Encourage cross-cultural, as well as cross-business experiences by implementing an international mobility plan at the time of hiring. Develop a recruitment strategy that detects Talent at the hiring stage by strengthening the talent pipeline within the regional organizations The IT strategic priorities are twofold: 1. Adopt a regional IT cluster approach with a back-office core model being designed and built at the regional level, with regional data centers and infrastructure clusters. 2. Use common IT tools with J. D. Edwards as the ERP choice for the new Pernod Ricard Group being deployed globally, replacing SAP, Movex, and legacy systems; PeopleSoft HR managing the Group Managers and Executives; and Oracle as the recommended database, OBIEE as the standard for BI replacing Business Objects and Cognos, and HR Analytics as a packaged BI solution. PeopleSoft HCM was implemented in to get all HR Group Processes in a single system, including workforce administration, talent management and career development, the yearly salary review, and bonus calculations and appraisals. Following the Peoplesoft implementation, strong business requirements for a BI solution arose to: Better exploit data within the system to improve talent and career management Ensure smoother processes Improve data quality Add some new reporting and analysis capabilities to that provided by Peoplesoft Enable users to create their own reports and dashboards Increase user adoption. 15

16 The project is the answer to monitor and report on workforce administration, development review (appraisal, career planning, and succession planning), the annual salary review, and bonus review processes at the Group Level. As key users were not initially able to articulate the business requirements for analytics, the packaged metric, report, and dashboard examples from HR Analytics were a great place to start. The team expanded upon business requirements elicited from the VPs of HR and a core team and began an iterative approach, relying on the pre-built templates. They started small, taking into account the learning curve of new users, giving them access to more sophisticated features as they mastered the initial reports and dashboards. Actual development was just seven months, with 1.5 FTE at Pernod Ricard Holding, a core team of affiliates as reviewers, and 4 FTEs their system integrator, CSC. The technology components included Oracle BI Applications for HR with the underlying OBIEE functionality, the Data warehouse Administration Console (DAC for data flows), and the Informatica PowerCenter. The standard HR Analytics application model was tailored to the highly customized Pernod Ricard PeopleSoft 8.9 system. In all, 4 star schemas were adapted, 50 Informatica data flows have been developed (some being copy/paste with minor amendments), 9 facts and 30 dimension tables used. The solution takes into account the security model of PeopleSoft to control user access, reports in English and local languages, and reports salary in Euros and local currencies. LDAP integration is now to come. The value of the BI applications focused on HR came from re-using and implementing best practices and guidelines provided by the BI Apps to ensure efficient maintenance and easier enhancements. The team specifically benefited from the pre-built data loads, the data model, all the behind the scene ETL functionality, the scheduling of data flows, and the built-in error management. They have been able to identify data inconsistencies. With the pre-built functionality, there is more detailed, and near real time analysis of HR data stored in PeopleSoft. Further, the adoption of a package approach will have the benefit from ongoing enhancements by Oracle. Today, the reports and dashboards are accessed by more than 200 users worldwide including the VP of HR and HR managers within each region and clusters, as well as at the Corporate-level by the Group HR VP, HR Talent Management and Best Practices Development VP, International Mobility VP, and the Group Compensations and Benefits VP. Analytics now makes hidden HR data easily accessible to executives and managers, and as such, became a key driver for user adoption of the HRIS system as well! Pernod Ricard achieved a reduction of time and effort required to produce reports and analytics with an estimated savings of 20% over building home-made. The implementation was done in less than seven months and the first reports were produced in weeks, not months. There was time, cost and workload savings from design to implementation and testing. They have improved talent management processes through the insight brought in by analytics with help for decision making on career management, talent development, compensation and benefits. Users are now able to produce their analyses on their own to better identify high potential and the best talent. There are two key benefit areas for Oracle HR Analytics that will appeal to your C-level executives. The first benefit area is the value of a pre-built solution versus a customized, in-house solution. The second, more valuable benefit area is the business value from being able to address workforce issues with the insight to action analytical workflows. First, a pre-built data warehouse, embedded analytics in key business processes, pre-built metrics with standard definitions, and role-based dashboards, are cheaper to implement in terms of total cost of ownership and faster time to value than building such a solution from components. Your CIO should be ecstatic. After all, he or she is keenly interested in tight integration among systems and minimizing costs to deliver information. The delivered detailed integrations and data models to support the analytical workflows contribute tremendously to a reduction in associated costs. In the Pernod Ricard example above, we saw the organization achieved an estimated savings of 20% over building its own solution. 16

17 Figure 10 summarizes this value proposition by comparing the relative time to build from scratch using component BI tools versus deploying with the Oracle BI applications. The bottom line is a lower cost of ownership. The pre-built solution lowers the need for IT labor costs, eliminates customizations, and eliminates the need for other 3 rd party licenses and maintenance agreements, by giving organizations a single solution that enables integrations with any data source and system. In addition to a lower total cost of ownership, more importantly, Oracle s HR Analytics provides the following business value, all of which will resonate well with your CEO, CFO, and CHRO. The CEO is most interested in knowing the impact of employee performance at a high level delivering simple metrics such as revenue per employee trends will be sure to please. The CHRO, knowing that costs are carefully scrutinized wants to be able to show the CFO that HR delivers services cost effectively. The CHRO also knows the importance of minimizing top performer turnover, managing internal versus external hiring costs, and over-paying salaries and benefits. It begins with the fact that you can use OBIA to bring together multiple content areas, merging finance and HR cost data, to provide workforce costs, or merging project and HR data, to provide workforce productivity: Minimized risk of key talent leaving: By being able to see the revenue generated by high performers and the competencies they hold, and further being able to determine if any are at risk of leaving, both the revenue stream they generate can be protected, and the cost of replacing them can be avoided. Managing internal versus external hiring costs: By being able to see the cost tradeoffs of hiring external versus internal talent and the interplay of the costs of development for either group, organizations can achieve lower costs of hiring and development. Organizations may also achieve increased revenue with the best mix of internal and external hires. Avoiding over-or underpaying salaries and benefits: By comparing your salaries and benefits to benchmark sources of market salaries and benefits, organizations can avoid overpaying, thereby eliminating unnecessary salary costs. They can also avoid underpaying employees. Underpaying may result in increased turnover as employees leave due to dissatisfaction with their salaries and benefits. With increased turnover, there are also increased new employee acquisition costs. These can be avoided. 17

18 Avoid costly exodus of baby boomers: Understanding the upcoming retirement plans of your older workforce that have key skills, contacts, and knowledge of your business strategies, will enable you to plan for alternatives to retirement such as promotions or alternative compensation packages. You avoid loss of loyal customers and minimize development of knowledge sources. Oracle provides a Value Analysis service to selected prospects in which their specialists deeply analyze current processes and costs and compare these to future processes and costs with the addition of new technologies. From a recent analysis of a $1 billion-sized company exploring OBIA, the assessment estimated 5-year savings ranging from $1.75 million to $2.5 million, with benefit impacts stemming from improved visibility in all talent management areas, as well as absence and US Statutory Compliance. Specific areas of key value for this organization include: Retention of key performers and their associated customers and revenue Better management of hiring costs by being able to identify the best hiring source delivering improved quality of hires Reduced compensation overpayments Improved HR staff productivity resulting in the need for fewer HR staff Reduced risk of litigation due to non-compliance Lower costs of business intelligence development with pre-built solution. Five year investment costs ranged from $0.9 million to $1.25 million to cover software, implementation, and change management. Five year pretax ROI, pretax internal rate of return (IRR), and investment payback period expectations ranged as follows: It is easy to make the case for Oracle HR Analytics. Technical and analytical staff time is minimized and replaced with the automatic generation of reports and dashboards delivering significant cost savings. But the strategic value that early adopters are achieving with workforce analytics is where the real value lies. While benefits are compelling, organizations will not achieve them unless they have a successful deployment. Best practices we at CedarCrestone see in our implementation work include: 1. Invest in data cleansing. The volume of data used in reporting and analytics can be quite large. Further, organizations often have multiple sources of data. We encourage a realistic evaluation of data available and allocate time to clean and align data sets. As an Oracle customer, you likely already have a single system of record, but if not move to a single system of record and standardize your processes as a way to support data cleansing and thereby gain data credibility. 2. Focus data and analytics on business results. Look for key pains of your organization to address with your initial efforts. Start with a limited number of key metrics and dashboards that contribute to your organization s business issues, but be prepared to expand. Help your end users understand how to use the dashboards and the metrics so that they can be effective in solving their own business problems as the Pernod Ricard example shows. 18

19 3. Start with the end in mind. While an organization may use simple metrics reports or do analysis in Excel, to institutionalize metrics-based management, a more complete technology environment is needed. Develop a technology blueprint that includes everything you will need reporting, warehouse, analytics, presentation through dashboards or other visualization approaches, and notification and distribution. The Oracle products provide this complete technology infrastructure. 4. Plan for incremental deployment. The taste of an organization for data and analytics will evolve. Start small with your metrics but be prepared to deploy more. Again, the Oracle HR Analytics pre-built solutions can support your deployment needs and will evolve as your needs evolve. 5. Use a data-driven business case. We develop an analytical framework for the business case that can serve as a baseline for the organization to track the performance of its workforce management processes and support further needed investments. Use the HR Analytics to provide ongoing business impact results. 6. Manage change. If you are not already an organization that is driven by numbers, metrics and analytics is a shift, not only for your technical and functional experts, but for operational managers. Do not underestimate the cost of change management to ensure a successful deployment. To put Oracle HR Analytics in its context, see the following: 1. Oracle Enterprise Performance and Business Intelligence 2. Oracle Business Intelligence Foundation 3. Oracle Business Intelligence Applications, including Oracle HR Analytics: 4. Contact your Oracle Sales Representative to discover what Oracle HR Analytics can do for your organization. 19

20 As director, research and analytics at CedarCrestone, Lexy Martin is responsible for its annual HR Systems Survey, now in its 13 th year. When not working on the survey, she provides strategy, business case, and metrics and analytics strategy services, along with deep dive benchmarking in all industries. Working with many of the leading HCM vendors, she has developed their value propositions and conducted numerous surveys of their customer bases. A sought-after thought-leader and speaker, few researchers in the field of HR technology can match the experience that Lexy has accumulated during her career in introducing emerging technologies. From the pioneering days of introducing office automation and PCs in the early 80s, to groupware in the late 80s, self service in the early 90s, and to continuing technology introductions this decade, Martin is a consistent contributor to the industry's evolution. 20