Workforce Analytics Business Intelligence Meets Human Capital Management October 2007
Page 2 Executive Summary Workforce analytics is not a new concept. The ability to measure human capital metrics to obtain greater insight into workforce-related issues has been possible for well over a decade, however few organizations have adopted the practice in a meaningful way. While companies continue to struggle with the concept of workforce analytics, there is no doubt that adopting a more sophisticated workforce performance measure allows human capital practitioners to more accurately target needed solutions and play a more strategic role in overall business development. This report is a roadmap for the rest of the Human Capital Management (HCM) community that desires to achieve those goals through the Best-in-Class use of workforce analytics. Research Benchmark Aberdeen s Research Benchmarks provide an indepth and comprehensive look into process, procedure, methodologies, and technologies with best practice identification and actionable recommendations Best-in-Class Performance Aberdeen used four key performance criteria to distinguish Best-in-Class companies: The ability to collect, compute, and report on a robust set of HCM data metrics HCM data is delivered in a manner consistent with strategic priorities The integration of HCM data with other relevant business-related data The ability to model HCM scenarios Competitive Maturity Assessment Survey results show that the firms enjoying Best-in-Class performance shared several common characteristics. Identify key HCM metrics (93%) The ability to search or query HCM data (93%) The ability to verify accuracy of HCM data points and metrics (80%) The ability to make strategic decisions based on HCM data (71%) Required Actions In addition to the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, companies must: Measure the impact of the system within the organization Ensure the accuracy of the data utilized by the system Use workforce analytics data both tactically and strategically "Analyzing our workforce relative to employer needs, now and five years out, and identifying trends nationally and locally in order to benchmark ourselves, are probably the most important things we measure. We use the information to brainstorm and problem solve in problem areas." ~ Chief HR Officer, mid-sized healthcare facility, using an ERP software solution
Page 3 Table of Contents Executive Summary... 2 Best-in-Class Performance... 2 Competitive Maturity Assessment... 2 Required Actions... 2 Chapter One: Benchmarking the Best-in-Class...4 Business Context... 4 The Maturity Class Framework... 6 The Best-in-Class PACE Model... 6 Best-in-Class Strategic Actions... 7 Chapter Two: Benchmarking Requirements for Success...9 Competitive Assessment... 9 Capabilities and Enablers...10 Looking Ahead...12 Chapter Three: Required Actions...15 Laggard Steps to Success...15 Industry Average Steps to Success...15 Best-in-Class Steps to Success...16 Appendix A: Research Methodology...17 Appendix B: Related Aberdeen Research...19 Figures Figure 1: Top Coverage Areas of Measurement Initiatives...5 Figure 2: Top Pressures... 5 Figure 3: Best-in-Class Strategic Actions... 7 Figure 4: Satisfaction with Current Workforce Analytics Solution...8 Figure 5: Best-in-Class Capabilities...11 Figure 6: Top Technology Enablers of Best-in-Class...13 Figure 7: Return-on-Investment...13 Tables Table 1: Top Performance Earns Best-in-Class Status...6 Table 2: The Best-in-Class PACE Framework... 7 Table 3: The Competitive Framework...10 Table 4: The PACE Framework Key...18 Table 5: The Competitive Framework Key...18 Table 6: The Relationship Between PACE and the Competitive Framework...18
Page 4 Chapter One: Benchmarking the Best-in-Class Business Context Workforce analytics can be an intimidating topic. It often evokes a sense of rigidity and dehumanization that is contrary to the mission of most human capital practitioners. It also seems, at first glance, to be a terribly complex process, due to its close relationship with Business Intelligence (BI). Additionally, human capital metrics are usually considered a secondary consideration in regards to other corporate data sources, and continue to be (in many cases) an untapped mine of strategic and operational data. However, workforce related expenditures are one of the single largest corporate expense lines, and employee performance is one of the most important success factors for any organization. Better visibility into the dynamics that impact these two critical areas allows companies to make better, faster decisions that positively impact the bottom line. Confusion Abounds The practice of applying quantifiable and objective measures to better understand and develop these resources remains under-utilized in the HR departments. Part of this can be attributed to an overall lack of understanding of just what workforce analytics is and does. When asked to define workforce analytics, Aberdeen survey respondents provided explanations that ranged from the very simple to the quite complex, illustrating the confusion surrounding the topic, and the wide range of possible deployments. At its core, Aberdeen defines workforce analytics as, ultimately, any systemic way in which a company measures and analyzes information around a topic pertaining to human capital management. Most companies are already doing this, to some extent. Eighty-four percent (84%) of respondents that claimed their organization did not have a workforce analytics solution also indicated that they do measure and analyze performance across at least one of 14 HCM coverage areas identified in the survey. This disconnect perfectly exemplifies the hypothesis that while companies may be measuring their HCM performance in a variety of ways, they often don't consider it to be part of a workforce analytics initiative. Workforce analytics need not be an arduous large scale technology implementation - it can be as simple as comparing a few key metrics and monitoring them over time. However, a truly effective workforce analytics solution needs to include a wide enough variety of data points to effectively measure the critical factors that impact the overall health of an organization. Fast Facts 89% of respondents measure workforce performance in regards to employee performance management 81% of Best-in-Class organizations report on HCM data in a manner consistent with their strategic priorities 80% of Best-in-Class companies are satisfied with their workforce analytics solution Our current system is manually intensive, time consuming, and prone to errors." ~ Senior Operations Manager, mid-sized professional services firm, currently using spreadsheets from various applications to compile workforce data Areas of Focus Respondents have implemented measurement initiatives around a variety of areas, spanning the spectrum of HCM. Five areas are being measured by
Page 5 more than 80% of all survey respondents: employee performance, compensation, staffing, benefits, and payroll. Figure 1: Top Coverage Areas of Measurement Initiatives Employee Performance 89% Compensation 88% Staffing 85% Benefits 84% Payroll 84% General personnel statistics 64% Retention 62% All respondents Rew ards 62% 0% 20% 40% 60% 80% 100% "Anything that measures what our workforce is doing is part of our solution. Demographics, turnover, expected retirements, employment equity, breakdowns by job function/title, etc. It is all important to measure." ~ HR Specialist, large education institution, using ERP HCM analytics solution % of Respondents Measuring Area Pressures Faced Companies are facing a variety of pressures which are driving their adoption of workforce analytics solutions. The leading pressure, reported by 56% of all respondents, is the need to improve overall company performance. Figure 2: Top Pressures Improve overall company performance 56% Increase quality of HR-related decisions 38% Maximize productivity 36% Business process management initiative Reduce costs 16% 14% All respondents 0% 20% 40% 60% 80% % of Respondents Identifying Pressure
Page 6 The Maturity Class Framework Aberdeen used four key performance criteria to distinguish the Best-in- Class companies from Industry Average and Laggard organizations. A robust set of HCM data points measured, alignment of HCM reporting in accordance with strategic priorities, the ability to successfully integrate HCM data with other appropriate corporate data (financial, sales, CRM, etc.), and the ability to successfully model HCM scenarios for forecasting or predictive insight were all used to determine the Best-in-Class organizations. Table 1: Top Performance Earns Best-in-Class Status Definition of Maturity Class Best-in-Class: Top 20% of aggregate performance scorers Industry Average: Middle 50% of aggregate performance scorers Laggard: Bottom 30% of aggregate performance scorers Mean Class Performance Collect, compute, and report on an average of 98 data points 81% report on HCM data in a manner consistent with their strategic priorities 78% successfully integrate HCM data with other corporate data 67% successfully model HCM scenarios Collect, compute, and report on an average of 27 data points 58% report on HCM data in a manner consistent with their strategic priorities 7% successfully integrate HCM data with other corporate data 12% successfully model HCM scenarios Collect, compute, and report on an average of 6 data points 30% report on HCM data in a manner consistent with their strategic priorities 0% successfully integrate HCM data with other corporate data 0% successfully model HCM scenarios "We currently report quarterly, but doing it monthly would allow for an even quicker response to situations in need of being addressed." ~ Senior Manager, Business Intelligence, mid-size consulting firm, using BI software The Best-in-Class PACE Model To achieve Best-in-Class performance, as outlined in Table 1, requires a combination of strategic actions, organizational capabilities, and enabling technologies, as illustrated in Table 2. Best-in-Class organizations are responding to the pressure to improve the quality of their HR-related decisions, a slightly more strategic goal than the tactical need to improve bottom-line performance reported by the majority of survey respondents. This narrower approach (measure HR better versus fix the whole company) allows Best-in-Class companies a more targeted focus in regards to a workforce analytics solution.
Page 7 Table 2: The Best-in-Class PACE Framework Pressures Actions Capabilities Enablers Improve quality of HR-related decisions Provide on-demand access to key HCM metrics for stakeholders Quantify the impact of HCM data on the organization Identified key HCM metrics Calculate key HCM metrics Leverage HCM data in tandem with other corporate data Verify the accuracy of HCM data points Measure impact of HCM decisions on the organization Software with HCM analytics capability Data warehouse of HCM data Interactive analytics dashboard or scorecard Searchable access to key HCM Security tools Drill down data capability Data modeling and forecasting tools Standardized set of preconfigured reports Custom report building tools Graphical data display tools Data integrity and cleansing tools Historical trending tools Advanced statistical analysis tools Best-in-Class Strategic Actions Best-in-Class organizations are utilizing both standardized and customized approaches when implementing workforce analytics solutions. Forty percent (40%) of Best-in-Class companies are regularly reporting on key HCM metrics while also providing on demand access to key HCM metrics for stakeholders. This two-tiered approach provides both a framework for success and a level of flexibility necessary in real-world situations. Figure 3: Best-in-Class Strategic Actions Provide on demand access to key HCM metrics for stakeholders 40% Quantify impact of HCM data reporting on the organization 33% Accelerate delivery time of human capital-related data 33% Document Workforce Analytics processes and procedures 20% Best-in-Class 0% 10% 20% 30% 40% 50% % of Respondents Identifying Action Industry Average companies identify regularly reporting on key HCM metrics, but are less likely to provide on demand access to the data when
Page 8 necessary. Laggard companies remain challenged by process - the most prevalent strategy identified is documenting workforce analytic procedures, an action that implies an entry-level approach to a solution. Satisfaction Follows Successful Implementation Doing it right also has its benefits: Best-in-Class companies are more likely to report being satisfied with their workforce analytics solution than either Industry Average or Laggard companies. While no Best-in-Class companies reported being unhappy with their current workforce analytics solution, 31% of Industry Average companies reported being dissatisfied with their workforce analytics solution, as did nearly half (45%) of all Laggard organizations. Figure 4: Satisfaction with Current Workforce Analytics Solution 100% 80% 60% 40% 20% 0% 80% 50% 45% 31% 30% 0% Best-in-Class Average Laggard % of Respondents indicating satisfaction Very or somew hat satisfied Very or somew hat dissatisfied Aberdeen Insights - Strategy A workforce analytics solution does not need to be all encompassing in order to be considered successful. Instead, organizations need to identify the areas that would most benefit from increased visibility, and then work to create a solution for that specific issue. Attempting to measure everything possible all at once is a recipe for disaster, unless an organization has considerable resources and a high level of commitment to the success of the project. While there are certainly technology solutions to assist in this process, they are not critical to begin a small scale initiative. Most companies find that implementing a simple, yet insightful analytics solution can pave the way for more comprehensive analysis in the future. The lessons learned, and experience garnered during a smaller scale deployment can be applied to more ambitious projects moving forward. "We use a workforce analytics solution, but we need to take a more systemic approach to data collection and usage in order to really use it to its full advantage." ~ Senior HR Manager, US municipality, using specialized workforce analytics software In the next chapter, we will see what the top performers are doing to achieve these gains.
Page 9 Chapter Two: Benchmarking Requirements for Success The implementation of a workforce analytics system plays a crucial role in the ability of HCM practitioners to effectively convert their strategic actions into actual performance capabilities. Case Study - Training Initiative Lacks Robust Functionality A leading financial services firm implemented a workforce analytics solution to better monitor its in-house learning and development efforts in July 2006. This system replaced an existing solution that had been primarily managed and operated by the supplying vendor. The installation went smoothly, and was completed on schedule. Fast Facts 80% of Best-in-Class companies verify the accuracy of HCM metrics 50% of Best-in-Class companies plan to implement data simulation technology in the next 24 months The program manager responsible for training solutions is the primary user of the system. While she finds it helpful in general, she has discovered several system limitations that she finds frustrating. First, the system does not incorporate other data sets that would provide valuable insight for strategic use. For instance, website metrics showing data about total site visits to her enrollment site, and page navigation information that is captured by other web analytics software is not examined in tandem with enrollment information in either system. Comparing the two data sets would allow the company to identify those courses that are considered, but not registered for, as well as ones that may not be getting any attention from visitors to the site. Secondly, the system can provide basic information, but not in an easy to use or analyze format. For example, reports include information on the number of courses offered during a particular time period, and the total enrollment during a particular time period, but does not provide percentage of enrollment versus total courses delivered. Those figures must be computed manually. This limited visibility (and additional work) takes away from the overall satisfaction with the solution. The program manager was quick to state that it may be her lack of knowledge about system capabilities: "It can do so much, sometimes I don't know what is and isn't possible. But I don't have the time to find out." While not unhappy with the system, she does often wish it was easier to utilize and navigate. "I don't have time to become an analytics expert. I just want the system to work, and provide the reports I need to do my job." ~ Program Manager, leading financial services firm using a specialized workforce analytics solution Competitive Assessment The aggregated performance of surveyed companies determined whether they ranked as Best-in-Class, Industry Average, or Laggard. In addition to having common performance levels, each class also shared characteristics in five key categories: (1) process (the ability to detect and respond to changing conditions without placing additional burdens on the organization); (2) organization (corporate focus and collaboration among stakeholders); (3) knowledge management (contextualizing data and exposing it to key
Page 10 stakeholders); (4) technology (the selection of appropriate tools and intelligent deployment of those tools); and (5) performance management (the ability of the organization to measure the benefits of technology deployment and use the results to improve key processes further). These characteristics (identified in Table 3) serve as a guideline for best practices, and correlate directly with Best-in-Class performance across the key metrics. Table 3: The Competitive Framework Best-in-Class Average Laggards Process Organization Knowledge Technology Performance Identified key HCM metrics 93% 61% 38% Verify the accuracy of HCM data points and metrics 80% 46% 6% Regularly produce HCM reports for internal use 93% 50% 25% Workforce analytics technology currently in use 93% search or query technology 87% graphical data display 87% drill down data capability 87% custom reports 85% standard report set 79% interactive analytics dashboard 60% data integrity tools 57% data modeling and forecasting 42% search or query technology 56% graphical data display 38% drill down data capability 58% custom reports 72% standard report set 32% interactive analytics dashboard 23% data integrity tools 19% data modeling and forecasting 17% search or query technology 31% graphical data display 21% drill down data capability 33% custom reports 44% standard report set 31% interactive analytics dashboard 20% data integrity tools 15% data modeling and forecasting Impact of HCM decisions on the organization is measured 40% 24% 13% "The system is helpful, but not utilized to its fullest extent. It helps in basic stuff, like reviewing turnover, monitoring recruiting, and identifying high potential employees, but we could do so much more." ~ HR Director, large industrial manufacturing firm, using BI HCM solution and specialized HCM analytics software Capabilities and Enablers Based on the findings of the Competitive Framework and interviews with end users, Aberdeen s analysis of the Best-in-Class demonstrates that
Page 11 implementing the appropriate building blocks for success is critical to any workforce analytics system. Best-in-Class organizations demonstrate significant facility in accomplishing the fundamental functionality of a workforce analytics implementation: they have identified the key HCM metrics, report the results, calculate performance metrics, and verify the accuracy of HCM data. They are also sharing the information, making decisions based on the data, and using it in conjunction with other company information. Figure 5: Best-in-Class Capabilities Internally report on HCM metrics regularly Identified key HCM metrics Calculated HCM performance metrics Verify the accuracy of HCM data HCM metrics shared throughout the organization Make strategic decisions based on HCM metrics 93% 93% 87% 80% 73% Best-in-Class 71% "Data integrity is a huge issue. Maintaining a consistency of measurement and analysis across national and divisional boundaries, using the right measures, and getting beyond simple historical data analysis is really critical to our efforts moving forward." ~ VP HR Manager, large banking institution, using ERP software and a specialized workforce analytics solution 0% 25% 50% 75% 100% % of Respondents Identifying Capability Process Ninety-three percent (93%) of Best-in-Class companies reported having identified key HCM metrics for their organization, compared with 61% of Industry Average companies, and just 38% of Laggard companies. Without have a firm grasp on the key metrics to measure and compile, a workforce analytics implementation is doomed to fail. Best-in-Class organizations have clearly mapped out the key data points needed to compile the information most useful to their efforts. Organization Verifying the accuracy of data is a critical component of any data analysis effort: a report that cites inaccurate information is worse than useless - it can be dangerous. Best-in-Class organizations recognize this, and 80% have implemented processes to verify the accuracy of HCM data points and metrics. Forty-six percent (46%) of Industry Average companies report the
Page 12 ability to verify data accuracy, while just 6% of Laggard companies claim the ability to do so. Knowledge Management Simply collecting and computing data is not enough; the information must be utilized and reported to key stakeholders. Ninety-three percent (93%) of Best-in-Class companies regularly report on HCM metrics within the organization, compared with 50% of Industry Average companies, and just 25% of Laggard organizations. Twenty-nine percent (29%) of Best-in-Class companies regularly report on HCM metrics outside the organization (SEC, investor reports, etc.) Technology Best-in-Class companies are far and away outpacing Industry Average and Laggard organizations in the adoption of technology solutions for workforce analytics. Currently, the majority of Best-in-Class companies are outperforming Industry Average and Laggard companies across every technology enabling solution monitored in the Aberdeen survey. Best-in- Class companies have implemented tools to allow the basics of workforce analytics functionality (standard and custom reporting, searching / querying, displaying data, drilling into data) and are beginning to adopt technology solutions to better manage and maintain the data (data integrity, data cleansing, security, data warehousing, etc.) and to allow more strategic use of the information (dashboard, trending, modeling, forecasting, simulations, etc.). "I would really like to implement better data quality checks, and the use of a business rules engine to allow for accommodating complex changes in the data." ~ Senior Manager, Business Intelligence, mid-size consulting firm using BI software Performance Management Forty percent (40%) of Best-in-Class companies measure the impact of HCM decisions within the organization. Twenty-four percent (24%) of Industry Average companies do, and 13% of Laggard companies do. Not understanding or quantifying how well (or how poorly) HCM initiatives fare creates an information vacuum, and does not allow for fine-tuning or corrections in future endeavors. Looking Ahead Best-in-Class companies are not content to rest on their laurels - they are planning for future functionality. While approximately 90% of Best-in-Class companies currently possess searchable access, drill-down data capabilities, graphical data display tools, custom reporting and preconfigured reports, nearly all the remaining Best-in-Class companies report plans to implement this functionality in the near-term future. And though approximately 80% of Best-in-Class companies already use an interactive reporting dashboard and historical trending tools, the remaining 20% of Best-in-Class companies report plans to adopt these technologies in the next six to 24 months. The tools that have been least adopted by Best-in-Class organizations are those that provide a greater degree of insight and strategic functionality,
Page 13 including modeling / forecasting tools and data simulation tools. Both of those tools have high planned adoption rates by Best-in-Class companies over the next six to 24 months. Figure 6: Top Technology Enablers of Best-in-Class Searchable access 93% 7% Historical trending Interactive dashboard 80% 79% 20% 21% Data modeling & forecasting 57% 42% Drill-dow n data capability Graphical data display Custom reports 87% 87% 87% 7% 7% 7% HCM Data w arehouse Preconfigured reports Security tools Data simulation Data cleansing 73% 21% 85% 8% 73% 20% 43% 50% 60% 27% Current Planned 40% 60% 80% 100% % of Respondents Identifying Enablers Worth the Investment Fifty-three percent of Best-in-Class organizations report experiencing a positive ROI from their workforce analytics initiative, compared with just 19% of Industry Average companies and only 5% of Laggard firms. Figure 7: Return-on-Investment 80% 60% 40% 20% 0% 53% 58% 48% 37% 33% 33% 19% 13% 5% Yes No Don't Know % of Respondents Best-in-Class Average Laggard "By reducing overall employee turnover and increasing employee productivity, we have most definitely experienced a positive return on investment with our workforce analytics implementation." ~ HR Manager, mid-sized financial services firm, using specialized workforce analytics solution
Page 14 Aberdeen Insights - Technology Implementing a workforce analytics solution is not a magic fix - it requires consideration and careful planning in order to operate to its full potential. Without careful forethought, confusion abounds, and the initiative may not be as successful as anticipated. Data integrity, reporting guidelines, and identifying the proper measures to best impact the organization are critical factors to address before embarking on any workforce analytics initiative. The technology enablers are simply tools to assist and streamline processes - they do not take the place of careful planning. "We use a workforce analytics solution, but we need to take a more systemic approach to data collection and usage in order to really use it to its full advantage" ~ Senior HR Manager, US municipality, using specialized workforce analytics software
Page 15 Chapter Three: Required Actions Whether a company is trying to move its performance in workforce analytics from Laggard to Industry Average, or Average to Best-in-Class, the following actions will help spur the necessary performance improvements: Laggard Steps to Success A workforce analytics initiative need not be cumbersome. Often, using simple data points in a consistent and concise manner can elicit a great deal of insight into a particular function, and serve as a launching pad for future analysis. Starting on a small scale and expanding when appropriate is a perfectly sensible approach to adopting a workforce analytics solution. Stay focused. Identify a particular point of pain within the organization, and determine what information would assist in making more informed decisions in regards to that issue. Only 38% of Laggard companies have identified the key HCM metrics that need to be measured. Assure the quality of workforce data. Just 6% of Laggard companies report being able to verify the accuracy of their HCM data and metrics. Carefully monitoring the data that is used, and implementing tools to assist in maintaining data integrity, are critical technology enablers. Quantify the results, and measure the success of the program. Best-in-Class companies are three-times more likely to measure the impact of HCM metrics on the organization than Laggard companies. (Industry Average companies are almost twice as likely as Laggards to measure the impact to the organization.) Obtain input from stakeholders about ways to enhance performance, and proactively put a plan in place to implement the changes. Fast Facts Best-in-Class companies are six times as likely as Laggard firms to use advanced statistical analysis tools Best-in-Class companies are twice as likely to measure performance around learning and skill development than Laggard companies Best-in-Class companies are almost 11 times more likely to report a positive ROI on their workforce analytics initiative than Laggard companies. Industry Average Steps to Success Industry Average companies have demonstrated a reasonable facility in certain areas of workforce analytics, but lack many of building blocks necessary for long-term success. These companies appear content with simply implementing a system and then letting it alone. A successful system needs continued nurturing and care. Tighten controls around the collection and manipulation of workforce data. Verify the accuracy of all data sets, document the procedures necessary to fuel the system, and dogmatically report on the results in a regular fashion. Best-in-Class companies are twice as likely as Industry Average companies to report being able to verify the accuracy of HCM data and to regularly report on HCM metrics within their organization.
Page 16 Integrate other company data with HCM information to provide a more in-depth view of the organization. Only 7% of Industry Average companies rate their ability to use and compare HCM data and / or metrics with other corporate data as good or excellent, compared with 78% of Best-in-Class companies. Financial data, sales performance, customer service records, operations metrics, etc. all can enhance workforce analytics efforts. Use the information collected and compiled in both a tactical and strategic fashion. Best-in-Class companies are three times more likely to make strategic decisions based on HCM metrics than Industry Average companies. Applying workforce analytics data to strategic planning initiatives increases the visibility of the project and the quality of the decision-making. Best-in-Class Steps to Success Best-in-Class organizations must continue to monitor the success of their current initiatives, while expanding on their existing capabilities. Adopt new ways to expand workforce analytics efforts to provide even more strategic functionality. Data modeling, forecasting, simulation, and advanced statistical analysis tools allow a much more robust view of the data, and can help shape the future of the organization. Less than one-third of Best-in-Class companies currently do all three. Continue to monitor and control the fundamental building blocks of the current initiative. Best-in-Class companies are adopting tools to secure, store, and assure the quality of HCM data at much higher rate than other companies, however less than 50% of Best-in-Class companies have implemented all three of these solutions in tandem. Corrupt data, avoidable system errors, and inaccurate reporting can jeopardize the level of faith placed in the results generated by any workforce analytics system. Benchmark performance against external data. Forty percent (40%) of Best-in-Class organizations currently compare their internal data with available industry data (salary info, benefits data, workforce demographics, etc.). Understanding where the company stands in comparison to other companies provides a much higher level of insight than simply examining internal data alone. Aberdeen Insights - Summary Workforce Analytics seem far more complicated than they actually are - yet they are not nearly as simple as some would hope. As with any important initiative, proper planning and implementation prove to be the ultimate measures of success. A small amount of effort at the start of the process can reap significant benefits.
Page 17 Appendix A: Research Methodology Between July and September 2007, Aberdeen examined the use, the experiences, and the intentions of more than 200 enterprises regarding workforce analytics solutions in a diverse set of industries. Aberdeen supplemented this online survey effort with telephone interviews with select survey respondents, gathering additional information on workforce analytic strategies, experiences, and results. Responding enterprises included the following: Job title: The research sample included respondents with the following job titles: manager (31%); director (23%); vice president (14%); senior management (10%); staff (9%), and consultant or other (9%). Function: The research sample included respondents with the following functional areas of responsibility: human resources (60%); operations (5%); strategic development (5%); business process management (5%); finance (4%); and IT (4%). Industry: The research sample included respondents exclusively from the following industries: high technology software (16%); health/medical/dental (15%); finance / banking / accounting (9%); education (9%); computer equipment and peripherals (7%); and utilities (7%) Geography: The majority of respondents (75%) were from North America. Remaining respondents were from the Asia-Pacific region (8%) and EMEA regions (17%). Company size: Twenty-eight percent (28%) of respondents were from large enterprises (annual revenues above US $1 billion); 39% were from midsize enterprises (annual revenues between $50 million and $1 billion); and 33% of respondents were from small businesses (annual revenues of $50 million or less). Headcount: Fifty-two percent (52%) of respondents were from large enterprises (headcount greater than 1,000 employees); 29% were from midsize enterprises (headcount between 100 and 999 employees); and 19% of respondents were from small businesses (headcount between 1 and 100 employees) Solution providers recognized as sponsors of this report were solicited after the fact and had no substantive influence on the direction of the Measuring with Metrics report. Their sponsorship has made it possible for Aberdeen Group to make these findings available to readers at no charge.
Page 18 Table 4: The PACE Framework Key Overview Aberdeen applies a methodology to benchmark research that evaluates the business pressures, actions, capabilities, and enablers (PACE) that indicate corporate behavior in specific business processes. These terms are defined as follows: Pressures external forces that impact an organization s market position, competitiveness, or business operations (e.g., economic, political and regulatory, technology, changing customer preferences, competitive) Actions the strategic approaches that an organization takes in response to industry pressures (e.g., align the corporate business model to leverage industry opportunities, such as product / service strategy, target markets, financial strategy, go-to-market, and sales strategy) Capabilities the business process competencies required to execute corporate strategy (e.g., skilled people, brand, market positioning, viable products / services, ecosystem partners, financing) Enablers the key functionality of technology solutions required to support the organization s enabling business practices (e.g., development platform, applications, network connectivity, user interface, training and support, partner interfaces, data cleansing, and management) Table 5: The Competitive Framework Key Overview The Aberdeen Competitive Framework defines enterprises as falling into one of the following three levels of practices and performance: Best-in-Class (20%) Practices that are the best currently being employed and are significantly superior to the Industry Average, and result in the top industry performance. Industry Average (50%) Practices that represent the average or norm, and result in average industry performance. Laggards (30%) Practices that are significantly behind the average of the industry, and result in below average performance. In the following categories: Process What is the scope of process standardization? What is the efficiency and effectiveness of this process? Organization How is your company currently organized to manage and optimize this particular process? Knowledge What visibility do you have into key data and intelligence required to manage this process? Technology What level of automation have you used to support this process? How is this automation integrated and aligned? Performance What do you measure? How frequently? What s your actual performance? Table 6: The Relationship Between PACE and the Competitive Framework PACE and the Competitive Framework How They Interact Aberdeen research indicates that companies that identify the most impactful pressures and take the most transformational and effective actions are most likely to achieve superior performance. The level of competitive performance that a company achieves is strongly determined by the PACE choices that they make and how well they execute those decisions.
Page 19 Appendix B: Related Aberdeen Research Related Aberdeen research that forms a companion or reference to this report include: The Strategic Development of Core HR Systems; September 2007 Learning and Development: Aligning Workforce with Business Objectives; September 2007 Competency Management: The Link Between Talent Management and Optimum Business Results; August 2007 The Global War for Talent: Getting what You Want Won't Be Easy; June 2007 Enhancing Operational Results with Employee Performance Management; June 2007 Information on these and any other Aberdeen publications can be found at www.aberdeen.com. Author: Allison Stamm, Research Analyst, Human Capital Management, allison.stamm@aberdeen.com Founded in 1988, Aberdeen Group is the technology- driven research destination of choice for the global business executive. Aberdeen Group has 400,000 research members in over 36 countries around the world that both participate in and direct the most comprehensive technology-driven value chain research in the market. Through its continued fact-based research, benchmarking, and actionable analysis, Aberdeen Group offers global business and technology executives a unique mix of actionable research, KPIs, tools, and services.this document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provides for objective fact based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte- Hanks (Information Opportunity Insight Engagement Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com 091707a