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A Practical Approach for IT Governance

Archive for April 2014

ABIT 4: The Role of Analytics in HR

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HR Analytics blog summarizes the need for analytics in HR. “With data becoming widely available and more easily accessible, industries are quick to realize the value of insights that analytics can uncover. Analytics has helped police departments reduce crime, credit card companies detect fraud, companies reduce customer churn rates, and baseball teams win World Series. In Human Resources, with the automation of many HR transactions, from recruitment to retirement along with the need to perform strategically, analytics of the workforce is more important than ever. HR analytics is a lot more than head-counting-it’s about the total amount and the quality of talent, knowledge, and expertise to move your organization forward and stay ahead of competition. It’s about measuring the return on human capital investment and measuring the impact and how HR is driving performance, productivity, and profitability. In many different studies, HR seems to be lagging in this era of analytics and big data. But analytics of the workforce, a company’s most important asset, should be an opportunity for businesses, particularly for HR, to transform itself and align with the business strategy.”  

While some of the analytics may be common across all enterprises, in general, the analytics that are easy to develop and provide value will depend on 1) the maturity of the organization; 2) the size of the organization; and 3) the organization domain (the markets they serve).  There are other factors of course, but the aforesaid three categories provide the basis for a taxonomy of analytics for HR.

As an illustration, let us see why the maturity of the organization impacts the type of analytics that are relevant.  For entrepreneurial organizations that have a high velocity of growth the analytics will be quite different than a mature organization.  Entrepreneurial organizations may prefer the speed of hiring and rapid assimilation of the hired resource as key metrics, whereas a mature organization may be looking at employee growth and attrition rates as key metrics.  The size of the organization also impacts the type of analytics that are relevant.  Larger organizations may prefer multiple set of metrics and rely on statistical evaluation of historical data to provide trends, whereas smaller organizations may prefer simpler metrics and look at historical data as anecdotes to guide the human resources.  The organizational domain is also a significant factor in deciding which analytics are relevant.  In markets where resources required are scarce, then the HR analytics may need to include recruitment channels as part of their analytics, where as in very stable markets where resources are in plenty, then HR analytics may place a higher emphasis on fit to the enterprise culture.  Clearly, the metrics identified above apply to organizations of all sizes, in all domains, and in all stages of the enterprise evolution, however, the  relative importance of the metrics will be different.

Written by Subbu Murthy

April 18, 2014 at 2:00 am

ABIT 3: The Role of IT Analytics: Learning from Mark Twain

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As I was starting to put my thoughts on the next blog on IT Analytics, I thought of Mark Twain. When asked to speak, he inquired as to how long he should speak. A bit bewildered, the requestor asked why it was relevant. Mark Twain quickly replied, “If you want me to give you a two-hour presentation, I am ready today. If you want only a five-minute speech, it will take me two weeks to prepare.” The same holds true for metrics, if a firm needs everything, it is easy do. But if the firm asks for just a few key metrics, then it is a bit harder. Please note that the growth of analytics is strongest in financial management and budgeting followed by operations and production, strategy and business development.  Sales and Marketing and Customer Services are target areas of growth.

The role of IT Analytics can be better understood by making the distinction between micro-analytics (individual Key Performance Indicators) and macro-analytics (combination of multiple metrics).  Individual functions such as sales, operations, finance create a set of domain metrics which are very specific and cover a few specific measurements. These analytics fall under micro-analytics. A Balanced Scorecard view provides macro analytics. Macro analytics is analogous to macroeconomics – dealing with the whole whereas microeconomics deals with a specific domain or area.

However, IT Analytics does require interpreting the data and data trends.  We should be very, very careful in creating analytics from facts/raw-data. It took us a long time to understand and refine the credit score, and to this date, the credit rating system has not reached maturity.  IT Analytics using the balanced scorecard approach seems to be sound, but it will take us a while to get analytics that are mature and have gained wide acceptance.   We started with Mark Twain, so let us end this discussion with him. He also quoted: “Get your facts first, then you can distort them as you please.”

 

Written by Subbu Murthy

April 15, 2014 at 2:18 pm

Posted in Analytics

On-Demand CIOs for Small to Mid-Sized Firms

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Small to Mid-Sized Enterprises can rarely afford a full-time CIO, so I provide On-Demand CIO Services to these firms.   Although I am focused on developing technology that helps mid-market CIOs, I find that my work as a CIO actually helps improve the product.  Previously, I was a CIO/CTO in larger enterprises, and curiously, I find the SME market more challenging.

The focus of On-Demand CIO services is not just on reducing IT expenditures, but bringing the strategic thinking that can help the mid-market enterprise gain a competitive edge and increase revenues.  The best a CIO can hope to achieve is to get a recommendation from a fellow CIO, and to get one from Kristin Russell, Secretary of Technology and Chief Information Officer, State of Colorado, is an honor.  In her email to me, she stated “What you are doing is so very important and valuable, as you said especially to small/mid size firms that really need someone with your experience and expertise, but may not be able to afford it at the time.”

Kristin serves on the boards of CTA –Colorado’s Technology Association, the Statewide Internet Portal Authority (SIPA), and the Department of Business Information and Analytics for Denver University. As a result of her community and professional leadership, Kristin was honored as one of Government Technology’s Top 25 Doers, Dreamers & Drivers for 2013, awarded the Top 10 Breakaway Leader Award by Global CIO Executive Summit and named one of Computerworld’s 2012 Premier 100 IT Leaders. She is also a recipient of the Denver Business Journal’s Forty Under 40 award, the 2009 Silicon Valley Tribute to Women in Industry (TWIN) award and a finalist for the Colorado Women’s Chamber of Commerce 2011 Athena Award. Most recently, Kristin was named CIO of the Year for 2013 by the Denver Business Journal.

Thank you Kristin.

Written by Subbu Murthy

April 10, 2014 at 5:23 pm

Posted in Social Networking