Why Organizations Don’t Get People Analytics

As people in our industry do, we keep a close eye on technology trends, especially those that affect people and the way work and learning get done. For several years, we have been seeing a lot of noise about people analytics. It appears that the world of human capital management has made little progress.

We have the trusted experts at Bersin by Deloitte telling us last year that even though CXOs believe HCM analytics is paramount, HR analytics was “stuck in neutral.” This year they say that the field has “turned the corner” because now 8% of companies feel they are capable of using predictive analytics. This is after years of hype, press coverage, webinars, seminars, on and on.

Why the Slow Growth in People Analytics?

A Google search on “why analytics projects fail” returns 1,380,000 results. When we dig into the details, we find that many companies embarked on large-scale analytics projects without a clear idea of what they were trying to accomplish. An entire school of thought grew up around the idea that big business should gather all the data available, analyze it, and “let the data tell the story.” Forgive us if we see that as a way to spend a lot of resources on no answers.

Another dynamic is the way business leaders make decisions. In a recent Forbes Knowledge Group™ study,

• “Nearly two-thirds (65%) of executives believe subjective factors that can’t be quantified (including company culture and corporate values) increasingly make a difference when evaluating competing proposals. Only 16% disagree.
• ...A majority (62%) of executives say it is often necessary to rely on gut feelings and soft factors.
• ...A majority (61%) of executives agree that when making decisions, human insights must precede hard analytics.”[1]

Why would CXOs want to spend resources on building analytics capability when their gut instincts are their primary decision tool?

The Path to Success

Not all is trial and trouble, and success stories in analytics abound. We have seen a restaurant chain increase sales by 50% and a global brewing operation grow its premium market share by 40%.

In today’s world of software as a service, cloud solutions, and the proliferation of excellent consulting companies, building your own on-premises analytics capability makes sense for only the largest, most resource-rich enterprises. For most businesses, using the services of an analytics provider on an as-needed basis makes much more sense.

For the emotional decision-makers, we put it this way. Would you want to order automobile parts from a dozen suppliers and assemble your own car? Would you hire a gaggle of developers to build your own financial software? Should you build your own payroll system?

Outsource Your Analytics

The infrastructure, software development, and scientific expertise for advanced analytics are all expensive. Just on the basis of cost alone, using a vendor makes more sense – but there are other considerations:

• Vendors and consulting companies spread costs out over a large number of customers.
• An experienced consulting company’s experience reduces the risk because they know the potential challenges and how to prepare for them.
• Vendors and consultants succeed on their reputations. Your analytics partner will invest in your success.

Know Where You Want to Go

The path to success begins with a clear idea of what you want to accomplish. Work with line-of-business leaders to identify an issue or an opportunity they want to address. Form a cross-functional team, and help your line-of-business leaders solve their problem.

We are sure that if you pose the right question, you will have more help than you need. For example, what would happen if you were able to analyze recruiting data to improve new hire turnover in operations by 10%? What would the payoff be?

A Long Journey

The journey to success in analytics doesn’t have to be a sprint. Plan for a long path beginning with small successes, growing your capability as you learn.

References :

1. Only Human: The Emotional Logic of Business Decisions. Fortune Knowledge Group (Time, Inc.). 2014.

Pixentia is a full-service technology company dedicated to helping clients solve business problems, improve the capability of their people, and achieve better results.