Could HR become the analytics powerhouse of the enterprise?

Looking at the role of HR today this probably seems like the most ridiculous question to ask, but there is a reasonable basis for asking this and in fact there may even be some good reasons to answer Yes! With the emergence of social media we’ve seen increasing interest in understanding people interactions (who they are, who they know, what they do, think, need, feel, …) in order to improve business decision making. Thus far its primarily been used to allow companies to better understand their customers across marketing, sales, and support. The winner of this social analytics tsunami has been the CMO who is increasingly being seen as a provider of key analytics services & insights to the business (Five Years From Now, CMOs Will Spend More on IT Than CIOs Do).

Now lets shift our focus from the customer to the employee and ask ourselves the same question. Can analysis of the employee and their interactions help the business make better decisions? If we truly understood what was going on across the enterprise (e.g the interactions and activities that closed a deal) and not just the end result (e.g the deal closed), how would that inform future decisions? Some customers talk about this as analtyics-driven decision making where they need a Watson-esque answer to a variety of questions ranging from “which customer should I touch base with this morning?” to “how many units of X should I order for the NYC store?” to “how can I minimize attrition across all key skill areas?”.

But how does an analytics-driven business relate to HR?

While HR has a long history of keeping track of employee’s personal information; their salaries, performance ratings, skills, and training, they are not renowned for their analytics skills. However, if we’ve learned anything over the last few years its that “data is king”, and he who owns the data controls how that data gets analyzed. HR is already starting to make the transition “from data hoarders to data analyzers” with projects ranging from predictive recruitment to learning forecasting to retention analysis. However I believe they are missing their true potential by looking purely to HR scenarios and maybe not recognizing that what they are building is more broadly valuable to the business.

In order for HR to be able to predict recruitment, assess skills & learning, or evaluate attrition risks and actions, they need to grab data from multiple applications across the enterprise; project management systems, development tools, sales applications, and our best friend (perhaps the most valuable of all systems) the Enterprise Social Network. Once they have done this they (and their data) has now become in essence the enterprise graph that potentially encodes all people properties, actions, interactions, and relationships. And once they start applying analytics to that data, initially for their own purposes, they start generating much broader value to the business. For example; once they have performed organizational skills gap analysis for predictive recruitment, they have the data and analysis to provide the employee with career advise or the sales guy with people recommendations for helping to close a deal.

No-one has yet stepped up to take ownership of the enterprise social graph. I know I would have never assumed it could be HR based on their track record of innovation, but maybe? In large part the outcome will depend on how much HR organizations can transform themselves to meet the new challenge of an analytics-driven social business, where people are at the heart of everything we do and everything we analyze.

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