Insights & Ideas

What HR can learn from procurement when embracing analytics

Software company Rosslyn Data Technologies (aka Rosslyn Analytics) has been revolutionary for businesses in securing commercial value from data using its self-service analytics platform. I joined the team at Rosslyn in mid-2009, and it wasn’t long before realization set in that 99% of procurement professionals were new to analytics, since most still relied on Excel and traditional BI tools for rudimentary spend analysis.

Constraints such as small budgets brought about a tiny group of procurement leaders who sought out innovation to bridge these constraints – determined to secure visibility of costs, compliance and risks associated with suppliers. These individuals were very much the pioneers of analytics – the early adopters who sought out new ways to quickly centralize, organize, improve and analyze data – in the cloud.

It was an exciting time, helping procurement navigate uncharted waters in creating greater business value from cutting-edge technologies. 

Fast forward to 2017 and much has changed in this realm (whilst other elements, such as speed of adoption in certain departments, remain stubbornly the same). Here, I look at just where we are today (as well as discussing what may be the ‘where next?’ for data analytics).

The last bastion of analytics – human resources

When looking at the adoption of analytics in companies, there remains one department that has yet to realize its full potential. Not surprisingly, it’s here that all sorts of services and software vendors are positioning themselves to be on the receiving end of big budgets, as business leaders invest in modernizing the skills and capabilities of their HR teams.

In the past six months, I have had many conversations with HR executives, listening to the challenges they are grappling with in order to better know their employees. The meetings and calls have also given pause for thought and often lead to an inescapable feeling of déjà vu. I have been here before – only a long time ago.

I see many similarities between where procurement was approximately 8-10 years ago – just setting off on the analytics journey – and where HR is today.  

I believe HR teams can learn a lot from procurement so the former avoids the pitfalls of the latter. In doing so, the adoption of analytics by HR teams will accelerate, enabling business executives to fully and successfully prepare for some of the biggest people challenges companies are facing such as how to respond to workforce automation.

The similarities between HR and procurement

Here are my observations of where procurement was then, and where HR is today, in the adoption of analytics. Of course, there were and always will be leaders that outperform, outspend and out manoeuvre peers – but I think my list of similarities are common for the vast major of companies.    

 

The sharing of successes and failures

So, what can HR professionals learn from procurement colleagues? In short, a lot. Here are a handful of points to consider when looking at selecting and using analytics:

  • Ask yourself – what business problem are you solving? In the rush to embrace analytics, it is normal for buyers of software and services to sleepwalk into a trap of data collection on-mass – and attempt to wade through it in order to make sense of it all. This is completely back to front. Your data analytics efforts should always be focused on the problem you, your team or your company seeks to solve by determining the question(s) you want to answer. Only then should you go forth and find the appropriate data. Otherwise, you will spend a lot of time and money collecting volumes of data with little to show for the effort.
  • Start small with analytics. Like a kid at Christmas, there is a lot of excitement to use new tools. Be forewarned that without a plan, your analytics efforts may not net the results you expect. After years of sharing best practices, procurement professionals have developed a roadmap to delivering short- to long-term value; and it starts by getting the basics in place including ensuring that all relevant data is centralized and accurate for analysis. 
  • Focus on soft skills. It’s wonderful to have both data and the tools to visualize and analyze data. However, you need to have the right people in your team who are not only skilled at using technology to interrogate data, but who are also able to translate new found insight for the rest of the business.  Successful procurement teams invest a lot in up-skilling, providing the necessary training, support and encouragement to build strong analytic capabilities. 
  • Work together for the profession. When procurement started to embrace analytics, there quickly emerged two camps that divided the profession – those that were open to change, and those that were rooted to the traditional way of working. This conflict, which you can read about in the blogosphere, hindered procurement's adoption of much-needed new technologies. HR should shy away from organizations that seek to cause division - now is the time for buyers and sellers to work together in establishing new standards and best practices, not argue, disagree and take positions that will only achieve an increasingly fragmented landscape that doesn’t progress.
  • Don’t be afraid to try something new. HR analytics is novel to the clear majority companies – all things considered, mistakes are inevitable. Software vendors and service providers will not have all of the answers to your questions. However, this can be incredibly productive – providing you with an opportunity to be directly involved in helping to develop the future of how HR will work when employing the latest technologies. The early adopters will be the first to secure massive wins, and take leadership roles in their profession and the markets in which their companies operate.  

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