Today, companies compete based on the experiences they deliver to customers and employees. Because these experiences touch multiple parts of the business, every line of business (LoB) needs to fire on all cylinders. The pressure is on to align with the overall business strategy. Yet, while all LoBs do their own planning, budgets, and forecasts, they are seldom created, managed, and shared in a consistent manner. Often, this leads to a disconnect between corporate strategy and how LoBs execute.
HR and collaborative enterprise planning
HR serves as a good example. One of the most critical responsibilities for HR is to plan out workforce requirements based on expected demand, new hiring goals, and predicted attrition. As the company pursues new opportunities or responds to market shifts, HR needs the agility to help the company ramp up quickly.
Ideally, HR makes its decisions based on timely and accurate data. The finance team then uses plans from HR to budget for recruiting, compensation, benefits, and related costs – perhaps establishing a maximum headcount or tying new hiring to sales projections. This back and forth between HR and the office of the CFO – seemingly simple on the face of it – is often impeded when HR budgets and forecasts are produced in a bubble.
One source of the problem is the persistent use of spreadsheets, which are difficult to track and lead to competing versions of reality. What’s needed are better tools capable of collaborative enterprise planning.
Collaborative enterprise planning breaks down silos across the enterprise, interconnecting the plans of each LoB through modern technology. The objective is to bring together the assumptions of various planning groups to guide the business forward.
But what does collaborative enterprise planning look like in the context of HR? How can HR use it to improve its own performance and align more effectively with corporate goals?
1. Real-time analytics
Ideally, HR wants to make workforce decisions based on timely data from across all lines of business – such as demand signals from sales or manufacturing requirements from the operations team. Let’s say the sales team lands a particularly big contract that requires staffing up in a specific plant. If the company can detect this demand surge as early as possible, HR can better support the business in hiring more effectively with workers who have the required skills.
Other considerations can also come into play. At a time when climate change is leading to increasingly unpredictable weather patterns such as microbursts and other violent storms, leading organizations are tracking weather in locations where manufacturing facilities may be vulnerable. Others track geopolitical and local political happenings that may impact global operations. These are just some examples of using analytics to inform decision-making from materials and supply chain planning to staffing.
To track relevant data, spreadsheets and batch-loaded data simply do not live up to the task. Instead, real-time dashboards can deliver up-to-date information and KPIs. What this implies is greater system integration across LoBs. Sales, operations, finance, marketing – ideally, all should be working from a single source of truth that enables the company to run as a finely tuned machine.
Real-time insight is important; but what sets companies apart is the ability to translate this insight into action. Simulation tools can help.
What would happen if a particular plant ramped up production? Does it make sense to hire contractors or full-time staff? Given the labor skills, availability, and costs associated with staffing up in one plant, would it make more economic sense to do that at a different plant? And whatever the decision, what funding requirements need to be considered by the office of the CFO?
Many of these questions can be deduced using advanced simulation tools that leverage machine learning and predictive analytics. HR organizations that run what-if scenarios based on corporate plans can advise the business on the best course of action.
Of course, the accuracy of any simulation process depends on the quality of the data that goes into it. Companies that can pool accurate data across LoBs and make it accessible to all are better positioned to derive insights accordingly.
The last critical component for collaborative enterprise planning is, of course, collaboration. HR needs the ability to seamlessly share information during online meet-ups, in the digital boardroom, via chat functions, and more.
This level of sharing not only increases efficiency; it also reduces the potential for errors. When people across the business can work closely together, using data from a central system, meetings no longer dissolve into arguments about the accuracy of the source. Rather they take off from a point of agreement and move faster into the decision-making phase.
The way forward
With real-time insight and tools for sharing plans across teams, HR can more effectively identify and investigate issues early, communicate insights promptly, measure progress continuously, and become a stronger partner to the business.
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To learn more about collaborative enterprise planning, download the Ventana Research paper “Collaborative Enterprise Planning: Improving the Business Value of Planning and Budgeting across the Enterprise.”
Also, for more information on how you can use people analytics software from SAP to more effectively manage your total workforce, read the gold guide.