For more on the application of predictive analytics for HR, attend PAW Workforce, March 31-April 1, 2015
Experts in HR and financial software are predicting that 2015 could produce some important breakthroughs in the use of predictive analytics, in-memory computing, big data and mobile applications.
In interviews, they said a relentless push to the cloud, including software as a service (SaaS), will pick up where it left off last year.
Christopher Iervolino, research director at Gartner Inc., based in Stamford, Conn., said corporations have only scratched the surface of what predictive analytics and big data can do for financial planning and forecasting. The finance department’s use of advanced analytics will become more common in 2015.
“In 2015, we are going to start to see big data find its way into finance, powering more diagnostic, predictive and prescriptive planning and forecasting,” he said. “It is only used by a small minority of organizations right now, less than 10%, but will become used more widely.”
Financial planning and forecasting will benefit from more data and the use of it in predictive analytics.
“We will start to see the financial plan become more accurate, more meaningful and move in faster cycles, more in tune with operational planning cycles and ultimately more accurate financial plans,” Iervolino said.
Cloud will continue to become more accepted as a platform for finance to promote greater collaboration, ease of use and provide improved business value, he added. Competition will also intensify in the cloud financial space as mega-vendors either introduce or increase their cloud offerings. Also, it will become more common to integrate between cloud and on-premises systems, he said.
“Organizations will need to stress the PM in CPM [corporate performance management] with financial planning as the backbone,” he said “Financial planning will need to become more meaningful [and] better integrated into aspects of operational planning.”
In-memory computing — storing data in a server’s random-access memory (RAM) to process it more rapidly — will help enable it. “This is something that has happened already. Organizations in 2015 will leverage these capabilities to a greater degree. As such, organizations will need to familiarize themselves with different technical approaches.”
Paul Hamerman, vice president and principal analyst at Forrester Research Inc., based in Cambridge, Mass., expects cloud software to become more popular in 2015 for a number of reasons.
He said SaaS is expanding partly because it provides better updating, which essentially keeps users on the latest version. With SaaS, customers turn over the job of maintaining versions of software to the vendor, he said.
“In the on-premises world, you sort of get locked in on a version,” said Hamerman, who focuses on HR management and financial applications. “Even if the vendor issues updates to the software, most customers don’t implement those upgrades, so there is a big lag in upgrades of enterprise software in the on-premises world.”
Another key driver is that companies find the newer SaaS systems more flexible because they are easier to configure as the business requirements change, Hamerman said.
It’s not just about cloud for business applications, he added. Analytics is a big area of change, spurred by some much more powerful technology.
Business applications were traditionally designed to capture data, but it was difficult to get meaningful information out of them. Now, more data is surfacing automatically in the application and a lot of it is real-time data. “The visual quality of the analytics is getting better, the predictive capabilities are getting better,” he said.
According to Hamerman, in HR business practices are changing. He sees some big opportunities to innovate in employee performance, learning and recruiting and employee engagement.
Take performance, for example. “A lot of companies are tired of the annual performance appraisal process, which really hasn’t been a very effective tool to drive employee performance,” he said. “The next-generation systems are moving to more of a continuous process, where employees can manage their performance [and] managers can … have more frequent interactions with their employees.”
Holger Mueller, vice president and principal analyst at Constellation Research, based in Cupertino, Calif., said predictive analytics, offered in software from companies such as ADP, Infor, SuccessFactors, Ultimate Software and Workday will for the first time be widely available to HR managers. “One of the first areas that vendors have tackled was around ‘flight risk,’ or determining if a valued employee could leave a company. These days we see them used more for recruiting and selecting highly skilled candidates for the right position,” he said.
Predictive analytics could accelerate hiring processes and help make managers become more effective, he said.
Talent management will be more widely regarded as fundamentally broken in 2015, Mueller said. Established vendors and startups are reacting, and gearing their offerings toward new approaches in learning, workforce engagement and ways to attract and motivate employees from the employee’s perspective.
He also predicts the use of mobile applications will expand in HR, with more processes delivered over smartphones, including recruiting and accessing benefits. More and more employees will be issued a smartphone and in some cases, the phones will be used to track the location of workers, he said.
Mueller expects that employees, like consumers, wlll trade off privacy for convenience, including the ability to clock in and out when their smartphone signs into the corporate WiFi network, thereby indicating break times and their presence or absence. “HR leaders and vendors need to tread carefully not to violate privacy statutes and avoid becoming ‘creepy,’ which would backfire,” he said.
Jason Averbook, chief executive officer at the Marcus Buckingham Co. in Beverly Hills, Calif., agreed that mobile will be critical this year. “If organizations in 2015 do not take a mobile-first approach, they are already way behind,” he wrote in an email.
Averbook said 2015 will also be marked by a continued rise in the consumerization of IT — the blending of personal and business use of devices and applications. It will create two kinds of buying in HR: the traditional purchasing, through company procurement, of enterprise licenses, and licenses that are bought on credit cards and deployed to groups within the organization.
“I truly believe that this is the future, as a one-size-fits-all approach has proven to never work in the space. As far as the health and wealth of [HR technology], the future has never been brighter with new entrants, new technologies and new demands, all driving a focus on meeting the needs of the employee, manager and team leader much more than the needs of just HR.”
Averbook said HR has always had big data and that 2015 will be the year HR organizations take the time to distinguish “right data” from noise. “The hardest part for HR will be to determine what is right for the business and team leaders and deliver it in such a way that doesn’t just speak the language of HR.”
Cecile Leroux, vice president of product strategy and product management at Ultimate Software, and Raul Duque Sanchez, the vendor’s senior director of product strategy, made similar points about predictive analytics and HR software aimed at motivating and engaging employees.
Leroux said onboarding software, for example, offers employees new opportunities for development and learning. As people provide more information about themselves, they can discover ways to unlock their potential and improve, she said.
For more than three years, Ultimate Software has also provided predictive analytics, and has a data-science team based in Atlanta. Through agreements with customers, it has compiled rich data about people and it can use that data in new ways, Leroux said.
“Who are the most resilient kinds of employees? Who are the most engaged kinds of employees? That’s the kind of data no one can dream of getting before,” Leroux said.
More than a year ago, the company released its first product that predicts whether or not an employee will leave an organization in the next year. It also released software last year that can help predict if someone holds the potential to be a top performer. “If you know that someone has a high potential to be a top performer in your organization and they are at a high risk of leaving, your managers need to take intervention,” she said.
By: Dan Ring, News Writer, TechTarget
The following is an excerpt from the original article in TechTarget
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