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  1. 1. Analytics Driving ActionJonathan FerrarVP, Smarter WorkforceIBM
  2. 2. Agenda IBM Who we are and what we do Workforce Analytics - Background Analytics in Action Prediction and Forecasting The Ultimate Big Data Social Analytics Getting Started2 19 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  3. 3. IBMs Transformation: An Ongoing Journey1993 19951997 1999 20012003 20052007 2009 2011 2012Gerstner eraPalmisano eraRometty era(93 thru 2002) (03 thru 2011)(12 to present) 3 19 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  4. 4. The IBM - a virtual social community 72% of us outside Americas 64% workforce in Services business 55% workforce has less than 5 years service 36% of employees work remotely 12% from acquisitions & outsourcing deals 1% on global assignments4 19 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  5. 5. Agenda IBM Who we are and what we do Workforce Analytics - Background Analytics in Action Prediction and Forecasting The Ultimate Big Data Social Analytics Getting Started5 19 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  6. 6. CEO StudyHuman capital is the leading cited source of economic value...Human capital71%Products / services innovation66%Customer relationships 52% Brand(s) 43%Business model innovation33%Technology30% Key sources of sustained economic value1 ...but, CEOs face significant workforce challenges. The average turnover in theTotal costs of replacement can reach U.S. is 15% per fiscal year.2200% of an employees annual salary. 2Source 1: 2012 IBM CEO study: Q24 What do you see as the key sources of sustained economic value in your organization?Source 2: SHRM Human Capital Benchmarking Database, 20116 19 March 2013IBM Smarter Workforce : 2013 IBM Corporation
  7. 7. Less than one-quarter of CHROs are using analytics to makefuture workforce decisions. Application of workforce analyticsMeasuring collaboration and knowledge sharing 14% 5%across the organizationEnhancing workforce productivity 39% 14% Evaluating workforce performance 40%15%Retaining valued talent within the organization 38%19%Sourcing, recruiting and onboarding individuals 40%20% from outside the organization Developing workforce skills and capabilities 30%22%Allocating the workforce across the organization35%23%Developing workforce strategy linked to 28% 25%business strategyDeveloping future leaders 29% 26%Can identify historical Can develop scenarios andtrends and patterns predict future outcomesSource: IBM CHRO Study 2010719 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  8. 8. Analytics are critical to HR operations and workforce effectiveness. SmarterWorkforceLearning & CompensationDevelopmentSuccession$ ManagementManagementPerformance Review Workforce PlanningStrategicPerformanceSchedulingPlanning& Staffing HR ValueGlobal HROperationalTalent Acquisition Time & Attendance$ e e nc Benefits Abs mentagePayrollM anSmarter HROperations8 19 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  9. 9. Business Analytics Model Advanced Analytics Business Impact o Segmentation, Predictive modelingand OptimizationAnalysiso Multi-dimensional analysis to betterValue and Impactunderstand business challengesEffectiveness Benchmarking oKey Performance Indicators (KPIs) oPerformance Measured against Best Practices Basic Reporting o Standard reporting that is reasonably automated o Slice and dice data based on standard variablesEfficiencyData Managemento Consolidation of datao Data quality and accuracyTime and ResourcesBased on : Competing on Analytics, Davenport and Harris, 2007919 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  10. 10. IBM Workforce Analytics - a clear purpose Purpose: To embed a culture of analytics within the HR organization Objectives Integrate BI into HR as an everyday tool Develop deeper analytic and predictivemodelling skills Develop key enterprise-wide reports andscorecards sc t y a n Al a c o S syevr u Sl a n e n r t I sc t y a n Al a n e x E sc t y a n A ev t c der P Provide better insights from analytics tor t i pe R e d w es r p e n Einform strategy i ii - i r t Grow analytic skills in emerging countries i li l i l10 19 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  11. 11. Methodology : deep statisticsControl TestGroupGroupTime Prior Post Performance Performance GeographyType of Education Other Brand Hire Type Y = a1x1 + a2x2+ eHorizontal IntegrationSegment and sub segment of population11 19 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  12. 12. Agenda IBM Who we are and what we do Workforce Analytics - Background Analytics in Action Prediction and Forecasting The Ultimate Big Data Social Analytics Getting Started12 19 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  13. 13. Predictive Analytics Attrition Heat Maps Employee segments that leave most frequentlyHigher EducationService : 1 year Appraisal : 2 Grade : 713 19 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  14. 14. Predicting Value - Attrition & Compensation Analytics Combined Cumulative Net Benefit ismaximized at $9M . . .Benefit ($k). . . yielding an attritionreduction of 2.7%. 2.7pts Attrition Reduction1419 March 2013IBM Smarter Workforce : 2013 IBM Corporation
  15. 15. Building a Risk Index EnvironmentDefinition Variables Tested External Economic The state of the overall economy; The labor markete.g. Inflation; Unemployment LegalLabor law trendse.g. Employment regulations PoliticalPolitical trends beyond the law and legal environment e.g. Political instability Social Demographic changee.g. Quality of life Internal TechnicalWorkforce & workplace stability; size of workforcee.g. Voluntary resignations; headcount LegalVoice behaviors e.g. Employee complaints Social Corporate/Organizational culturee.g. Surveys Demographics Demographic trendse.g. Tenure, band, PBC Attitude Employee satisfaction/dissatisfaction e.g. Surveys CognitionRational choice; Individuals fully process all relevant information toe.g. Cultural values (e.g. Hofstede, World Valuemaximize their personal welfare Survey) Affect Moods and emotionse.g. Cultural diff. in emotional expression1519 March 2013IBM Smarter Workforce : 2013 IBM Corporation
  16. 16. Employee / Labour Relations hotspotsProvides a view acrossthe world at a quick glance16 19 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  17. 17. Bubble ChartProvides a view ofinternal / external volatility relative toemployee size across time periods17 19 March 2013IBM Smarter Workforce : 2013 IBM Corporation
  18. 18. Heat Map - At Multiple Levels of Analysis Provides a view offocus areas based on rankings across Countries/ Business Units/ Cities Sorted in numerous ways Total/Internal/ExternalInternal Volatility Components 1-7 External Volatility Components 1-5Country LevelBU LevelCity Level18 19 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  19. 19. Agenda IBM Who we are and what we do Workforce Analytics - Background Analytics in Action Prediction and Forecasting The Ultimate Big Data Social Analytics Getting Started19 19 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  20. 20. Analyzing Big Data created by social interactions Dynamic Recommendations Social Network Building Community Metrics Sentiment Analysis Social Influence Analysis2019 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  21. 21. IBM Social Pulse21 19 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  22. 22. Agenda IBM Who we are and what we do Workforce Analytics - Background Analytics in Action Prediction and Forecasting The Ultimate Big Data Social Analytics Getting Started22 19 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  23. 23. IBM Institute for Business Value + Surveyed 3,000 executives, managers and analysts plus extensive interviews Respondents represent more than 30 industries in 108 countries Interviews with IBM and MIT thought leaders Analysis by IBM and MIT SMR team BAO Analytics: The New Path to Value Landing Page: External Links to the full study and a 22 minute video and presentation highlighting the key findings [http://www-935.ibm.com/services/us/gbs/thoughtleadership/ibv-embedding-analytics.html]23 19 March 2013IBM Smarter Workforce : 2013 IBM Corporation
  24. 24. Organizational obstacles, not data or financial concerns,are holding back adoption Primary obstacles to widespread analytics adoptionLack of understanding how to use analyticsto improve the business38% Lack of management bandwidth due to competing priorities34%Lack of skills internally in the line of business 28%Ability to get the data 24% Culture does not encourage sharing information23% Ownership of the data is unclear or 23%governance is ineffectiveLack of executive sponsorship22%OrganizationalConcerns with the data21% Data Perceived costs outweigh the projected benefits21%FinancialNo case for change 15%24 19 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  25. 25. Lessons learned1 Cultural shift from data extraction to business analytics2 Stakeholders need to set clear priorities for data and analytics3 Need a broad range of skills4 Simplicity and elegance outweighs bells and whistles5 Take some risks with new tools open peoples minds to the opportunity6 If you do what youve always done, youll get what youve always got2519 March 2013 IBM Smarter Workforce : 2013 IBM Corporation
  26. 26. Getting Started - Recommendations Recommendation 5: Recommendation 1:Use an information Focus on theagenda to plan for biggest and highestthe future value opportunitiesRecommendation 4: Recommendation 2:Keep existing Within each capabilities while opportunity, start with adding new onesquestions, not data Recommendation 3:Embed insights to drive actions and delive