People Analytics Platform: Buy or Build? We Recommend Both
The use of people analytics in an organization often grows out of one simple request. What starts as a small “data project” blossoms into a much bigger need. Along the way, your organization faces the question: Do we keep building this technology internally or do we buy an outside solution? The answer depends on what stage you are in.
Here's a typical scenario: Your leadership team is preparing for the quarterly board meeting and asks HR to create a report on the most important workforce metrics. They don’t realize that this is easier said than done -- your HR system doesn’t provide this data with a click. So, you and a data analyst colleague get to work. You pull data from your HR system and other sources. Using tools like Power BI or Tableau you create a professional-looking dashboard that answers the board’s business questions. Congratulations, you’ve created the company’s first people analytics technology.
Too Much Success?
Chances are, your successful first dashboard results in more requests from management: Can you show us last year’s turnover by business unit? What about the cost per hire for the finance function? Can we drill down to the employee level? Soon, the requests become harder to fulfill, some data is missing, and perhaps your reporting accuracy gets called into question. Your once-simple dashboard gets messy and hard to understand. At some point, it’s simply no longer sustainable with the current resources the company is putting into it.
Productizing People Analytics
So, what comes next? For the follow-on stage of growth -- to scale your organization’s people analytics capabilities for long-term success -- you need to begin to shift the focus from “project” to “product”. This means productizing people analytics into a scalable tool that can be used by internal stakeholders throughout the company.
Start by understanding the limitations of your homegrown dashboards. Asking these questions will help:
Then, consider the entire range of human resources your organization will need in order to scale your model and get a return on investment: architects, infrastructure specialists, dev ops, quality control, engineers, UI/UX, product managers, and adoption specialists.
When buying make sense
When your company reaches the productizing stage with people analytics, it is difficult to justify the expense of building versus buying. Building a user-friendly platform that works with existing HR data to provide reliable insights takes years and a huge investment (Crunchr’s platform took six years to develop). Yet, your company needs these insights now. That’s why buying is nearly always the best way forward.
Here are just a few of the benefits of buying a platform solution, using Crunchr as an example:
If your company is completely new at using people analytics, go ahead and pioneer. Take an initial 18 months to build an in-house operational model. The advantages are that you will get to know your HR data, the data gaps, and the kinds of business questions that are most important to answer. It will also allow your team to “sell” the usefulness of these insights to senior decision makers and to build a case for HR as a value center rather than a cost center.
Then, when your model begins to become unsustainable - at the stage where it breaks down when trying to respond to complex requests - it’s time to buy a tool that will scale with your company’s growing need for data-based decision making.
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