4. Establish Workflow and Consolidation
Workflow must be established to provide process control from a governing perspective. Have all designated parties contributed to the planning? Have top-down targets been met? If it’s in line with strategy and on time, the workflow should provide a verified, complete set of planning data. Through consolidation, the data is totaled and then can be compared with strategic goals. This may prove to be fine, or another iteration may be necessary.
For example, if you projected productivity increasing by 10 percent and you have total personnel costs not increasing by more than 12 percent, you may discover that you have enough personnel onboard for next year but the salary planning exceeds budget. Or it could be that you’ve broken down your targets for a 10 percent reduction in staff, but some teams could not function to meet requirements at the 10 percent reduction. So new iterations are needed to align planning with your goals.
How Jedox Technology supports the process
Many companies drive this process with Excel, and have come to know first hand the meaning of the term “Excel hell.” This process is manual, labor intensive, repetitive, and requires untold version management. On the other hand, Jedox’s central OLAP database makes workflow and consolidation easy by updating automatically and providing immediate iterations based on input. Users can see deviations easily and readily identify their source.
5. Integrate HR Planning into Enterprise Financial Planning
Once the HR planning is aligned with strategy, it can be integrated to the cost center planning and finally to the profit and loss statement (P&L) to provide a consistent view of financials across the enterprise.
This process is a growing trend, driven from the financial side. According to Yvette Cameron, research director for human capital management technologies at Gartner, there is a global trend where the chief financial officer is taking greater interest in HR, resulting in “a greater uptake of conversation about HR and finance together.” From our perspective, this is a natural and logical development.
How Jedox Technology supports the process
Jedox features free database modeling, so instead of having a fixed schema of an application, it is highly flexible in defining data structures and providing dimensions and cubes to meet your requirements, regardless of your enterprise systems. Think of having a cube for HR planning, another for cost control, and another for P&L. With Jedox, these cubes can be easily linked using an online calculation rule, so users can pick data sitting in one cube and have it display in the others. This feature is powerful integration.
Case in Point
Now that we’ve looked at the HR planning steps and how Jedox technology supports their efficient execution, let’s examine a real-world example of how effective HR planning can accrue to a company’s benefit:
Unitymedia is Germany’s leading cable network operator. The company has 2,700 employees and provides broadband cable services to 13 million households in three states. Unitymedia is a subsidiary of Liberty Global, the largest international TV and broadband company. Unitymedia is in the process of replacing its Excel-based tools for planning, reporting, and analysis with a Jedox-based solution. Due to the positive experiences within its finance department, the company has also deployed the software in human resources.
Thanks to Jedox, the HR team was able to implement a tailored planning solution for its specific needs. The granular planning model includes all material costs allocated to internal and external staff. It also automates complex cost accounts, individual commission models, and staff shifting through defined formulas and rules. Planning at Unitymedia is based on actual data, which is loaded monthly from SAP HCM and adjusted by HR business partners in the individual departments. As soon as the plan data has been revised and approved, the aggregated full-time equivalent (FTE) values and costs are available in the financial planning. This clearly shows how the planned personnel spending affects the P&L. In the future, the team intends to add rolling, medium-term planning and further statistical analyses to the Jedox solution. A dashboard containing all HR performance indicators is also in planning (click here to read full case study).
Doing it right?
More than a century ago, the American author and entrepreneur Orison Swett Marden made an observation that holds today: “A good system shortens the road to the goal.” For HR planning, the five process steps above are a good system. But to get the most out of them, enterprises need to incorporate technology that helps, not hinders, reaching their planning goals.
A recent independent study shows that 90 percent of all companies still use Microsoft Excel for annual planning – and find they are reaching its limits. This finding is true for HR planning as well. Here’s a question you need to answer to determine if you’re doing HR planning right: Is Excel still a principal tool in the process? If so, chances are you’re not doing it right.
A better tool for HR planning is Jedox. It empowers business professionals to capture and write back budget data through the Web and mobile devices. Jedox Web gives budget owners throughout an enterprise direct access to essential business data. Managers run scenarios and what-if analyses to make well-founded decisions in line with strategic plans, which is, of course, a principal goal of HR planning.
You want to kick-start your HR planning with an easy to use, prebuilt planning model? Discover the Jedox Model for HR professionals and test-drive the application in the Jedox Marketplace (no download required):