Strategic positioning of HR work with proactive and intuitive analyses

The requirements for reports and analyses in the HR segment are growing with the technical possibilities. Until now, People Analytics has been the innovation topic du jour, whereas Predictive Analytics is the current promise. Today, the objective of a lot of Human Resources departments is to proactively and strategically support and advise the different areas of their company. The inquiries range from quick collection of relevant HR indicators to requests for intuitive analyses of possible correlations and conspicuous trends. Such requirements cannot be fulfilled with HR data that are stored in various, non-interconnected sources and which can only be combined with a lot of manual effort. The dm-drogerie markt retail group has addressed this situation with the “noventum HR-Analytics” standard solution which is based on an HR data warehouse and a BI solution based on Microsoft SQL Server and MicroStrategy. With its HR-Analytics application, noventum consulting has been able to consolidate the technical situation as well as the data basis of dm, and to significantly improve the situation of reporting within HR.

dm-drogerie markt GmbH & Co. KG is a German chemist’s shop chain. With approx. 3,500 branches and 61,000 employees, dm is the largest chemist’s group in Europe (as of 2018). In fiscal year 2017/18, dm Germany alone generated revenues of approx. EUR 8.1 billion and employed a staff approx. 41,300 in 1,956 stores. With its dmTech subsidiary, the dm group is operating its own IT service provider. A BI system with MicroStrategy as front end has been in use already since 1998.

Improving the availability of HR data

The HR management department of dm-drogerie markt has been entrusted with a wide variety of tasks which, in addition to salary and wage accounting and maintenance of the employee data in SAP HCM, also include the creation of statistics and reports. The – in part complex – requirements of different groups of recipients could be addressed only to a limited extent with the SAP-internal operation such as SAP queries, Manager’s Desktop, and predefined reports.

Driven by the multitude of reporting requests and the high expenditure that was necessary for responding to them on a recurring basis, dm opted for the realisation of a BI solution of its own for HR. dm expected significantly more flexibility, homogeneity and efficiency for the reporting as well as the technical expansion of the reporting data space through definition of new indicators from the provision of the employee-related data.

Limitations existed in particular where the inclusion of data outside of SAP HCM, the definition of calculations and the flexibility in the reporting are concerned. A lot of requests for reports had to be solved through laborious processes utilising MS Excel and Access. The reports had the familiar disadvantages, they frequently were costly, error-prone and – as a result – inhomogeneous.

dm entrusted the BI experts of noventum consulting with carrying out the project. Decisive for the selection of noventum consulting as service provider were its expertise and references as a data warehouse expert and in establishing planning, analysis and reporting processes.

The project objective

The objective of the project was to set up an HR data warehouse with attached reporting, including automated data management. A homogeneous portfolio of reports as well as a transnationally coordinated indicator catalogue rounded out the objective.

Based on a centrally maintained reporting, power users were to be able to create reports and dashboards specific to user groups and to make them available to the report recipients. In addition, a flexible ad hoc reporting was to be made possible. An authorisation concept for the different user groups was to allow for access to sensitive data compliant with data protection.

The enumeration, by example, of the various report recipients and perspectives on the data space makes it apparent which complexities of differentiation an HR reporting brings with it not just with respect to access authorisations:

• Executive Management
• Secretary’s Offices
• Supervisors/Managers/Executives
• Finances and Controlling
• Occupational Safety and Health
• Human Resources Management
• Works Council
• Representative for severely disabled persons

Another special feature was the separation of the HR data warehouse from the existing enterprise data warehouse. Both from a technical as well as a logical perspective, an independent system was to be created in order to fulfil the requirements posed to data protection and process flexibility.

Working in partnership on a solution filled with life and growing

In a first step, the joint basis for all analysis fields was to be created. The comprehensive review of all relevant topics and perspectives of HR management was behind the idea of a central HR data warehouse and prerequisite to its implementation. Therefore, in the first project, initially employee-related information from two central areas of analysis was structured oriented towards target groups and made available. 

The focus was on connecting the data for workforce structure and movement as well as their main data sources, HR master data (PA) and organisational management (OM).

Thereafter, in order to prioritise future activities, the remaining areas of analysis were also checked with respect as to whether and how they could be integrated into the new HR data warehouse.

The ease of expandability of the later solution was a significant decision criterion for dm. The open architecture and especially the modular data model of noventum HR-Analytics allow for flexible integration options, client-specific enhancements, as well as the integration of various data sources, so that dm opted for the implementation based on HR-Analytics.

dm and noventum agreed on a cooperative partnership and an agile approach. Building upon the HR-Analytics standard, the solution was to be successively expanded by additional topics.

The first analysis step: Workforce structure and workforce movement

In structural reports, indicators were grouped by various characteristics and analysed, in particular, at various levels of the organisational hierarchy. This included, among other things, the representation of age structures, employment status, time-limited employment relationships, or employee categories. As a result, work councils benefit by now, for example, from having important structural data of their areas available at any time and from the fact that the reports are homogeneous and comparable.

Fluctuation figures and an overview of entries and exits as well as internal change activities can also already be displayed based on this basic data base and used by employee representatives/managers to identify critical peculiarities. In addition, employee measures can be developed and offered in a more targeted manner than before, e.g. on the basis of age structure distribution.

Employee lists that provide information about anniversaries, new apprentices or expiring time-limits, have regularly tied up capacities due to the time-consuming creation or were not available at all and now support the day-to-day tasks of those responsible. By including future data, it was possible to transfer the creation of voter lists for works council elections into the data warehouse. This led to a pronounced process optimisation for all parties involved in the creation and utilisation of the lists.

Regional and area managers, some of whom have several hundred employees in their areas, receive important control indicators through structural comparisons based on branch size, average salaries/wages or weekly working hours.

In a further project step, the data warehouse will be expanded to include data from time management. Overviews of vacation and working times as well as upcoming absences, e.g. due to parental leave, now provide supervisors, managers and executives with important information for personnel and operations planning.

Future developments are already mapped for leave and absence data as well as for structural and movement data.

From HR reporting via HR analytics to HR controlling

The automated access to consolidated structural data of the type mentioned is already an undisputed advantage in classic reporting (HR reporting). This advantage increases when – through interactive work and explorative navigation – the data space helps to reveal connections that have remained hidden before. Uniform indicators, such as those established by this data warehouse project, are already important instruments.

However, the decisive benefit becomes clear when the data inventory is looked at as the basis for more in-depth analyses. The representation of past developments (reporting), already provides important information for controlling measures. The identification of correlations between phenomena is possible only with the help of a data base in which links between data have been generically modelled.

As such, noventum HR-Analytics makes it possible to define any analysis paths and to implement them in dashboards. These enable report recipients to recognise dependencies in a targeted manner and to initiate control measures within the meaning of an efficient HR controlling.

Taking it one step further, you can model complex predictive models for future developments and develop simulation scenarios with the help of appropriate software components (MicroStrategy ...) or libraries (R).

noventum HR-Analytics in practise

To establish a transnational and comprehensive HR reporting system was not the objective of this project. However, by establishing the central HR data warehouse, the essential basis for this was already created. The expansion to the second large HCM client within the company group, dm Austria, was already taken into consideration at the beginning and was successfully realised in 2018. In operational business, approximately 3,000 report recipients of the various user groups are automatically supplied with homogeneous dashboards and reports based on a consolidated data base every day.

Finally, the early information of the works councils about the project and their involvement in the conceptualisation and coordination processes was an important aspect that contributed to the acceptance of HR-Analytics in the system landscape of dm.

The decision makers at dm-drogerie markt are very satisfied after the completion of the project and by now the gradual extension of the analysis and reporting framework in cooperation with noventum has become a fundamental part of day-to-day business.

The next project steps are aimed at the integration of billing data, the development of demographic forecasts, the roll-out to other countries and transnational analyses in the sense of a consolidated group HR controlling.