How to measure an Organization’s knowledge

On an earlier post I was arguing about the importance of collective intelligence for any Organization, in this post I will go over two different KPIs from the Gartner's Business value Model – BVM

According to Gartner:

The Employee Training Index shows the commitment of the organization to invest in its employees as the changing demands of its customers require new knowledge and skills.

The skills Inventory Index show the ability of the organization to fulfill its employee skill needs in order to complete its business activities. Outsourced business activities are not considered part of these skill requirements.


Knowledge management and the management of collective intelligence are significant factors in determining business value. Attracting and keeping superior talent will require the evidence of commitment on the part of the organization. The measurement of this indicator in coordination with other business indicators will bring deep insights about the influence of collective intelligence in the overall success of the Organization.


Employee Training Index=Total training days/Amt of Emp * 225

The Skills inventory index is an indication of the organizations ability to move into new lines of business. It is measures as


Skills Inventory index=Total skills filled by existing employees /Total number of skills needed


With the help of these two indicators any Organization should be able to measure their collective intelligence and its influence in business value generation. The question that still remains is how to leverage this asset? That will be the theme of a new post.

Keep tuned.

Metrics, HR and the value of measurement

On my previous blog titled: Why technology is important to save HR costs and affect the bottom line I tried to explain the importance of metrics in the HR function to better position a company in the recruitment process.
I am not by any means an HR technologist, the reason of my interest is that at a previous place I worked for, it was announced that the Company goal was to grow their revenue up to 1.2 billion dollars in the next 5 years, and I wondered back then how a goal like this would trickle down to the different business departments like Human Resources, IT, Cost, Estimating, etc. It would seem to me that to achieve a goal such as this, all stakeholders should have a clear understanding exactly what would be the way to get there.

It is understood that you will find the measure of the success of any business by looking at financial indicators, but these are trailing indicators, the history after the facts. In the other hand performance key indicators are leading indicators, they will help you better position yourself for the task ahead, and by effectively measuring what is going on any business department will be able to position themselves to achieve the goal ahead. Remember: You cannot manage what you don't measure

For example If the company goal is to hire 50 new employees a year with a delta of 20% increase a year for the next 5 years, and the hiring process is occurring at a 40% recruitment effectiveness index (look at the chart below), it will means that the time to hire and the total recruitment cost must be decreased to reach the company's recruitment goals to be able to achieve the forecasted growth. Obviously like I mentioned earlier, HR is just one indicator in the mix, there are many other stakeholders in the mix.

The Recruitment effectiveness index (REI) is measured as follows (as per Gartner's Business value Model (BVM))

REI=ART*ARC
where:
ART = 1-(Time to hire/365) – Average relative recruitment time
ARC = 1-(Total recruitment cost/1^st year compensation) – Average relative recruitment cost

To conclude, it is important that analytics are included as part of any decision making process.
By measuring you will arrive to better decisions


 

Why technology is important to save HR costs and affect the bottom line

When working in fast growing Companies, where growth depends highly on the quantity and quality of new hires needed, it is paramount that HR processes are automated. Without these technology solutions Human Resources will be contributing to increased opex costs instead of working with a highest efficiency to targeted goal of growth.

It has been proved that Organizations that have introduced technology solutions for key HR areas like the ones shown below will improve the bottom line.

• Talent Management
  
• Staffing
  
• Compensation
  
• Performance Management
  
  

Solutions like Self Service, HR-oriented help desk solutions, HR data warehousing and other will definitely help achieve better results.HR Managers will bring more value to their Organizations by conducting business cases and cost justifications for the introduction of these technologies.
There are a few approaches that HR managers use to determine the value of HR technologies:

1. Process savings
   
2. Headcount changes
   
3. Metrics
   
4. Other
   

All these approaches are well documented on HR literature. I will try to focus on metrics

There are very important metrics available for the HR function that any HR Manager should follow in order to properly align HR goals with the overall business goals. As I stated at the beginning of this post for fast growing companies HR Managers should understand what the right mix of personnel and automated processes is required to:
Deliver the right amount of talent, with the right quality in the right time.

Some of these Metrics are:

1. 
   
   Cost metrics
   1. HR Cost per employee
      
   2. HR admin labor cost per employee
      
2. 
   
   Headcount metrics*
   1. HR Admin ration
      
   2. Payroll admin ratio
      
   3. Staffing headcount ratio
      
   4. Other HR functions ratio per total employee count
      
3. 
   
   Cycle Time
   1. Time to hire (in days)
      
   2. Time to complete transfer or solution
      
   3. Time to complete salary action
      

These metrics are not difficult to collect and should be part of the HR department business dashboard, only them HR should be able to proactively determine whether it's positioned to achieve the company's business goals.

I will follow up this post with other very important HR metrics like

• Recruitment Effectiveness Index
  
• Skills Inventory Index
  
• Employee Training Index
  
• HR Total Cost matrix
  

Stay tuned.

A shared single vision of the future

Formulating the IT Architecture for any company is about strategy not technology. Business owners and IT folks have to come together and unify behind a vision that will drive business value for the company.
If there is a common consensus as to where the Organization is going, it will be easier to plan how to get there, but this is a lot easier said than done. Often times Companies don't have a clear and defined strategic plan and/or they don't involve their IT office on the discussion. I think this is a recipe for failure.

A few months ago, after doing some research, I presented an idea to the CFO to invite Gartner to help the Organization in creating an Enterprise Architecture that would focus in putting together a strategy for IT that would drive value for the business in the short and long term. The idea was simple, get every decision maker together and make sure that everybody has the same goals and the same vision and start building an IT strategy from that point. Although the idea was rejected at the end, the premise is the right one, for IT to succeed a shared vision for the future has to exist between the business leadership and IT.

Without a proper Architecture you will not be able to address increasing system complexity, The IT function will not be funded properly, and the IT systems will not be aligned with business strategies.

Why you should consider updating to Contract Manager V13.

Oracle Contract Management version 13 introduces new features out of the box that will help both users and administrators.

As mentioned on Oracle's release value proposition for CM v13, some of the new functionality and enhancements are within the following areas

• LDAP
  
• Content Repository
  
• Web Services
  
• Version control
  
• User Interface
  
• Configuration Utility
  

I will briefly describe some of them below as per Oracle's document.

LDAP

This functionality will allow administrators to connect to LDAP Servers and import or update users and their attributes into Contract Manager.
In my opinion this is a great new feature and long due in the software. It will reduce the administrative time managing users and also reducing the amount of username and passwords that a user has to maintain.

Content Repository

Contract Manager V13 now offers two different ways to store documents: the original way which is selecting a location on the file server and the new feature that will give you the ability to connect to a content repository like

• Jackrabbit
  
• Microsoft SharePoint
  
• Oracle Universal Content Management
  

Connecting to existing document repositories have a few advantages, like more secured access, the ability to search for documents using the repository tools and the ability to leverage and integrate those repositories with Contract Manager. The question is whether Contract Manager will also allow interfacing with other Content Management systems like EMC Documentum or Columbiasoft Document Locator trough native APIs.

Version Control

Version 13 will offer the ability to automatically version documents upon each save or on demand from the menus. This feature will give us the ability to store snapshots of the document's history providing an audit trail over the life of the document.

Web Services

Web Services have not been introduced as of yet, may be with the release of Service Pack 1. This feature should extend the data exchange between different applications like your Estimating or Accounting Systems, and also be able to automatically input data into Contract Manager. This feature will introduce a new series of integration possibilities.

That said, if you planning to upgrade, and Contract manger is part of an ecosystem of integrated applications, you have to do your due diligence. I have been looking all over the Web and I haven't been able to find out any Architectural document of the new release, to see if they were any changes on the DB schema or in the APIs.

 

 

When bad politics affects company performance

Wikipedia defines office politics as follows:

 "Is the use of one's individual or assigned power within an employing organization for the purpose of obtaining advantages beyond one's legitimate authority? Those advantages may include access to tangible assets, or intangible benefits such as status or pseudo-authority that influences the behavior of others. Both individuals and groups may engage in Office Politics."  Office politics has also been described as "simply how power gets worked out on a practical, day-to-day basis"

What happens when bad politics is affecting company performance?
How do you deal with company 'yes-men' in senior leadership positions that are more concerned with self-promotion than fulfilling company goals and how to influence changes on those behaviors without risking your own career ?

These are questions that I have asked myself in multiple occasions, and although I do not have the answers, I think it should exist mechanisms inside every company that would avoid bad politics to stay in the way of reaching higher goals and better performance.

I would like to know your thoughts ?

Why the Estimating process should be modernized

The top priority of the Estimating process is arriving at the accurate Job Cost. In this era of increased competition, uncertain economy and tight profit margins, the better the accuracy margins, the more changes to be successful during the bidding process.



Most Construction companies use Estimating Software will handle Estimating mechanics like:

• Centralized estimate management
  
• Third party cost Items
  
• Historical work estimates
  
• Cost escalation factors over project life cycles
  
• Real-time cash flow analysis
  
• Detailed earned-value reporting
  
• Team collaboration
  
• Standardized best practices and much more.
  

But the use of Estimating Software is not enough to produce winning bids. In order to produce a good Estimate some of the following key items should be tracked:

• Job labor Costs
  
• Equipment, Material and Subcontractors cost
  
• Learning curves
  
• Estimated costs vs. Final Project costs
  
• Historical activity cost
  

Without the proper mechanisms to gather these Job Cost metrics and feed them back into the Estimating process, it will very difficult to guarantee close to 100% accuracy levels.