Analytics: creating actionable insight through data
Page 2
Disclaimer
► EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US.
► This presentation is © 2015 EYGM Limited. All Rights Reserved. No part of this document may be reproduced, transmitted or otherwise distributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying or using any information storage and retrieval system, without written permission from Ernst & Young LLP. Any reproduction, transmission or distribution of this form or any of the material herein is prohibited and is in violation of US and international law. Ernst & Young LLP expressly disclaims any liability in connection with use of this presentation or its contents by any third party.
► Views expressed in this presentation are those of the speakers and do not necessarily represent the views of Ernst & Young LLP.
► This presentation is provided solely for the purpose of enhancing knowledge on tax matters. It does not provide tax advice to any taxpayer because it does not take into account any specific taxpayer’s facts and circumstances.
► These slides are for educational purposes only and are not intended, and should not be relied upon, as accounting advice.
Page 3
With you today
Gareth Paine Director — Global Mobility Analytics Ernst & Young LLP (UK) +44 207 951 6943 [email protected]
Nathan Sasto Executive Director — Global Mobility Analytics [SA] Ernst & Young LLP (Africa) +27 11 772 4021 [email protected]
Steve Brown Managing Director Accenture +1 925 974 5216 [email protected]
Page 4
Agenda
► Analytics – an introduction ► The explosion of data and why it’s important ► Current market trends driving analytics in the human capital space ► It’s all about the questions (not the data processes) ► Asking the right questions ► Client viewpoint and case studies ► Becoming a data-driven organization ► Summary and wrap-up
Page 5
What is data analytics?
Analytics is the practice of capturing, managing and analyzing data to drive business strategy and performance by turning raw data into information
Page 6
What do you think?
Polling question: do you have an analytics strategy in place within HR? 1. Yes 2. No 3. Not sure
Page 7
What is data analytics? And why is it important to our business?
CIOs rank analytics as the
#1 factor contributing to an organization’s competitiveness
8 out of 10 CEOs expect complexity to increase significantly in the next five years
Financial outperformers are
64% more likely to use
analytics to evaluate talent supply and
demand on an ongoing basis
Enterprises that apply advanced analytics have
33% more revenue growth and 12X more profit
growth
Organizations that embrace analytics are more than
2X more likely to outperform their peers Top performing enterprises use business analytics
5X more than lower performers
Analytics is the practice of capturing, managing and analyzing data to drive business strategy and performance by turning raw data into information.
Page 8
Why is analytics a hotter topic than ever?
five There are currently
disruptive forces within the market
Evolving digital world
In 2014 there were 7bn
devices on the internet. By
2020 there will be 50bn
Explosion in data
90% of all data in the world was
created in the last two years
Intangible value
In the 1980s the book value
accounted for 80%. Today it accounts for only 20%
Data privacy
Potential penalty for data breach
increased to 100m
Speed of change
In 2011 – 100 marketing
science analytics providers. At
start of 2015 – 1,000
Page 9
110100
1101110101011011100
1
1101010101101101
00010110100
0010100100
0100101
10010001
0000
1001000010
01110
1011100
001111
11011
0010
1011
1000
1100
1101
10001
110100
110100
1101110101011011100
1001000010
00001
Grow our business
Make decisions that ensure the mobility program and talent selections are strongly aligned with future company strategy
It’s all about the questions What are we trying to achieve?
Optimize costs Ensure that program decisions are always made with full information and consideration of possible alternatives
Manage risk
Proactively monitor short-term business travel and assignee processes to ensure potential tax and regulatory risks are flagged well in advance
Travel provider data
HR and demographic
Payroll Security pass data
Assignment data
Performance data
Company’s survey
Page 10
What do you think?
Polling question: how would you rank the importance of the insights that could be gained through global mobility data analytics? (1 = most important, 5 = least important? 1. Cost implications (e.g., savings opportunities through shifts in
staffing, mix of levels and types of assignments, more effective management of duration)
2. Assignment effectiveness – are we meeting the business objectives of the assignment
3. Selection – identifying the right profile of the assignees 4. Post assignment retention 5. Cost of hire for different workers (i.e., assignees vs.
locals vs. contractors)
Page 11
Grow the business
It’s all about the questions Using data to create value
Can we align individual career growth ambitions with the firm’s strategy?
How can we gain proactive visibility of business and regulatory risks, before they happen?
Can we identify trends, patterns, dependencies and bottlenecks to anticipate and predict the future of the global mobility program?
Are we able to identify and anticipate specific hidden activities, such as policy violations and fraud?
Can we identify and effect cost-saving opportunities through visualization of program costs?
How do we measure program ROI effectively so we can implement more effective decisions around program spend?
How do we plan for growth and ensure we have the right people, at the right place, at the right time (at the right cost)?
Can we help ensure assignees are selected to grow overall leadership bench strength?
Manage risk
Optimize costs
Can we identify potential alternative substitutions up-front, prior to initiating an engagement?
Page 12
Analytics maturity curve
Compliance data
Basic HR and demographic data,
payroll data
Travel data, security pass data
New joiners, leavers,
reasons for leaving data
Robust demographic, performance data,
company’s survey, etc.
Compliance
Demographic and compensation
Short-term business traveler risk
Talent and workforce
Diversity and inclusion
Data visualization
Data insight Data foresight
Data depth
Page 13
What do you think?
Polling question: where are you in the maturity model? 1. Visibility 2. Insight 3. Foresight
Page 14
Live demonstration of analytical outputs, case study and client example
Page 15
How do we help ensure the right people are in the right place at the right time? Using analytics to optimize massive event scheduling
Problem statement
► The Rio 2016 Olympic Committee requires just over 70,000 volunteers to service the Olympic and Paralympic events.
► These volunteers will fill diverse roles, ranging from specialist medical practitioners to dignitary assistants.
► These 70,000 volunteers will be selected against 3,500 distinct jobs, each categorized by different skill, language competency, experience and education requirements.
► Historically, this has been an extremely time- consuming, labor-intensive process.
► For the first time, the Olympic Committee has elected to utilize data analytics to help ensure not only that the right skills are matched to the right jobs, but also that all successful candidates are placed in jobs that match their primary preferences.
The better the question. The better the answer.�The better the world works.
Page 16
Using analytics to optimize massive event scheduling
Accommodates over 3,000 distinct job descriptions
► Over 80 fields available to customize job requirements, including skills, languages, education, preferences, etc.
► Global target setting per scenario includes minimum match score per candidate, race/gender/age and disability diversity targets and target representation for Brazilian volunteers
Job builders
Complex rule-based allocation
► Full automated matching of 70,000 volunteers across 3,500 roles
► Business intelligence drill down cloud-based reporting
► Multiple export functions for integration with RIO transactional systems
► Machine learning algorithm for volunteer selection to place most appropriate candidates in the best matching volunteer role utilizing cloud computing infrastructure and high memory instance technology infrastructure for processing results of each scenario
Machine learning-based rapid solution
Massive person-hour savings and increased accuracy
► Each schedule run takes hours as opposed to months enabling multiple scenarios to be created with different target key performance indicators (KPIs).
► Time to schedule volunteers reduced to just over two man months, down from 13 person-months.
► Volunteers are only allocated for jobs, venues and areas for which they have already expressed interest, ensuring more engaged, active volunteers.
► The approach is a first in Games history.
Accelerated results
Page 17
How do we grow our international leadership bench strength? Using the mobility function as a strategic talent driver
Problem statement
Global talent management processes are typically fragmented and lack transparency across borders and businesses, resulting in ad hoc and suboptimal responses to the emerging talent needs of the business. Among other issues, this has resulted in:
► Key talent being overlooked across businesses and country offices and may result in fewer successors in the talent pool than there should be
► Identification and management of talent remains within business and/or geographic silos; little culture of talent sharing across business units, lines and geographies – talent decisions often based more on informal networks than strategic business needs
► No repatriation, talent retention strategy for key talent placed in cross-border roles
The better the question. The better the answer.�The better the world works.
Page 18
Using the mobility function as a strategic talent driver
Know where your talent is
► Adopt a more transparent and inclusive process that recognizes all talent across its business units, lines and geographies
► Produce valid and reliable data for the executive to be able to confidently compare talent across the business – units, lines and borders
► Make more informed and effective appointment and succession planning decisions that assures the fitness of newly appointed leaders to lead in a “global” context
Country overview
Place the right person in the right place at the right time
► Ensure that all assignees are selected from a talent pool that are compared against consistent performance metrics
► Consider financial and logistic tradeoffs of assignee selection in addition to fit for role considerations (i.e., cost and time to deploy)
Data-driven strategic assignments
Build a culture of transparent talent sharing and career development
► Match mobility aspirations (career aspirations and plans) of key talent with demand opportunities that need to be filled
► Create a more scientific, objective approach to assessing and identifying talent, enabling better fit for role and lower settling friction
► Maintain effective repatriation and talent retention for senior leaders, linked to career plans
Match assignee career aspirations and increase retention
Page 19
How do we optimize STBT costs and risk exposure? Using the data analytics to better manage enterprise short-term business travel
Problem statement
Short-term business travelers (STBTs) are a challenge to identify, manage and report on for many organizations. With even more focus from authorities on business travelers, this presents a risk to organizations who do not use the data they have to manage their STBT population, often compounded by the following:
► A process for tracking and collecting STBT data is often undefined and relies on post travel, reactive data collection.
► Access to real-time data on immigration and tax requirements for the countries to which your employees travel is often patchy.
► Typically, only a compliance lens is applied to business travelers, missing an opportunity for further insight.
The better the question. The better the answer.�The better the world works.
Page 20
Using the data analytics to better manage enterprise short-term business travel
Understand your key risk locations and travel routes
► View risk heat map by each risk area
► View trip volumes inbound and outbound from each country and travel routes
► Use filters to view risk profiles for employees to or from a specific country or countries
► Use the other detail pages to review the findings in more detail -- all filters and selections are linked across pages
Country overview
Understand the degree of risk in each area
► View ratio of red and amber risk ratings to total assessments completed
► View total number of red/amber risk alerts by risk area
► All filters and selections linked to all other detail pages
Note
Green = all clear; Amber = caution, employee is nearing thresholds; Red = requirements/ liabilities triggered
The timing of amber alerts can be configured based on risk profile and is intended to drive action steps.
Risk overview
Identify high-risk or high-volume travelers
► Trip and employee volume by date – view by day, month, quarter or year
► Assessments count by risk rating
► Employee count by number of trips made
► Employee count by number of assessments generated
► All filters and selections linked to all other detail pages
Travel and cost patterns: employee
Page 21
Accenture case study
Problem statement
► Do we understand our investment in our mobile talent and contractors?
► Do we optimize our current investment in mobile talent and contractors?
► Are we aligning our investments with our business strategy? ► Business growth ► Recruiting plans, etc.
The better the question. The better the answer.�The better the world works.
Page 22
Case study Accenture
► Accenture is a professional services company with 330,000 employees.
► It has offices in 56 countries and employees working in more than 120 countries.
► Each year, Accenture sends approximately 60,000 employees on assignments and deploys approximately 30,000 contractors in mature and emerging markets.
► Accenture spends approximately US$3.5 billion a year on expats and contractors. Slide courtesy of Accenture
Page 23
Our data analytics journey From massive data to targeted and actionable impact
“We think these are the big issues for the business”
► Lots of data (100 slides) ► Varying quality & reliability of data ► Purely historical data – no forward looking
insight ► Dozens of questions & potential issues ► Wide variety of potential business impact
“We know these are the issues of most concern to the business” “We can identify specific actions to address these issues”
► Seek input and buy in from senior leadership ► Use just enough data to tell the story and pique
their interest ► Forward looking data and trends improves
relevance ► Focus on highest business impact data/issues
early stage Up the learning curve
Slide courtesy of Accenture
Page 24
DDBA program objective and approach Optimizing contractor usage and talent mobilization Objective ► Enable profitable growth, improve operating margin, ensure compliance.
Approach Leverage data analytics to provide actionable insights by business unit and geography: ► What’s the right mix of local talent, expats, and contractors? ► How do we maximize our investment in these 3 sources of talent?
Focused actions: ► Contractor opportunities to drive savings:
► Use of Preferred suppliers and competitive bidding ► Reduce High Rate/Long Term Contractors
► Expat opportunities to drive savings: ► Review assignments to confirm intent | Consider repatriation, Localization, or Perm Transfer ► More GCP usage where applicable between home/host ► Reduce intra-GU assignments by reviewing local skills
Slide courtesy of Accenture
Page 25
Business unit kick-off meetings
Analyzed data to identify business units with the largest opportunities ► Met with business unit COO, CFO, HRO to build baseline awareness of the volumes
and levers that drive their Staffing Strategy
Meeting objective ► Proactively discuss dependencies on expat assignments and third party contractors,
identifying opportunities and actions to maximize investments in these areas ► Provide current and future landscape around expat and third party usage ► Share spend insights and opportunities for optimization
Collaborate and agree on key actions moving forward ► Establish a forum for periodic meetings with business unit leadership ► Agree specific actions to be taken by business unit leadership, with support from People
Mobility and Procurement ► Document and report back to leadership re: $ savings and other results achieved
Slide courtesy of Accenture
Page 26
Executive summary Business unit X example
Expats ► Current trending show BU X will spend about $300M on expat usage in FY15 ► 41% (2,255 ) of BU X assignments are under International Assignment Policy 710 & 59% (3,252)
are on Global Careers Program (GCP) ► BU X ranks 2nd amongst OGs with mobility usage ► Potential opportunity to realize savings associated with Expats costs could be ~$60M
Contractors ► With current trending, BU X will spend about $400M on contractor usage in FY15 ► 65% of Contractor Exchange requests are not competitively bid resulting in higher rates of more
than $100/day/contractor ► Material opportunity for a reduction in costs via added oversight of subcontractors
► Single biggest area of opportunity is to increase level of competitive bidding
We are increasingly dependent on expats and contractors to deliver on client work People Mobility & Procurement are engaging the business to provide insights and prompt actions to improve management of these costs. ► $3.5B was spent across Accenture in FY14 on Expats and Contractors ► $700 M is the estimated spend for BU X alone in FY15
Slide courtesy of Accenture
Page 27
We are increasingly dependent upon expats and contractors to deliver on client work
2005
2010
2014 2020
Accenture currently spends $3.5bn/yr on
contractors and expats
Last Full Year
1 Estimated.
Internal HC: 120K Contractors: 15K1
Total: 135K1
Internal HC: 200K Contractors: 25K Total: 225k
Internal HC: 330K Contractors: 30K Total: 360K
Internal HC: 450K1
Contractors: 50K1
Total: 500K1
Local Contractor Expat
Slide courtesy of Accenture
Page 28
People mobility: trend, expats working on BU X clients YTD BU X trend in assignment volumes will lead to an estimated $300mn in FY15 mobility spend. FY15 YTD BU X assignments are trending up; with a 10% increase compared to ending FY14
Scope: Data as of Q3 FY15 YTD; The total YTD Volume of PM Assignees (cross-DTE) staffed to BU X Clients (Projects). Excluding Business Travellers, and Permanent Transfers.
2,888 3,185
3,416 3,598 3,892
4,155 4,477
4,723 4,989
5,230 5,457 5,712
3,466 3,673 3,934 4,110 4,410 4,689
5,024 5,296
5,535
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
(F) 6,272
Q1 Q2 Q3 Q4
FY14 FY15
Slide courtesy of Accenture
Page 29
People mobility: volumes – expats working on BU X clients YTD BU X ranks second amongst business units with mobility usage. 41% (2,255) of BU X assignments are under International Assignment Policy 710.
Mobility Assignments by OG: BU X Mobility Assignments by Policy:
6,054 26%
5,535 24%
4,121 17%
3,491 15%
2,025 9%
2,160 9%
BU X BU D
BU C BU B
BU A
BU E
3,252 59%
2,255 41%
28 0%
P. 750 - GCP P. 710 - Cross Border Assignments Others
Opportunity for Labor Efficiencies
GCP
Scope: Data as of Q3 FY15 YTD; The total YTD Volume of PM Assignees (cross-DTE) staffed to BU X Clients (Projects). Excluding Business Travelers, and Permanent Transfers.
Slide courtesy of Accenture
Page 30
People mobility: there is $18mn potential savings within BU X top 25 clients Client Total HC
Local HC % Local
Contr HC1 % Contr
Expat HC % Expat CBA % CBA GCP % GCP
Oppty: Unplanned
Extensions2 Reallocation CBA‐>GCP3
Client Oppty Total
372 251 67% 8 2% 113 30% 113 100% 0% $1,618K N/A $1,618K 438 297 68% 16 4% 125 29% 121 97% 4 3% $1,733K N/A $1,733K 905 767 85% 39 4% 99 11% 76 77% 23 23% $1,088K $646K $1,734K 473 405 86% 5 1% 63 13% 48 76% 15 24% $687K $408K $1,095K 595 518 87% 5 1% 72 12% 54 75% 18 25% $773K $459K $1,232K
2,783 2,604 94% 90 3% 89 3% 65 73% 24 27% $931K $553K $1,483K 564 456 81% 17 3% 91 16% 63 69% 28 31% $902K $536K $1,438K
1,069 923 86% 41 4% 105 10% 59 56% 46 44% $845K N/A $845K 1,054 935 89% 45 4% 74 7% 37 50% 37 50% $530K $315K $844K
557 472 85% 4 1% 81 15% 33 41% 48 59% $473K $281K $753K 562 487 87% 14 2% 61 11% 21 34% 40 66% $301K $179K $479K 385 256 66% 1 0% 128 33% 35 27% 93 73% $501K $298K $799K 603 469 78% 16 3% 118 20% 30 25% 88 75% $430K $255K $685K 958 865 90% 24 3% 69 7% 15 22% 54 78% $215K $128K $342K
1,075 935 87% 53 5% 87 8% 12 14% 75 86% $172K $102K $274K 670 571 85% 4 1% 95 14% 12 13% 83 87% $172K $102K $274K 391 315 81% 4 1% 72 18% 9 13% 63 88% $129K $77K $205K
1,854 1,403 76% 40 2% 411 22% 46 11% 365 89% $659K $391K $1,050K 224 145 65% 15 7% 64 29% 7 11% 57 89% $100K $60K $160K
1,413 1,291 91% 22 2% 100 7% 5 5% 95 95% $72K $43K $114K 1,123 994 89% 44 4% 85 8% 4 5% 81 95% $57K $34K $91K 1,934 1,229 64% 327 17% 378 20% 8 2% 370 98% $115K $68K $183K
381 298 78% 15 4% 68 18% 1 1% 67 99% $14K $9K $23K 642 463 72% 6 1% 173 27% 2 1% 171 99% $29K $17K $46K 607 452 74% 24 4% 131 22% 1 1% 130 99% $14K $9K $23K
Potential Savings $13mn $5mn $18mn
1 This is limited to the countries where IQN is fully implemented. 2 Per EY, 1/3 of CBAs are extended at avg cost of $43K. Opportunity potential through elimination of these unplanned extensions. 3 A 10% reallocation from CBA assignments to GCP would result in ~$85K savings per ('N/A' indicates GCP program not applicable).
Slide courtesy of Accenture
Page 31
People mobility: clients with potential for greatest savings through GCP optimization
Potential savings if we reallocate portion of the 280 cross border assignees (CBA) $85k saving per employee: ► 10% from CBA to GCP , potential savings opportunity ~2.5mn ► 20% from CBA to GCP , potential savings opportunity ~5mn ► 40% from CBA to GCP , potential savings opportunity ~9mn
Client A Client B Client C
Client C Client D Client E
46, 11%
365, 89%
CBA GCP
76, 77%
23, 23%
CBA GCP
Subcontractors 40 2%
Expats 411 22%
Local 1,403 76%
Subcontractors 39 4%
Expats 99 11%
Local 767 85%
Subcontractors 17 3%
Expats 91 16%
Local 456 81%
63 69%
28 31%
CBA GCP
Expats 22 44%
Local 28 56%
Expats 38 95%
Local 2 5%
Subcontractors 1 0%
Expats 128 33%
Local 256 67%
22 100%
CBA GCP
38 100%
CBA GCP
35 27%
93 73% CBA GCP
Total Headcount
1,854
Total Headcount
905
Total Headcount
564
Total Headcount
50
Total Headcount
40
Total Headcount
385
Slide courtesy of Accenture
Page 32
People mobility: client X analysis
Host Country Breakdown Country Aug 14 Feb 15
Aug 15(F)
United Kingdom 160 156 -
South Africa 28 42 -
Germany 25 31 -
All other 22 19 -
Total 235 248 276
Client X has the #3 highest BU X active assignments by volume, globally
Global Assignee Volume Trend
GCP, 52: 21%
P710 (BT), 86:
35% P710 (LT), 12: 5%
P710 (ST), 98,
39%
Client X Global Policy Breakdown As of Feb 2015
Client X Global Estimated Annualized Cost Breakdown
Aug 2014 Feb 2015 Aug 15(F)
Cost Est./ Assignee
GCP $1.2mn $2.1mn $2.3mn $40K
Policy 710 $10.3mn $9.0mn $10.3mn
BT/Short - $41K
Long - $125K
Total $11.5mn $11.1mn $12.6mn
Volume forecast for FY15 represent a 17% increase compared to FY14 end. Note: Forecast based on prior data trends, not on feedback from project
Source: PM Analytics – Assignment Volumes Report as of February 28, 2015
216 227 219 206 222 219 220 234 235 244 255 235 237 222 255
207 207 248
050
100150200250300
Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
FY14 FY15
(F)276
Q1 Q2 Q3 Q4
Slide courtesy of Accenture
Page 33
People mobility Through key actions BU X could save about $60 M
Did You Know? What We Can Do! BU X assignment trajectory leading to 10% increase year end with estimated $300 M in total spend on ~ 6272 assignees.
Implement Mobility Talent Planning early-on and on-going within deal-shaping process
1/3rd of P 710's are extended at avg cost of $43K per assignee. Opportunity for potential savings through elimination of these unplanned extensions is ~ $ 32 M
Leverage Deal Shaping Tools and Tax Planning Tool for Engagement Leads to minimize unplanned extension costs; monitor assignments to ensure transition /succession plans are in place early on
A 10% reallocation from P710 assignments to GCP could result in another ~$ 20 M savings / ~$85K savings per assignee
Discuss with CALs and highlight opportunities (e.g. maximize GCP usage, manage extensions, etc.)
Spend on Exceptions in FY 15 Q 2 is ~0.7 Mil ; & FY 14 ~ 0.8 Mil & sometimes without PM advice or biz “cutting deals” leading to increased spend and setting precedence
Involve PM early on to confirm business intent & policy choice – don’t negotiate
Opportunity to save estimated ~ $ 8M if BU X early repatriates at least 3% of our total 710 assignees
Begin local succession planning & back-fill plans early on to ensure cost effective options are considered
Slide courtesy of Accenture
Page 34
Talent Mobilization - Data Driven Business Advisory Scorecard
We have made great progress over the last year but still have a ways to go to fully realize our data driven business advisory vision
Key Components Of An Effective Data Analytics Program & Culture Achievement Observations
► Top-down leadership Strong buy-in at BU level
► Bottom-up engagement Team recognizes value-add
► Talent and expertise Need more dedicated focus
and resources
► Technology and tools Process is repeatable but need to improve cycle time and enhance forward looking data
34
Page 35
Becoming a data-driven organization
Page 36
What do you think?
Polling question: what do you see as the biggest barrier to implementing analytics into your business? 1. Availability or/readiness of data 2. Leadership/culture within the firm 3. Technology platforms to host and deliver an analytics
service 4. Budget to invest in new service 5. Talent availability to design, deliver and maintain
an analytics service
Page 37
How do you become a data-driven business?
Behavioral alignment (Analytics consumption) ► Culture and mental models ► Organization and process
design ► Learning and development ► Incentives and rewards
Strong vision from the top is critical in becoming a data-driven organization.
Technical capability (Analytics production) ► Data quality ► Infrastructure and tools ► Data science
Page 38
Summary
► Trends continue but data generation is growing exponentially.
► Global mobility can use the data to create opportunities for greater alignment to the business.
► It’s not about the data; it’s about the business problem.
► A data-centric culture is the key to the successful use of data within the function.
► Data is the lifeblood of the organization and can create a clear strategic advantage: the goal is to turn data into information, and information into insight.