Cognos Workforce Analytics

Bill Maloomian – Regional Manager Performance Applications

Cognos Leadership

• Leader in Performance Management• $825.5 million annual revenue (FY2005)• $522.9 million in cash, no debt• 23,000+ customers in 135+ countries• 80% of Fortune 1000; target Global 3500• Strong channel: 3,000+ channel partners• Competitive advantage:

- 3,300+ employees - 850+ strong R&D team - 2,000+ customer-facing field force

HR Industry Footprint

Cognos Performance Management solutions have helped

many leading organizations make strategic decisions

around staffing, planning, and HR budgeting that support

company goals

For success stories, see www.cognos.com/solutions/department/human-resources/customers.html

The Experience to Help You Succeed

Cognos Applications

Over 300 Customers

Over 7 Years of Wisdom

“I wish we had this 10 years ago. We would’ve been so much further ahead.”

— Keith Lewis, Vice-President, Business Development Advantis Technologies, inc.

Reflections on the Value of Human Capital

“We spend all our time on people. The day we screw

up the people thing, this company is over.”

- Jack Welch – Chairman & CEO General Electric

Workforce Management Landscape

CEOs Need HR to Act Strategically

Corporate success does not match corporate goals

Poor alignment between business strategy and HR strategy

67% of HR & IT functions do not align with corporate or business unit

strategies *

HR Practitioners cannot get timely, actionable insights into their

workforce

Other Industry Challenges

Graying workforce/looming skills shortage

Increasingly competitive labor market

More fluid workforceNeed: timely visibility into workforce measures to optimize planning, decisions* The Office of Strategy Management, Robert S. Kaplan & David P. Norton, Harvard BusinessReview, October 2005.

HR: Impact on Bottom Line

Source: Saratoga Institute, Talent Market Group

43% People costs

1% HR Admin

8% Benefits

4% Staffing

30% Compensation

57% Other Operating Expense

60% of HR Executives cite better alignment of HR metrics with corporate strategy as a top priority

71% agree that providing tools to analyze HR metrics is their biggest challenge

2% report having a fully automated HR Metrics system

Source: Corporate Leadership Council

HR costs are a significant % of

total operating costs!

Challenges in Human Resources: Retaining Key Employees and Cultivating Talent

Financial Services: More Than Half of Customer Defectors Switched Firms Because Their Broker Switched.

Source: The Loyalty Effect, Frederick F. Reichheld, HBS Press 1996

Public Sector: By the End of 2005, 40% of All Federal Workers, and 71 % of Senior Executives, Will be Eligible to Retire.

Source: Strategic Recruitment for Government, The Performance Institute, February 2003

Manufacturing: 80% of US Manufacturers have Serious Shortage of Qualified Workers.

Source: 2005 Skills Gap Report – A Survey of the American Manufacturing Workforce, National Association of Manufacturers, Deloitte Consulting

Utilities: 40% of Senior Engineers and 43% of Shift Supervisors Eligible for Retirement by 2008

Source: Workforce Trends to Deliver Utility Industry a Knock-Out Blow, Hay Consulting

Challenges in Human Resources: Disconnect Between Corporate Strategy and HR Practices

0%

20%

40%

60%

80%

100%

"To what extent does your HR organization have the capacity to effectively respond to the CEO’s

priorities?"

Less Then Required Moderate

Relatively Responsive Very Responsive

“Growth. Responsiveness. People. The three top issues on the

CEO’s agenda.”

Can’t achieve “Growth” and “Responsiveness” without “People”

Most Chief HR Officer’s don’t feel they have the resources necessary to address the CEO’s priorities

Source: IBM Global Human Capital Management Study

So What? Retention and Workforce Performance Management Have a HUGE Impact on Profitability

High Performance Work

Practices* Lead To…

Source: Mark A. Huselid, “The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance,” Academy of Management Journal

* “High Performance Work Practices” include comprehensive employee recruiting and selection, incentive compensation and performance management, and extensive employee involvement and training.

$3,841

$18,641

$27,044

Increased Profit perEmployee

Increased Value perEmployee

Increased Sales perEmployee

Does HR Align with the Business?

32%40% 41%

76%

Use Now Use in the Future

"Do You Use Now - and Would You Like to Use in the Future - Proft per Employee as a Key Metric for HR Effectiveness?"

SVP & Below C-Level

Source: Veritude, 2005

What is Cognos 8 Workforce Performance ?

A next-generation packaged analytic application that :

1. Provides HR, executives and line managers with timely insight on key workforce measures

Reporting, Analysis, Metrics

Headcount, turnover, workforce demographics, retention, employee performance, etc.

PSFT 8.3 / 8.9 (SAP v5.0 under development)

2. Transforms transactional workforce data in to actionable information

Complete consistent, relevant, accurate, auditable

Drill through to detail

3. Enables organizations to manage and optimize their most costly asset

Built upon an Adaptive

Application Framework that :

1. Model-driven approach VS

programmatic-driven approach

2. Configures to organization-

specific HR practices

3. Model driven approach reduces

TCO and increases business

agility

What is Cognos 8 Workforce Performance ?

BI AUTHOR

BI MODELLER

WAREHOUSEDESIGNER

ETLDEVELOPER

SOURCEANALYST

The Current Situation

CustomSource

PeoplesoftHCM

Warehouse

ETL Code

Authored BI(Reports, Analysis, Metrics)

Semantic Layer

SKILL TIME ERRORLEVEL RATE

HIGH / MEDIUM HIGHMEDIUM

HIGH / MEDIUM HIGHMEDIUM

HIGH LONG MEDIUM

HIGH LONG HIGH

HIGH MEDIUM MEDIUM

BI AUTHOR

Cognos 8 Workforce Performance

CustomSource

PeoplesoftHCM

Warehouse

BI MODELLER

WAREHOUSEDESIGNER

ETLDEVELOPER

SOURCEANALYST

SKILL TIME ERRORLEVEL RATE

ETL Code

Authored BI(Reports, Analysis, Metrics)

Semantic Layer

HIGH / MEDIUM HIGHMEDIUM

HIGH / MEDIUM HIGHMEDIUM

HIGH LONG MEDIUM

HIGH LONG HIGH

HIGH MEDIUM MEDIUM

Security

Metadata

Data Access&

Integration

ContentMGMT.

Portal

COGNOS

8

ADAPTIVEAPPLICATIONFRAMEWORK

ConfigurableWarehouse

ModelSupplied

ConfigurableInformation

ModelSupplied

FMExtension

Source ModelGenerated

BI AUTHOR

Cognos 8 Workforce Performance

CustomSource

PeoplesoftHCM

Warehouse Generator

BI MODELLER

WAREHOUSEDESIGNER

ETLDEVELOPER

SOURCEANALYST

SKILL TIME ERRORLEVEL RATE

ETL Generator

BI Generator(Reports, Analysis, Metrics)

Semantic Layer Generator

HIGH / MEDIUM HIGHMEDIUM

HIGH / MEDIUM HIGHMEDIUM

HIGH LONG MEDIUM

HIGH LONG HIGH

HIGH MEDIUM MEDIUM

Security

Metadata

Data Access&

Integration

ContentMGMT.

Portal

COGNOS

8

INFORMATIONMODELLER(S)

ADAPTIVEANALYTICS

ADAPTIVEWAREHOUSE

ConfigurableWarehouse

ModelSupplied

ConfigurableInformation

ModelSupplied

ADAPTIVEAPPLICATIONFRAMEWORK

FMExtension

Source ModelGenerated

ROLE-SPECIFICREPORTSANALYSIS

METRIC TYPESGENERATED

FM MODEL WAREHOUSE

ETL/DDLGENERATED

TraditionalApproach :

Long &Error Prone

CognosApproach :

Rapid &Accurate

Impact to Organizations

From To

Implementation Time Quarters/Months Months/Weeks

Skill-sets Required Many & Highly

Specialized Technical

Significantly Reduced

Requirement

Best-Practices Complex Coding Configurable

Continuous Relevance No Yes

Upgradeable Hard/Rare Yes

Data Lineage / Auditable ?? Yes

Partner Value Low High

Workforce Analytics v1: Subject Areas

Headcount and Turnover Analysis Headcounts, Workforce Demographics, Hires, Transfers, Terminations

Detailed granularity with Calendar (e.g. weekly) and Fiscal (e.g. monthly) Snapshot Summaries

HR Budget

Compensation and Incentive Analysis All Earnings and Withholdings of All Employees

Regular pay, overtime pay, incentives, bonus, regular hours, overtime hours

By Pay Group, Pay Date, Company, Business Unit, Organization, Earnings Type, Withholding Type, Dates

Performance Review Analysis Employee Reviews, Ratings, Review Points, Total Points

By Review Type, Employee, Review Status, Review Type, Organization, Dates,

Cognos Workforce Analytics Helps You Improve Profitability with Pre-packaged Workforce Management Provides Timely Insights to Assist Workforce Management and

Stem Employee Attrition

Pre-Packaged HR Information

Analytic Paths Support Best HR Practices

Supports Key HR Process

Acquire Deploy Optimize Retain

Which Skills Are Key?

Where is our Top Talent Located?

What is the Right Compensation for Open Positions?

Where do we Need to Hire to Meet the Corporate Goals?

How Do We Reward Top Performers?

Where Do We Have Excessive Sickness?

Are Employees Aligned to the Business Goals?

What Affects Performance of Top Performers?

Are Performance Reviews Timely?

How Many Employees Are Ready for Promotion?

How Many Employees were Promoted Last Year?

Where Do We Have High Turnover?

Which Separations are Avoidable?

Are We Motivating Top Performers?

Are Top Performers Leaving? Where? Why?

MEASURES MONITOR PLAN OUTCOMES With Supported Analysis By

Completion, attendance ratiosProgram, certification expensesActivity profitabilityPerformance outcome ratiosSatisfaction ratings...

Cognos 8 Workforce Analytics

ROI per employeeHeadcount costHeadcount variance Requisition fulfillment cycle timeTermination cost per employeeTermination costTurnover rate

Absence rateAccident rateExposure hoursAccept ratioAgency effectivenessCost to hireVacation days balanceVacation days entitlement

Performance review resultContribution factorMaintained qualification countReview resultScarcity levelSuccession percentageTraining % of revenue….

Company

Organization

Location

Responsibility Center

Job Position

Job Category

Vendor

Assignment

Salary Plan Grade Step

Calendar Month

Fiscal Period

Employee

Hiring Manager

HR agent

Annual compensationBenefit plan enrollment Compensation % increase Increase Variance]Customer service award varianceDependant countEmployee, Employer contributionEmployee opt out ratio Incentive awardHourly pay rate ….

Absence days countAccident Severity RateAccident Lost time Rate

High Performance ratioLow Performance ratioEmployee Development cost Development cost per employeeHigh Performance turnover rate

Incentive Pool varianceBenefit cost per employeeMerit Pool Varianceincrease variance count

termination rateFTE count Human capital ROITime to hireTurnover rate....

Headcount, Planning

Compensation & Salary Planning

Improve

Growth

and

Profitability

Headcount & Turnover

Compensation, Incentive

Performance, Succession

Recruiting , Absence & Accident Analysis

Learning Management

Benefits Planning

Restructuringplanning

Payroll & Reconciliation Analysis

Payroll Liability Planning

Recruitment Planning

Trained, certified headcountInvestment factorsTraining cost factorsRevenue/expense ratios

An Example of Workforce Analytics: Today, HR Can’t Meet Changing Business Needs

“I need a report just likethis, only with everyone’s

previous manager.”

Change RequestGets Queued

HR & Business Managers

Business Analysts & IT

Time

UnderstandHR Source

Build Report

Make DataAccessible

Rebuild DataWarehouse

Get SourceData

RequirementsDefinition

ReportRequest

Many, Sequential, Very Technical StepsA Long, Error-Prone Process

The Cognos Distinction

Provides Actionable Intelligence

Configurable Best Practices

Role based Analytics, Metrics and Reporting

Designed for HR, executives and line managers throughout the

organization

Adaptive Application Framework

Flexibility to change as business needs change

Reduces IT complexity

Reduces need for highly scarce IT resources and lengthy development initiatives

Immediate access to critical information, throughout the organization

In Closing…

- Jack Welch, Chairman & CEO, General Electric

“I Saw My Job As Allocating People And Dollars To Opportunities.

I Wasn’t Designing Products.

I Was Putting People Where I Thought They Were Right For The Job.

I Did That With My Partners in HR.”

Backup Slides

Anecdotes from the field

Industry slides – the ones from the field session

ROI / Case Study

Deeper dive

History of Cognos AA + Who is Cognos

Adaptive Applications PlatformTo Radically Change the Economics of Building, Maintaining

and extending Analytic Applications

Cognos 8 Analytic Applications

Cognos 8 BI Platform

Configurable Best-Practices Content

Business Pain Point Focused ApplicationsTargeted at All Levels of Management to Enable Breakthrough Performance

CustomerPerformance

OperationsPerformance

WorkforcePerformance

FinancialPerformance

Fin ServicesPerformance

ManufacturingPerformance

RetailPerformance

InsurancePerformance

Adaptive Applications Platform

Cognos 8 BI Platform

Configurable Best-Practices Content

Cognos 8 Analytic Applications Architecture

Scalable, Service Oriented Architecture Portal Services

Data Access Services

Security Services

Etc.

Adaptive Warehouse

Automates Creation of Management Information

Loads Data Warehouse

Manages Data Warehouse Tables

Source & Target Metadata Creation

Exposes Business View of Data

Adaptive Analytics

Configures & Delivers Management Information

Role-Based Information Needs Model

Rapid Iteration to Meet Changing Business Needs

NO Report Authoring

Delivered Anywhere in the Organization

Data In

Data Warehouse OutMetadata Out

Actionable InformationOut

Changing the Game for Analytic Applications

From To

Implementation Time Months Weeks

Skill-sets Required Many & Highly

Technical

Reduced Skill

Sets

Best-Practices Complex Coding Easy (Configure)

Meets Changing Needs No Yes

Upgradeable Difficult & Expensive Easy

Data Lineage / Auditable No Yes

Does HR Align with the Business?

32%40% 41%

76%

Use Now Use in the Future

"Do You Use Now - and Would You Like to Use in the Future - Proft per Employee as a Key Metric for HR Effectiveness?"

SVP & Below C-Level

Source: Veritude, 2005

Cognos Workforce Analytics Helps You Improve Profitability with Pre-packaged Workforce Management Provides Timely Insights to Assist Workforce Management and

Stem Employee Attrition

Pre-Packaged HR Information

Analytic Paths Support Best HR Practices

Supports Key HR Process

Acquire Deploy Optimize Retain

Which Skills Are Key?

Where is our Top Talent Located?

What is the Right Compensation for Open Positions?

Where do we Need to Hire to Meet the Corporate Goals?

How Do We Reward Top Performers?

Where Do We Have Excessive Sickness?

Are Employees Aligned to the Business Goals?

What Affects Performance of Top Performers?

Are Performance Reviews Timely?

How Many Employees Are Ready for Promotion?

How Many Employees were Promoted Last Year?

Where Do We Have High Turnover?

Which Separations are Avoidable?

Are We Motivating Top Performers?

Are Top Performers Leaving? Where? Why?

MEASURES MONITOR PLAN OUTCOMES With Supported Analysis By

Completion, attendance ratiosProgram, certification expensesActivity profitabilityPerformance outcome ratiosSatisfaction ratings...

Cognos 8 Workforce Analytics

ROI per employeeHeadcount costHeadcount variance Requisition fulfillment cycle timeTermination cost per employeeTermination costTurnover rate

Absence rateAccident rateExposure hoursAccept ratioAgency effectivenessCost to hireVacation days balanceVacation days entitlement

Performance review resultContribution factorMaintained qualification countReview resultScarcity levelSuccession percentageTraining % of revenue….

Company

Organization

Location

Responsibility Center

Job Position

Job Category

Vendor

Assignment

Salary Plan Grade Step

Calendar Month

Fiscal Period

Employee

Hiring Manager

HR agent

Annual compensationBenefit plan enrollment Compensation % increase Increase Variance]Customer service award varianceDependant countEmployee, Employer contributionEmployee opt out ratio Incentive awardHourly pay rate ….

Absence days countAccident Severity RateAccident Lost time Rate

High Performance ratioLow Performance ratioEmployee Development cost Development cost per employeeHigh Performance turnover rate

Incentive Pool varianceBenefit cost per employeeMerit Pool Varianceincrease variance count

termination rateFTE count Human capital ROITime to hireTurnover rate....

Headcount, Planning

Compensation & Salary Planning

Improve

Growth

and

Profitability

Headcount & Turnover

Compensation, Incentive

Performance, Succession

Recruiting , Absence & Accident Analysis

Learning Management

Benefits Planning

Restructuringplanning

Payroll & Reconciliation Analysis

Payroll Liability Planning

Recruitment Planning

Trained, certified headcountInvestment factorsTraining cost factorsRevenue/expense ratios

Key HR Challenge - Retention & Recruiting

0

10

20

30

40

50

60

70

Pe

rce

nta

ge

of

Re

sp

on

de

nts

IncreasingWorkforceDiversity

ManagingGlobal

Workforce

Retirement ofBaby

Boomers

Work/LifeBalance

Poor Skills ofNew Workers

Retention ofKey Talent

AttractingNew Talent

Source: Becoming a Magnet for Talent, Global Talent Pulse Survey Results 2005, Deloitte

Smart Retention is Driven by Insight

0

10

20

30

40

50

60

Pe

rce

nta

ge

of

Re

sp

on

de

nts

Segment Workforceby Performance

DifferentiatingRewards

Shift Rewards toVariable Costs

Deferring SalaryIncreases

Top 4 Tactics for Managing People Costs

Source: Towers Perrin, January 2004