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Perspective, Part II Picking the Numbers to Crunch What gets measured gets managed, so pick your measurement targets carefully. By Patricia Taylor HR outsourcing and technology, as noted in the first installment in this series, have fragmented during the past several years. They now comprise a maze of models, services, and software. And those are frequently disconnected, contradictory, and focussed on stakeholders who can be very distant from the real issues facing current and future business leaders and their workforces. Most HR outsourcers and technology providers focus on numbers that show efficiency, return on investment, and the cost versus the benefit of their offerings when compared to each other. They gauge the following: • How quickly a candidate can be processed; • The number of people it takes to manage a payroll process; • The total cost of ownership for a given software versus software-as- a-service (SaaS); and • How many features and what functionality is gained by an investment. These numbers drive decisions shepherded by procurement, advised by consultants, approved by boards, and then recorded and counted (if you are lucky) to ensure they are realised. The big question is—so what? If the overall impact on the bottom line of the business is to save .05 per cent of the total cost of operations, "streamline" your processes, or let managers see the holiday schedule of their direct reports, is that really going to rock the results of the enterprise? Remember when the "balanced business scorecard" was introduced? I'm old enough to have participated in the raging debates about whether it was wise to allow all employees to see the financial budgets, targets, goals, and progress against those on a regular and transparent basis. Risks of misinterpretation or leaks to competition were weighed against the benefits of trust, mutual accountability for results, and alignment to common goals. In some cases, finance and accounting learned to communicate the numbers in a way that were relative to an employee's everyday contribution and were lucky enough to have access to accurate and reliable information they were comfortable distributing. And the scorecard experiment worked. It motivated the workforce, created trust in management, and concentrated the effort (and cost) of human resources (in the literal sense of the term, not departmental) on delivering results that equaled business success. Everyone knew, agreed, measured and worked towards the same definition of good. Now apply this concept to the numbers that [46] HRO TODAY GLOBAL | FALL 2012 matter about the contribution of the workforce to the growth and bottom line of a business. Those are the "HR" numbers that matter, and those are the numbers that HR outsourcers, technology, and service operations should drive, support, enable, and bring to the fore. The recently published survey by the Economist Intelligence Unit on behalf of the Chartered Global Management Accountant programme (CGMA) found that 43 per cent of senior executives who took part in the survey believe failure to achieve financial goals was due to inadequate human capital management. As many as 86 per cent of chief executives are not confident about the metrics available relating to human capital, and 83 per cent of chief financial officers said that the information they need for human capital management is too difficult to obtain. Maybe in response to this frustration, we should all reevaluate HR service and software and specific HR functions based on their ability to create a joined up picture of the workforce and help account for its impact on the success of the business. And, if the fragments and models and software or functions or projects don't help in this accounting, and if they don't speak in numbers that help us understand and map our progress against an agreed and measurable definition of good, then maybe we can do without them. Decide on a small number of outcome measures that make sense to most managers, employees, and number crunchers. Target your efforts on making sure you can get reliable and regular data, and present it as it changes in a variety of mediums based on individual comfort levels—pictures, words, numbers. Then, put everything else on hold. I once worked for a boss whose mantra was, "Take it away and see what breaks." Ask yourself what you would take away first. Then, go ask an accountant, finance director, or CEO. Once you agree on the few important components to keep, the rest become immaterial. Take away projects and processes, services and software that don't contribute to those few components. Challenging times call for bold measures. Go a-counting with me. Patricia Taylor is an expert in future oriented services in talent management and HR outsourcing. This is her second of three articles tracing the evolution of HRO. She can be reached at taylor.patricia@btinternet.com.