Hi, in today's Bite you will learn
what business intelligence is
and how it is related to HR analytics.
If you're not familiar with the buzz words
business intelligence, also known as BI,
it is in fact, an umbrella term.
Business intelligence includes the application,
infrastructure, tools, and best practices
that enable access to, and analysis of information
to optimize decision-making and performance.
Organizational data is often stored in different,
separate systems which do not communicate with each other.
For example, it's easy to check who left your organization
and who is a high performer.
However, it's harder to check which high performers
left the organization in the past year,
as this requires combining data from two different systems.
In line with this, your sales data are usually not
combined with your inventory data or your site visitors.
However, tools combining these data can show you
which customers actually bought something,
which then entails the combination of site data
with sales data, or what items are about to be sold out
and should therefore be restocked,
which translates into combination of inventory
with sales data.
These are great examples of business intelligence tools.
Now how does BI apply to HR?
Similar to our sales example,
business intelligence can also be used for HR data.
Your Applicant Tracking System
and your Performance Management System
are usually not combined,
which prevents you from analyzing which hires perform best.
Business intelligence tools, however,
can help you combine these data,
after which it will be much easier
to perform the following three things.
First, aggregating data.
Most HR reporting consists of ad hoc reporting,
meaning that different extracts are manually combined.
Here, BI tools can facilitate data aggregation
and enable automated reporting.
Second, visualizing data.
Most HR systems are transactional systems
that generate transactional data.
Transaction data describe an event using a time dimension
and a value which refers to one or more objects.
For example, a candidate is hired on a certain date.
A few months later,
their contract is terminated on a certain date.
Both actions are recorded as separate entries,
or transactions in the system.
These systems are built to keep records,
as opposed to visualizing and reporting data.
Whereas, BI tools are really good at aggregating
these transactional data from multiple systems
and visualizing it.
Third, analyze data.
The final step is data analytics.
Keep in mind that BI tools are much better
at analyzing data than your average HR system.
Such examples are Power BI and SAS,
as they enable you to statistically analyze
large quantities of data.
As a bottom line, remember that BI tools are made
to aggregate, visualize, analyze, and report data.
And now let's have a look at some examples of BI tools.
A few of the best known BI tools in HR are Qlik,
Visier, Tableau, and Power BI.
Now let's have a quick look at each of them individually.
Visier brands itself as a workforce analytics solution
with a similar application.
It aggregates data from various systems
and helps in the analysis of this data.
Qlik and Tableau both brand themselves
as data visualization tools
that serves as connectors to all your information systems.
Microsft's Power BI will feel more natural
to analysts who are used to working in Excel
and is particularly useful when a lot of reporting
happens in Excel.
By the way, we included Power BI in our HR analyst's course,
and it's very easy to use.
If you're interested, check out the course
if you haven't already by clicking on the link
in the description.
Now that we have defined and exemplified
business intelligence and BI tools,
let's take a closer look into its relationship
with HR analytics.
A lot of the business intelligence tools
do what most people refer to as HR analytics.
However, in reality, this is not always true.
BI tools in HR are very good
at connecting different systems,
visualizing data, and assisting in reporting on these data.
However, these tools are not so good at performing
actual data analytics.
Instead, software packages that specialize in doing
these analytics, like SBSS and R, do this much better.
If you are interested to read more about these
and other tools, check our overview
of the top five HR analytics tools,
which you will find in the description of this video.
Technically, these tools could fit
into the business intelligence category.
They are, however, usually seen as stand-alone tools.
This is because the analytics process
requires a well-defined research question
that is specific to the organization's context,
culture, and data quirks.
This is very hard to automate in the BI system,
and that's why the real analyses in HR
are typically manually performed by data experts.
If you are interested to learn more
about BI and HR analytics,
remember to check out the links in the description.
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