An Emerging Trend For HR’s Data: Analytics-as-a-Service

The current trend is for companies to build in-house departments staffed with data scientists to do advanced analytics. However, this is probably only an option for large, sophisticated firms. [clickToTweet tweet=”Analytics-as-a-service is the new trend in HR data.” quote=”Luckily an option is emerging which we might call “analytics-as-a-service,” where vendors and consultants provide analytics horsepower on demand.”]

It’s not news that companies might go to a consultant for help with analytics, what is really interesting is how technology vendors are being drawn into this space.

Visier’s core business is software that helps HR dig through its data to answer questions and make smarter decisions. Yet, in providing that software, and enhancing that software, Visier invariably gets pulled into providing more and more advanced analytics as part of the package. For example, as well as the usual sort of reporting on turnover, they have a “predictive analytics” algorithm for identifying people at high risk of leaving. You could build this kind of algorithm yourself, but what are the chances it will be significantly better than the off-the-shelf one developed by Visier?

Another company getting pulled into analytics-as-a-service is Kronos Inc. Kronos is famous for its time clocks, but in fact provides a sophisticated workforce management solution, and in managing the HR transactions of the hourly workforce it ends up with an impressive pile of data. Kronos is better positioned to develop the tools to analyze this data than most of their clients; and it’s a small step from having developed the tools to providing support to clients using those tools. A client might use Kronos’ analytical tools to understand their workforce, but they might be tempted to simply ask Kronos to “tell us what it means.”

Vendors have the data

In fact, for advanced analytics, the technology vendors have an advantage over even big companies and clever consultants — lots of data. In these days of cloud computing, vendors can potentially aggregate the data of all their clients creating a big enough data set to do really good analytics. Vendors may well have one or two or three orders of magnitude more data than you do.

I think it’s likely that the technology vendors will get more and more deeply involved in analytics-as-a-service, not just providing software, but mining their vast databases to gather insights and develop analytics skills faster than in-house analytics departments can.

For many firms it will be a relief not to have in-house data scientist to house, feed and manage. We’ll be able to rent the analytics we need.

Note to my readers: I’m always interested in new developments and startups as signals as to where HR and HR tech is heading. My mentioning any vendor by name is not an endorsement.