HR controlling and the role of SAP Analytics Cloud in HR management

In Part 1 of this two-part blog series, we will deep-dive into what HR controlling is and why SAP Analytics Cloud is crucial here. Part 2 will focus on strategic HR controlling and how SAP Analytics Cloud offers a clear advantage for strategic HR decision-making.

HR controlling encompasses far more than just managing employee data or tracking absences. It involves the analysis and management of personnel costs, resource planning, and the identification and management of risks. Effective HR controlling creates transparency by enabling companies to make informed decisions and plan and utilize personnel resources strategically. The interplay between strategic and operational HR controlling plays a crucial role, as both approaches pursue different but complementary goals. With the SAP Analytics Cloud (SAC), companies have access to a modern solution specifically designed to support and enhance data-driven decision-making in the field of HR controlling.

Challenges of HR controlling

The challenges of HR controlling are diverse and affect various aspects of human resource management. Some of them are listed below:

• Erroneous or incorrect data: One of the fundamental challenges is data quality. Often, personnel data is scattered across different systems, incomplete, or inconsistent. This leads to a high risk of errors, as inadequate or incorrect data can result in poor decisions, as well as a significant manual effort required for data consolidation and cleansing.
• Managing costs: Another central issue is cost management. Personnel costs are one of the largest expenditure items in many companies. An inaccurate or incomplete overview of personnel costs can lead to unnecessary expenditures and budget overruns. In many cases, there is a lack of a clear overview of personnel costs and their drivers, making planning and control challenging.
• Managing risks: Additionally, many companies lack effective personnel risk management. The absence of clear mechanisms for early warning of personnel risks, such as high turnover or impending skills shortages, can jeopardize the stability of a company. Risks like personnel absences or the loss of key employees are just a few of the challenges that should be monitored through targeted risk management.

Implementing both operational and strategic HR controlling enables companies to promote both operational efficiency and strategic foresight.

By working on both these approaches in parallel, organizations can respond quickly to current challenges while pursuing long-term goals. The operational focus can optimize short-term processes and use resources efficiently. In contrast, the strategic perspective ensures that the company proactively responds to market changes and prepares for future developments. This minimizes risks and optimizes opportunities, strengthening competitiveness and fostering an agile, adaptable corporate culture.

The difference between strategic and operational HR controlling

Understanding the difference between strategic and operational HR controlling is fundamental to grasping HR management processes within a company. While both approaches fulfill essential functions, they pursue different goals, perspectives, and timeframes.

Operational HR controlling

Operational HR controlling focuses on short-term aspects of HR management. It aims to efficiently manage daily operations and optimally utilize existing resources. In this context, reporting plays a central role by capturing and analyzing current key figures such as working hours, attendance, and personnel costs. Reports are often standardized, providing a snapshot of the current personnel situation, allowing for quick decisions to optimize ongoing operations. The focus is on responding to immediate challenges and ensuring smooth day-to-day operations.

Strategic HR controlling

In contrast, strategic HR controlling takes a long-term approach. It aims to align the company's HR strategy with overarching business goals. Reporting in this area is more comprehensive, analyzing not only current data but also trends and forecasts to identify future personnel needs. It incorporates qualitative information, such as employee satisfaction and talent development, to enable proactive decisions that ensure the company's long-term competitiveness. Strategic reporting utilizes advanced analytical tools and dashboards that provide detailed visualizations of performance and help develop strategic measures.

Another significant difference lies in the time horizon of the two approaches. While operational HR controlling focuses on short-term goals and immediate outcomes, strategic HR controlling considers the long-term impact of decisions and plans accordingly. Decisions in the operational area are often reactive, whereas they are proactive and future-oriented in the strategic context.

The synergy between operational and strategic HR controlling

The transition between operational and strategic HR controlling is crucial to understanding the synergy between the two approaches. Insights from operational controlling, such as attendance and personnel cost data, provide valuable information for strategic planning.

To maximize the efficiency and effectiveness of strategic HR controlling, it is essential that reporting, personnel planning, personnel risk management, and monitoring are closely interlinked. These areas should not be viewed in isolation but rather complement and support one another. Thus, data and analyses from operational HR controlling feed into strategic decisions, supporting the company's proactive alignment. SAP Analytics Cloud provides a central platform that allows linking both operational and strategic data, offering a comprehensive view of personnel management.

Economic and strategic opportunities in HR controlling

Effective HR controlling not only allows companies to optimize internal processes but also opens up significant economic and strategic opportunities. By implementing a robust HR controlling system, companies can better understand and manage their cost structure, leading to sustainable efficiency gains.

Cost and resource efficiency

A primary goal of HR controlling is to optimize personnel costs. Since personnel costs represent one of the largest expenditure items for many companies, precise analysis of these costs is essential. With modern analytical tools like the SAP Analytics Cloud, companies can gain a detailed overview of their personnel cost structure. This enables them to identify inefficient expenditure and take targeted measures to reduce costs.

By detecting trends and patterns in personnel data early, companies can respond better to changes and avoid unnecessary expenditures. Additionally, effective HR controlling improves resource allocation by enabling companies to deploy personnel resources where they are most needed. This optimization not only leads to cost savings but also promotes a more efficient utilization of the available talent and skills within the company.

Strategic decision-making

A strategic approach to HR controlling helps in better tracking long-term goals and supports the overall corporate strategy. Through comprehensive data analysis, companies can anticipate future personnel needs and take targeted measures for employee development and retention.

Proactive planning and an understanding of market trends allow companies to adapt early to changes and secure competitive advantages. Companies that closely align their HR strategy with overarching business objectives can make strategic decisions based on not only short-term results but also long-term competitiveness.

SAP Analytics Cloud: The perfect tool for HR analyses

SAP Analytics Cloud offers numerous features that are particularly advantageous for HR controlling. Among other things, it enables real-time analysis and clear visualization of HR data. These real-time analyses make it easier for HR managers to identify trends early and take appropriate action. Furthermore, the platform supports integrated planning and forecasting. Based on historical data and future trends, companies can more efficiently plan personnel resources and cost forecasts, leading to better resource utilization and targeted budgeting.

Another advantage of the SAP Analytics Cloud lies in cost transparency and optimization. By linking various data sources, from salary costs to absenteeism rates, companies gain a comprehensive overview of their personnel cost structure. This facilitates the identification of savings potential and enables targeted cost-reduction measures. Using predictive analytics supported by machine learning, future developments in the personnel area can be accurately predicted, allowing for proactive responses to potential bottlenecks.

The introduction of SAP BW (Business Warehouse) also offers companies a future-oriented solution for optimizing data analysis. SAP BW allows for the consolidation, modeling, and integration of historical and current data from various systems, creating a central source of information. Moreover, it allows for the evaluation of not only HR data but also financial data and information from other business areas. Additionally, non-SAP data sources can be included in the analysis, ensuring a comprehensive and holistic view of company data. This central data integration facilitates the creation of meaningful reports and dashboards that support informed decision-making and help effectively implement strategic measures.

Nagarro as the ideal partner for strategic HR controlling

The SAP Analytics Cloud provides companies with powerful tools to elevate their HR controlling to a new level. Implementing and utilizing the SAP Analytics Cloud requires specific expertise and a well-thought-out strategy to harness the full potential of the solution. As an experienced partner in the SAP and HR analysis fields, Nagarro assists companies in developing tailored solutions and optimally utilizing the SAP Analytics Cloud. From real-time analyses to precise forecasts, it enables informed decision-making and helps reduce personnel costs while managing personnel resources more efficiently. Together, we ensure that your HR analysis with the SAP Analytics Cloud functions optimally and you are able to fully leverage strategic advantages.

Through our expertise, we help you integrate the right data sources, create customized dashboards, and use predictive models tailored specifically to your HR strategy.

With Nagarro by your side, you benefit from a seamless implementation and ongoing support to keep your HR controlling up to date.

Conclusion

The SAP Analytics Cloud offers companies powerful tools to elevate their HR controlling to a new level. From real-time analyses to precise forecasts, it enables informed decision-making and helps reduce personnel costs while managing personnel resources more efficiently.

Nagarro is the ideal partner to accompany you on this journey. Together, we ensure that your HR analysis with the SAP Analytics Cloud functions optimally and that you can fully leverage strategic advantages for long-term success and a strong competitive position.