Today’s economy has finance professionals and CFOs in organisations large and small focused on efficiencies and costs. When revenue growth flattens or even declines, profit maintenance and increases must come from cost efficiencies. In most organisations, including large organisations such as the Fortune 500™, total human capital cost, also known as total cost of workforce, average nearly 70% of operating expenses (for source and definitions, see notes one and two below). While an organisation’s total cost of workforce percentage may vary, with few exceptions these costs remain the single biggest organisational expense. Given their fluid and rapidly changing nature, workforce costs are extremely difficult costs to manage and control, however organisational charts provide a surprisingly simple solution to the challenge.

Effectively controlling or managing the total cost of workforce often proves difficult because the tools for the job – budgets or approval processes when growing or layoffs when times are tough – lack the up-to-the-minute flexibility or detailed insight that companies need. Simply put, organisations lack tools with which to surgically manage, tune or optimise their workforce.

The net result is often a general inability to effectively control and manage workforce costs during growth periods. Over time, costs get out of control and management is forced to turn to their last (and not particularly attractive) line of defense – directives such as “hiring freeze”, “reduction in force” or “layoff.” The problem with layoffs it that is they are both expensive in the short term (termination costs), and potentially even more expensive in the long term if either the wrong amount of labor is cut or the wrong positions or individuals are cut.

Simply put, organisations lack tools with which to surgically manage, tune or optimise their workforce.

What seems missing from this picture is the capability of top management, finance and HR to systematically assess and surgically implement workforce cost management practices at a level below the company-wide mandate but above the individual manager level. If there were a simple way to review, evaluate and adjust workforce headcount and cost information frequently or on a near real-time basis, perhaps finance and HR could truly control workforce costs.

While there is justifiable reluctance to add yet another tool to the organisation, what if it were possible to use or expand the use of an existing tool that every organisation already has and which is specifically created to focus on and clearly illuminate workforce issues.

Organisation charts have aggregated headcount and clearly illustrated the formal supervisory structure for decades, but today’s digital technology means they can also be utilised to aggregate workforce costs and other metrics as well. With a new window into detailed workforce costs – finer than the traditional department/cost center structure – HR and finance can work together to analyse costs and proactively identify solutions to issues organisations face.

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Introduction

When we think of organisation charts, the delivery of analytical and metric information is not the first thing that comes to mind. Instead, we think of one or two page hierarchical charts used to view the reporting structure of a department or two. Usually these charts are in PowerPoint, Visio or similar format. By centralising such information and combining hierarchical data from all departments, many HR and HRIS practitioners are finding that centralised, Web-based organisation charts can deliver value far exceeding traditional expectations.

Many workforce analytics and scorecard systems can cost well in excess of US$4 million and take longer than 18 months to implement. Even with this investment, organisations are frequently left with unfulfilled expectations. For a modest amount of this cost, organisations can achieve a generous percentage of the original goals established for many workforce analytics and scorecard systems. By using a centralised, Web-based organisation charting platform as both a user interface and secure delivery vehicle, they can accomplish many key goals without such an elaborate investment.

The same charts used to visualise supervisory reporting structures at a departmental level can become a convenient launch platform for the delivery of many functions. These include simple reporting, critical data visualisation, organisational modeling, data validation and much more. Many enterprises are finding that Web-based organisation charts provide an effective platform for the delivery and visualisation of analytical data, metrics and organisational information in all forms.

As the structure of the global economy continues to take hold, the sheer complexity of the modern enterprise presents serious management challenges. In order to remain competitive in this environment, an unprecedented level of accuracy is required for a large variety of organisational information. There is no better way to correct inaccuracies than to conveniently and securely expose them to the people with a vested interest in their correction.

Using the unique features of centralised Web-based organisation charting, information can be easily and securely accessed by anyone in the enterprise via the use of just a Web browser and a click on a standard URL Web link. Further, by creating a single centralised platform for enterprise-level organisational charts, implementers create an unprecedented environment for growth, visualisation and accuracy. This strengthens an organisation’s ability to remain competitive in the economic environment of today and beyond.

We do not have to look far to see why this concept works so well. Most often HR analytics and metrics provide information about two things — individuals and organisations. Even when metrics are about individuals, they are best viewed in comparison to an individual’s peers. Additionally, there is not a better place to view organisational metrics than in context with the organisational hierarchy. This natural interface entices even the shortest executive attention span to take a closer look to visualise with a level of accuracy not possible with less intuitive interfaces.

Let’s look at a few simple examples…

OrgPlus voted Best HR Product 2008

HumanConcepts’ OrgPlus Enterprise Blueprint Collaborative Workforce Planning Solution Selected for Coveted Award by Human Resources Industry Experts

HumanConcepts today announced that OrgPlus Enterprise Blueprint, its new Web 2.0, collaborative workforce planning solution for HR professionals and line managers, has been named as one of the “Top 10 HR Products of the Year” by Human Resource Executive® magazine. OrgPlus Enterprise Blueprint is recognised for ease-of-use, innovation and value because it enables HR professionals to proactively model the impact of workforce change spurred by transitions, growth, reorganisations or company mergers.

“Human Resource Executive® has been evaluating HR products and conducting this competition for 20 years,” explained David Shadovitz, editor in chief of Human Resource Executive magazine. “Our goal has always been to identify products and services that clearly offer value to the HR community while demonstrating innovation. With OrgPlus Enterprise Blueprint, we were impressed how the solution easily creates “what if” scenarios to model workforce changes with others in a Web 2.0 environment.”

“We selected HumanConcepts’ OrgPlus Enterprise Blueprint to give us visibility into the impact of workforce changes as we entered into the reorganisation and merger phases of two large departments at the university,” commented Ana Zavaleta, HRIS Manager, University of Southern California. “The solution enabled us to model scenarios and gain clarity into our best options before embarking on significant changes, which saved us time and money and smoothed the entire reorg process.”

“We are excited about receiving this prestigious award from Human Resource Executive magazine,” said Martin Sacks, CEO, HumanConcepts. “The award affirms our vision behind OrgPlus Enterprise Blueprint. Our customers need a way to easily plan and collaborate around workforce changes, to do compensation planning, and to efficiently share results. OrgPlus Enterprise Blueprint drastically reduces the time it takes for our customers to plan, reorganise or to merge organisations, enabling them to quickly realise the business benefits resulting from change.”

The HR Executive award