The implementation of data processing systems for HR in the past has focused primarily on the acceleration, cost reduction, and automation of HR processes. Now HR executives and managers are turning their attention to the effective use of the enormous information potential springing up in enterprises. However, this information is spread across various business areas and disparate HR systems. The scope of reporting along with the need for cross-module/cross- system information that enables timely and accurate decision-making information has increased. SAP Business Information Warehouse (commonly known as BW) addresses this issue.

The emphasis in this article is on the use of BW as an analytical reporting tool. It is intended for project managers and functional project teams who are considering BW for HR and want to learn more about it. I’m going to present an overview of BW and then tell you about HR business content, with tips on when you should use it. In a subsequent article, I’ll provide some key lessons from the numerous HR implementations I’ve worked on.

What Is BW?

BW is an SAP-packaged business intelligence product centered around a data warehouse that is optimized for (but not limited to) the R/3 environment. It can extract data from custom-built applications, standard third-party packages, and the Internet, to name a few sources. BW is a combination of databases and database management tools used to support management decision making. BW supplies the infrastructure typical of data warehouses, but also includes preconfigured data extractors, analysis and report tools, and business process models.

The following are some of the functions BW performs:

• Retrieves and integrates detailed, summarized data from SAP R/3, non-R/3 systems, non-SAP systems (e.g., PeopleSoft and time recording systems such as Kronos), and external sources including databases, online services, and the Internet
  
  
• Stores data in one place to allow efficient retrieval of information, which in turn supports decision- making through concise reporting results
  
  
• Enables Online Analytical Processing (OLAP) — this processes information from large amounts of operative and historical data. OLAP technology enables multi-dimensional analyses from various business perspectives — for example, average headcount by quarter, average length of service, and cost and participation analysis according to benefit plans.
  
  
• Provides preconfigured information, roles, and objects known as business content

BW for Your HR Reporting Needs

Based on my experience with reporting at complex, global clients, I consider BW for HR the next wave of information dynamics. Most companies have implemented BW, but mainly for functions like finance and SD, to name a couple. As HR becomes an integral part of every organization and the demand for decision-making information increases, I expect BW to play an important role. Consider the following criteria when you evaluate whether BW is suited to your needs:

• Data integration: data needed from cross-functional R/3 and non-R/3 applications
  
  
• Performance in SAP HR: Due to heavy information access and requirements, performance is an issue in the SAP HR environment. Detailed transaction data (e.g., ad hoc queries or large reports) may cause performance issues as they produce a significant load on the R/3 system. By offloading such queries from a productive R/3 system to the BW system, you can improve overall system performance. The BW database design is specific for query processing.
  
  
• Access to data: Communicating accurate and timely data to the people involved in a decision-making process is an important aspect of reporting within HR, and of reporting in general. BW enables you to retrieve reports and key figures. (Key figures are quantifiable values used in analysis such as number of employees, age in years, and average salary.) This accelerates data access and ensures that all the people involved in making a decision are supplied with identical, timely, and accurate information.
  
  
• Excel and Web front-end: Data is available using Excel for non-portal users and is available via the Web for companies using a portal
  
  
• Integration with the portal: New releases of BW are integrated with the portal. Manager Self-Service (MSS 5.0 and above) comes delivered with BW for HR reports (HR Web cockpits) as part of the standard iViews. (iViews are small applications that provide role-specific contents. A large number of iViews access the most varied systems in your enterprise.)
  
  
• Multi-dimensional views: BW’s multi-dimensional views mean that a single HR query covers a variety of classic standard reports. For example, the average-headcount-by-quarter query indicates the headcounts for four quarters and calculates the average based on personal and organizational data. Alternatively, you can view the headcount in accordance with person-specific characteristics, such as gender, age, and ethnicity.
  
  
• Historical reporting: This type of reporting is becoming a prime reason for implementing BW for HR as it helps projects/implementations avoid converting a large amount of employee history into R/3 (e.g., useful when considering sunsetting your legacy systems or litigation reporting). This way you can also merge SAP and non-SAP data if, for example, if you want to report on SAP and PeopleSoft data. Many companies have different ERP systems across functions or different geographies. BW acts as a central repository for information analysis, pulling data from these different sources — for example, a net recruitment ratio report using industry HR benchmarks.
  
  
• Hierarchies: BW can display hierarchies that can be used as a basis for summarization and drill-down criteria. You can display the headcount for the entire enterprise and then drill down to organizational units with a further drill-down to an individual employee.
  
  
• Security: BW presents a layer of security and control over your HR data. An end user can only pull data based on his/her access and role (e.g., for headcount by organizational structure, the end user can only see organizations that he/she has access to). BW users in HR include management, heads of department, and the HR department itself. They also include related departments, such as controlling and administration, which often require the HR department to provide them with specific reports every month or calendar quarter. (Note: That type of security is also available in R/3 via structural authorizations.)
  
  
• HR business content: Business content is a set of preconfigured, best practice business objects that reduce the time and expense of BW implementations. Business content includes a wide range of roles, industries, and applications. It includes predefined queries and key figures and templates for frequently required standard calculations and comparisons. This makes it easy for companies to perform time series comparisons and to calculate averages for specific periods.

Business Content Functionality

BW delivers preconfigured objects under the collective term “business content.” These objects speed up the implementation as they deliver models for business information requests. Hierarchies are delivered in HR for the organizational structure, business event groups, and age structure, for example. Business content includes R/3 extractor programs, data sources, data targets, queries and workbooks, Web templates, roles, and Crystal reports.

Business content provides immediate access to interpreted information with ready-to-go business objects and data models. Business content is also validated and compared with a set of standard key performance indicators (KPIs) and best practice models from various installations across multiple industries. Predelivered business content provides the following functionality:

• Preconfigured set of solutions from roles to executable queries
  
  
• “Ready-to-go” OLAP prototype that provides information for key decisions on topics such as employee retention or benefit plan costs
  
  
• Stepping-stone environment for cultural change from traditional operational reporting to an information analysis environment
  
  
• “Gap” analysis environment for the end user to define and implement the business requirements. You can see what gaps exist based on your reporting requirements. For example, headcount comparisons over time require headcount by divisions, and division is not a data element delivered as part of the business content.

Under certain circumstances, standard business content is sufficient to meet your reporting needs, including the following:

• If you plan to use BW without specific adjustment, use the delivered objects by SAP as a foundation for your reporting and analysis — for example, if your R/3 implementation does not have much customization and the R/3 fields are used for what they are intended with no or minimal custom fields and custom infotypes.
  
  
• If you are not planning to integrate R/3 and non-R/3 data
  
  
• If you want to enhance the delivered business objects, use it to meet your reporting needs (e.g., for customizing the cost center field that could be of different lengths in different source systems).

Delivered BW for HR Queries

HR delivers business content that covers all HR sub-process areas (e.g., Personnel Administration, Organizational Management, Benefits, Payroll). It includes cross sub-process integration (e.g., a query across HR and Payroll data). Out-of-the-box business content can be used as is or it can serve as a template or example for customer-defined business content. HR business content is delivered with the following application areas/components (Release 3.1C):

• Personnel Administration (average headcount by quarter, percentage breakdown by employees, average length of service, average headcount FTE)
  
  
• Recruitment (average number of applications, average age of applicants, unsolicited applications rate, annual comparison of hires/offers/rejected)
  
  
• Organizational Management (percentage distribution of vacant positions, annual comparison of FTEs)

Table 1 is a quick snapshot of HR business content in each of the application areas listed above. See the sidebar, “Terminology Explained,” for more information on the categories shown in the table.

Rishi Agarwal

Rishi Agarwal leads the SAP HCM reporting and analytics team at IBM. He has significant international (US, Australia, and Europe) HR and BW implementation experience. Rishi’s experience includes 10 years of SAP HR experience, including five years of BW for HR experience at Global Fortune 100 companies.

You may contact the author at rishi.agarwal@us.ibm.com.

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