Intelligent Labor Planning with Power BI and Acterys

Summary

In this edition, we will be covering the following items:

1. The challenges and complexities of labor planning

2. The art of the possible with Power BI and Acterys for labor planning

Getting Granular With (One of) Your Most Important Expenses

For many companies, labor (payroll) is one of, if not the biggest, operating expenses on the P&L. Planning for labor expenses typically involves more variables and logic than almost any other expense. Generating robust and accurate plans for labor expenses is critical to any budgeting process and winning business teams invest their time accordingly. The challenge is that the organization needs a streamlined method to bake in all of the moving parts in a way that is structured enough to apply to the whole organization, but flexible enough to adjust for real-world complexity.

1. Labor Planning Comes with Many Moving Parts: Labor expenses can be comprised of salaries, hourly rates, bonuses, insurance, 401K matching, payroll taxes, state levies, pensions, stock-based compensation, commissions, and more. Different companies, departments, and business units have different pay cycles and policies. Factoring in the complexity in a streamlined, systematic way is critical to developing a first-class labor planning system.

2. Different Departments and Business Units Compensate Differently: Not only can organization-wide labor planning be complex, but planning done at the department and business unit level can use divergent methods that make consolidation and apples-to-apples comparison difficult. Managing and integrating these divergent methods across the organization can quickly become extremely challenging.

3. Complexity Leads to Confusion and Unhappy Status Quo: Because of the challenges we’ve just highlighted, many organizations find themselves trapped in an unhappy status quo, either leveraging extremely complex (impenetrable) spreadsheets or navigating inflexible legacy systems.

The Roadmap to Better Labor Planning with Power BI & Acterys

Creating intelligent, robust labor planning solutions in Power BI and Acterys is simpler than you might think. With the right tools in place, your organization can transform the way you budget for labor expenses:

1. Take An Inventory of Your Labor Expense Drivers: Spend time working with your business partners to understand what their labor expense drivers are. Look for similarities and differences across the organization to ensure you conduct a comprehensive audit. This will serve as your baseline to assess what complexity needs to accounted for and where there is opportunity for “structured flexibility”.

   1. Do you have hourly or salaried employees or both?

   2. Are they eligible for 401K matching or pensions? What percentage?

   3. Do your employees receive bonuses? Stock-based compensation? Commissions? What are the drivers for each

   4. What types of insurance benefits do your offer your employees? Is everyone eligible?

2. Look to Consolidate and Simplify Across the Organization: Once you’ve conducted an audit of the labor planning needs of your organization, you can distill your learning into the core functionalities that the business needs to implement to build a successful planning application. By balancing the needs of the broader organization, but including your diverse business partners in the conversation, you can secure stakeholder buy-in to create consolidated, centralized tooling that streamlines the process.

3. Build Configurable Planning Tools and Aggregate at the Organization Level: Leveraging Acterys’ configurable business logic, you can create powerful, flexible Power BI applications to manage every component of your labor planning needs, from salaries, to benefits, and beyond. Your team can create tools that adapt to flexible needs of your business partners, within the “guardrails” of the enterprise guidelines.

What Successful Labor Planning Apps Can Look Like

Working with your business partners and stakeholders to develop a clear vision of what labor planning can look like across the organization is critical to success. Working backwards from an understanding the capabilities you want your teams to have will give your organization a head start on your digital transformation journey.

1. The Organization Has Clear Procedures for Labor Planning: Teams across the organization leverage centralized tooling and common methodologies to plan OPEX. Budgets and forecasts ear easily consolidated and there are streamlined workflows and approvals, all built in Power BI.

2. The Leadership Team Has Direct Insight into Labor Expenses: Your leadership team can drill down into each department’s budgets, capture details with self-service analytics, and compare performance across teams and time periods.

3. Benchmarking Across the Organization Becomes Easier: With a clear view into expense data and budgets across the organization, leadership can set and measure efficiency goals and make informed decisions based on accurate data in a centralized reporting and planning tool.

4. Cross-Functional Integrations Become Possible: Starting from this foundation, your team can expand and integrate solutions across the organization. Your labor planning dashboards can integrate data from other HR-related systems to create a unified source of truth:

   1. Integrate HRIS data and dashboards to track roles from “budgeted” to filled

   2. Integrate your payroll provider data to compute payroll variance vs. budget or forecast

In the Next Newsletter

We will learn about driver-based revenue planning and how to build business logic into planning solutions that reflect your business model.