Hackett: Talent management boosts bottom-line results

17 December 2011 Consultancy.uk

Companies with more mature Talent Management capabilities reap strong bottom-line benefits, including earnings that are 18 percent higher than typical competitors. Research from The Hackett Group finds that the improved performance on talent management enables companies to generate millions in additional EBITDA earnings. The study, which examined the performance at more than 60 companies over a three-year period, found that in addition to higher earnings, leaders saw significantly improved net profit margin and greater return on equity and assets.

Companies with a mature talent management organization outperformed typical companies across an array of efficiency and effectiveness metrics. Leaders showed superior ability to increase overall employee engagement, faster recruiting cycle time, and greater linkage of talent management to business strategy. Their talent management professionals were also significantly more productive than those at typical companies.

The Hackett Group Reshoring

Achieving more mature talent management

Talent management leaders achieved impressive results by creating an integrated set of talent management capabilities aligned with their business and talent strategies. They more carefully cultivate the appropriate organization and culture, focusing on people-management skills of managers and supervisors and employee engagement, the research found. They have a greater focus on improving the processes by which talent needs are identified and appropriate individual staff are acquired, developed, managed, and measured. Finally, leaders are more advanced at measurement and make more effective use of technology to enhance talent management processes and activities. While they don't necessarily spend more, they more effectively rely on technology to enable information access, track talent management development, and enable improved decision-making.

"By ignoring the strategic value of talent management and failing to develop a comprehensive program that drives top performance in this area, companies are missing the opportunity for a triple payoff - an enhanced bottom line, better performance across the enterprise, and improvements in specific talent management processes." said Hackett HR Advisory Practice Leader Stephen Joyce.

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Utility firms to invest in Asset Performance Management technology

11 March 2019 Consultancy.uk

By implementing innovative Asset Performance Management systems, utilities firms can maximise their utilisation of assets and minimise maintenance costs across their portfolio, according to Louis Morgan of Smart Grid Forums. However, the large cost of solutions provided by vendors means that many firms remain reluctant to take the perceived gamble on the technology, and risk missing out on its early benefits.

As digitalisation becomes paramount for companies looking to make the most of their investment strategies in all sectors, smart asset management presents a major opportunity to professionals across the business spectrum. In this context, a new event hosted in London is looking to help smart-grid asset management professionals meet the needs of a changing energy industry with digital asset management. The first annual Grid Asset Management event is due to take place between the 14-16th of May 2019 at the Millennium Hotel in Knightsbridge, London.

The conference will bring together leaders and experts from across Europe, in order to benchmark their digitalisation roadmaps. In a piece posted on the Smart Grid Forums website ahead of the event, Louis Morgan, a Conference Producer at Smart Grid Forums, has outlined the importance of investing in next-generation asset performance technology for utilities firms looking to make the most of their assets in the future.Utilities firms to invest in Asset Performance Management technology

According to Morgan, utilities firms must now prioritise their investments based on asset health and not age – something that can yield major opportunities – but gauging an asset’s health accurately has historically been a complicated task, “drawing on varied data from disparate sources and incorporating it into complex analytical models.” Now though, this process is becoming more simple through the use of “Asset Performance Management” (APM) systems.

Morgan explained, “These comprehensive platforms aim to provide holistic decision support to the asset manager, leveraging advanced analytics to optimise asset performance, strategy and risk management across fleets in real-time, truly facilitating the move from preventative and corrective maintenance to condition-based predictive maintenance.”

However, while the potential of leveraging such technology could be a game changer for asset management in the utilities sector, the costs of software implementation have made the majority hesitant to take the plunge. Indeed, many industries have been slow to adapt to digital trends in their sector, often put off by the short-term cost of changes amid an uncertain global economy. However, this attitude ignores the long-term benefits firms could be benefitting from as a result, something which will see competitors who adapt first building an almost unassailable lead on their rivals. 

Savings opportunity

Morgan expanded, “Based on our research, utilities still feel very much in the dark about the true savings they will realise from implementing these systems. Many of the tangible benefits are obvious – better management of asset health will benefit the business in a variety of ways – but without an accurate idea of the added benefits of rolling out a comprehensive, enterprise-wide system it’s difficult for utilities to invest the significant capital and labour required to do so. Many of the companies we spoke to feel that the case-studies and examples shown to them thus far tend to focus on one asset class, or a single factory, and don’t demonstrate the capabilities of these systems in managing multiple fleets of diverse assets in a smart grid utility context.”

In the case of APM, Morgan admitted that there was at least a low-cost alternative which some firms are turning to, rather than completely missing out. He elaborated, “The open-source approach, whereby asset health is determined using ad-hoc in-house applications written in freely available programming languages such as Python or R, has its benefits. By relying on in-house capabilities, utilities are compelled to develop IT, software development and data science skills... Similarly, open-source applications can be tailored very closely to the needs of an organisation and its assets.”

However, this approach comes with its own suite of risks and challenges. Most problematically, Morgan said that it remains difficult to obtain a holistic view of an organisation’s asset portfolio using this approach. As a result, different applications often overlap in scope, and can supply conflicting solutions to the same problem. The subsequent confusion can serve to reinforce pre-existing silos within the business, something which means that many firms may still have to invest in the APM platforms of vendors in the short to mid-term anyway.

“From speaking with a cross-section of European smart grid utilities, it would seem that the vendor’s position mostly holds true,” Morgan added. “Many, if not all utilities are currently in the process of assessing vendors’ offerings in this space. The market represents an interesting microcosm of the IT/OT convergence, with traditional hardware suppliers such as GE, ABB and Siemens promoting their offerings on the basis of their expertise with the assets, while IT specialists such as IBM and Oracle refer to their years of experience and success implementing enterprise IT solutions across the globe.”

Morgan explained that while utilities actively search for ways to level-up their asset health management, there is an enormous opportunity in the space. “By implementing these systems,” he concluded, “utilities can intelligently reduce outages, maximise utilisation of assets and minimise maintenance costs across their portfolio, while vendors can share in a market that is set to grow by more than a billion dollars in just the next few years. But which vendors gain the most from the burgeoning market is yet to be seen, and their focus over the next 12 months is convincing utilities that their solution is not only viable, but the best-in-class.”