Organizational planning and analysis, or OP&A, is a new forward-looking approach that enhances organizational design and can help you achieve the business outcomes you care about most: revenue, growth, and cost reduction. OP&A connects roles and work to capabilities and business strategy, so you can close the gaps and make informed, data-driven choices.
What OP&A is and what it isn’t
So, let’s look at what OP&A is and what it isn’t. OP&A isn’t concerned with transactional HR processes. It doesn’t look after talent acquisition, employee engagement, or payroll and benefits. This belongs to HR Operations.
OP&A is about strategic planning that prepares the organization for the future. It’s the equivalent of Financial Planning and Analysis (FP&A) and comprises a range of capabilities that boost the organization’s operational and financial performance, spanning:
- Organizational design
- Workforce visualization and analysis
- Scenario modeling and transition management
- Activity-based costing and management
- Future talent planning (succession planning)
OP&A is heavily data-driven but it won’t work with HR data alone. Until you can source and integrate data and knowledge from across the business, you can’t really begin. So, this is your most foundational step, and it can be easy and painless to solve using software designed to automate data aggregation from any source.
Stages on the journey to OP&A
So, how do you begin building an OP&A function? Well, we believe there are five stages that broadly map to the maturity of an organization’s planning capability, beginning with operational support through to data-driven organizational design:
- Most organizations start by using people analytics to support operational decision-making and to produce simple organizational visualizations, commonly using manual tools for planning and modeling. However, this approach is time consuming and limited in capability.
- From here, you move to people analytics and basic workforce planning that combines datasets for a better understanding of organizational structure. Data visualization is improved but modeling is still manual and prone to errors.
- Organizational design using activity analysis for improved workforce planning and modeling is supported by predictive insights and manual forecasting. At this stage, data collection and aggregation may be automated but systems still operate separately.
- Scenario modeling and dynamic data visualizations improve information accuracy and tracking of organizational changes. Processes for forward planning and proactive risk management are standardised and collaboration across departments becomes routine.
- In the final stage of maturity, organizational design is fully data-driven and highly integrated with the operating plan. Detailed visualizations reflect an advanced modeling approach that supports strategic decision making. Data collection and aggregation is automated, planning systems are connected, and monitoring is continuous.
To summarize this journey to maturity, the foundational stages strengthen and speed up the basic analysis and planning processes. As the function matures, you begin to look at organizational design, workforce modeling, and transition management. At the advanced stage, capability becomes strategic and focused on forward-looking organizational design, assessing the gap between actual work and target activities, competencies, and objectives for a future-ready business.
Getting started with five steps to building a foundation
Now that you know where you’re heading, what are the early steps you can take to begin building a foundation for OP&A? As you will see, they’re an interesting mix of data, analytics, cultural change, and technology.
It’s worth saying at this point that human capital management systems of record are good for operational HR but not for planning and forecasting or monitoring your organization. These systems can’t import sales or productivity data, and they can’t analyze work being done in the organization. You need technology that’s built for analytics and modeling, built to be forward-looking:
- Start with a small, multi-skilled team of more than HR people– bring in colleagues and associates from across the business to address skills gaps in capability.
- Take a collaborative approach to OP&A and work together with Finance. Consider dual reporting lines that will share responsibility across both functions and build cultural norms.
- Put analytics at the heart of OP&A. Unless it’s data-driven with proven methodologies and is outcomes-led, OP&A won’t deliver on its promise of forward-looking organizational design.
- Use purpose-built platforms for the analysis and modeling of data from multiple sources. There’s no single system that can do it all, despite some industry claims.
- Assign sufficient budget to OP&A to allow continuous monitoring of organizational health. Finance allocates 25% of its budget to FP&A, whereas HR puts 12% or less aside for planning.
If you introduce these steps, you’ll begin to see organizational design differently and your business will pull ahead of the competition. OP&A makes up less than 2% of the HR function today, so there’s ample opportunity. You can’t know for sure what’s around the corner, but you can plan for change, be ready for it, and move quickly when it happens.
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