BI/Analytics Center of Excellence (CoE)
Competency Centers, Centers of excellence (CoE) or Shared Services models are structures to enable the corporate or strategic vision to create an enterprise that uses data and analytics for business value.
BI CoE is an organizing mechanism to align People, Process, Technology and Culture. The target benefits include:
- Better collaboration between Business and IT
- Increased adoption and use of BI and Analytics in the lines of business.
- Better data management, quality and reporting
- Cost savings from eliminating redundant functions
The goal for every World-class BI CoE — enable the right combination of toolset, dataset, skillset and mindset for better, faster, cheaper and more repeatable analytics?
BI Shift: Moving from Department Focus to Enterprise
As BI moves from departmental focus to enterprise level, the BI CoE structurally can take four different models depending on reporting structure. They can be part of an IT unit reporting to the CIO. They can be a functional shared services model. They can be part of the corporate shared services model that is leveraged b y all divisions. Where it reports does matter in terms of influence and scope.
Center of Excellence also make sense in environments where BI is moving from a departmental project focus to a strategic program focus. A tactical “Project” focus has these characteristics…..
- Start & end date with narrow problem or department scope/focus
- Sub-optimal organization and use of skills
- Information & decision latency inadequately addressed
A more strategic “Program” focus has these characteristics….
- Whole-process view; Promoting collaboration and analytic best practices
- Data and analytics managed as strategic assets (shared services)
- Business and IT share ownership of the information environment
- A central point for developing and evolving the analytical infrastructure
If you have a charter to facilitate and promote BI and analytics to achieve business objectives across functional and geographic areas then the CoE model is the right one for you.
Centers of excellence, especially when applied to BI, analytics, performance management processes, can help to address the pain of fast-moving technology, time-to-market compression, and marketplace dynamics that grow more complex by the day.
BI CoE’s are often referred to as BI Shared Services or BI Competency Center.
Managing the Complex Information Stack
The biggest challenge facing corporations is the explosion of data and tools (see figure outlining the BI stack on the right). The complexity of the information management stack is mind boggling. The need to simplify, consolidate and leverage is often a core driver for establishing a BI CoE. The opportunity is in helping different business units and functions capture, analyze and manage all that data and disparate technology tools/platforms.
The “Raw Data -> Aggregated Data -> Contextual Intelligence -> Analytical Insights -> Decisions” is a differentiating causal chain separating winners from the rest today. Bringing consistency, repeatability, reuse and process to this information supply chain requires discipline.
As companies have become more global and complex – and simultaneously more integrated – the need for cross-collaboration and more leverage of available resources via a shared services model has become a priority.
That is the reason why best-in-class firms are implementing BI Center of Excellence (CoE) (also called BI Shared Services or BI Competency Centers) for better leverage of investments in people, process and tools/applications.
Defining a BI CoE
A BI CoE is a cross-functional shared services structure for supporting the effective implementation of BI, Performance Management, Information Management and Analytics across an organization.
Most organizations have a mix of BI platforms today. They can be departmental silos, some integrated platforms and some that have a next generation “data-as-a-service” enabling model. A BI CoE must eventually support all of these models as legacy, current and new all have to be managed.
The objective of establishing BI CoE’s is to create economies of scale by pooling and sharing expertise, people, process and tools/applications rather than letting it become dedicated (or trapped) in departmental, Line of Business (LoB) or functional silos.
The BI CoE defines the structure — roles, responsibilities and processes – and resource mix – onshore or offshore, analysts to administrators — that enable the better execution of enterprise wide projects (especially in global, multi-LoB or matrix organization models). The shared services model is becoming pretty common in public and private sector IT for a variety of apps and infrastructure programs – centralized e-mail; data centers, SAP CoE, Oracle CoE etc.
An analytics CoE builds on the BI platform and provides an integrated environment for predictive and descriptive modeling, data mining, text analytics, model management, forecasting, optimization, simulation, experimental design and more.
The concept of a BI CoE is not new. As early as 2001, Gartner wrote that companies need a BI Competency Center approach (BICC) to develop and focus resources to be successful. Since then, the BICC concept has evolved through various implementations.
What does a BI CoE Actually do?
A BI CoE has responsibility for the program and portfolio governance, projects, vendor management, practices, software, architecture, infrastructure, and software licenses. It is responsible for building and executing the plans, priorities, infrastructure, and competencies that different groups need. Typical range of functions in a BI CoE include:
- Contract management
- Management of licences
- Support/Help desk BI
- Business Analytics
- Data model management
- Data warehouse administration
- Architecture
- Solution Management – New Features, Enhancement and Upgrades
- Production system management
- Consulting to business units
- Prioritization of BI projects
- Management of Strategy
- Training and Change Management
A well structured BI CoE drives various enterprise-wide data integration initiatives, including data warehousing, data migration, data consolidation, data synchronization, and data quality, as well as the establishment of data hubs, data services, cross-enterprise data exchange, and integration competency centers.
There are a variety of roles within a BI CoE – Executive Sponsors, BI Leadership, Program and Project managers, Business Analysts, Architects, Administrators, Developers, Data Stewards, Data Modelers, and Data warehouse analysts.
A BI CoE’s influence transcends that of a typical business unit implementation, playing a crucial central role in creating the framework for Service Level Agreements (SLA), business change management and strategic roadmaps. The BI CoE via the PMO, ensures that information and best practices are disseminated and shared through the entire organization so that everyone can benefit from successes and failures.
The BI CoE also plays an important change management role facilitating interaction among the various geographies, cultures and units within the organization. Knowledge transfer, enhancement of analytic skills, coaching and training are central to the mandate of the BI CoE.
BI CoE – Managing the Project Lifecycle
A key aspect of the BI CoE is to manage and make critical decisions along the end-to-end lifecycle of the project. This is not easy to do in a large corporation with multiple stakeholders.
Creating the Business Case for BI CoE
BI and analytics investments are skyrocketing as companies come out of recession. To manage these investments a BI CoE structure makes sense. The business case drivers include:
- Operational efficiency —More-effective support and use of information. More-relevant, accurate, consistent and timely information.
- Strategic transformation —Use information to transform enterprise performance.
- Lower Total Cost of Ownership (TCO) — More-efficient use of technology. Remove technical and operational obstacles and redundancies.
Despite the drivers, the best-practice companies undertake BI CoE models after a few successful implementations of BI at various departments and business units. The business case is to ensure the following:
- Make sure BI investments are closely tied to enterprise strategy (Cost Savings, Cost Avoidance, Risk Avoidance, and Better Reporting)
- Make sure BI Infrastructure, Platforms, Tools, Applications and People investments are coordinated
- Make sure there is singular focus and direct accountability for BI, analytics and performance management programs.
The time of BI CoE has come. “Data -> Intelligence -> Insights -> Decisions” is a core causal chain in business execution. The previous execution of BI was about recording transactions in large data warehouses with rather simple front-end analytics. Today, the BI applications are about users extracting, manipulating, and analyzing the data on demand so they can create insights and make better decisions.
Summary
BI CoE role is primarily to:
- Consolidate specialized expertise
- Foster and grow the analytical community;
- Ensure extensible infrastructure;
- Establish BI and Analytics as a repeatable process
- Assess optimal mix of capabilities, tools and paradigms for skill levels and evolve as needed
- Align the organization with the strategic direction and sustainable value creation
- Value data and information as strategic assets
- Best practices continuously refined and promoted
- Show case success, encourage and reward learning (learn from failure!)
Contact me (rkalakota@liquidhub.com) if you want to discuss more detailed models for a business case for BI CoE. In other blog postings I am going to examine different aspects of a solid business cases.
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A good decision, made in the absence of knowledge, is merely a lucky one.
Notes and References
- BI CoE’s are often referred to as BI Shared Services or BI Competency Center.
- How to Establish an Analytical Center of Excellence to Maximize the Value from Your Data and Analytics Investment (http://support.sas.com/resources/papers/proceedings10/173-2010.pdf)
- See also http://www.niteo.com/BICenterExcellence.html for a perspective from NEC on how to structure a BI CoE.
Related articles
- The Role Of The CIO In Big Data Analytics (chucksblog.emc.com)
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