Data Rich, Information Poor
Data overload is becoming a huge challenge for businesses and a headache for decision makers. Public and private sector corporations are drowning in data — from sales, transactions, pricing, supply chains, discounts, product, customer process, projects, RFID smart tags, tracking of shipments, as well as e-mail, web traffic and social media.
Enterprise software, web and mobile technologies are more than doubling the quantity of business data every year, and the pace is quickening. But the data/information tsunami is also an enormous opportunity if tamed by the right organization structure, processes and platforms.
A BI CoE (also called BI Shared Services or BI Competency Centers) is all about enabling this disciplined transformation along the information value chain: “Raw Data -> Aggregated Data -> Intelligence -> Insights -> Decisions -> Operational Impact -> Financial Outcomes -> Value creation.” A BI CoE can improve operating efficiencies by eliminating duplication and streamlining processes.
In this posting we are going to look at several aspects of executing a BI CoE:
- What does a BI CoE need to do?
- Insource or Outsourcing the BI CoE
- Why do BI CoE’s Fail?
- BI CoE Implementation Checklist
What do BI CoE need to do?
BI and big data analytics has come of age, but all the technological advances haven’t minimized the pain of trying to manage a tangle of platforms, tools, data silos and implementations.
Best practice organizations attempt to focus on the data and “use cases” in addition to the platforms/tools and technology. A structural way of getting the people, process and technology aligned is the BI CoE structure.
A BI CoE does the following:
- Establishment of overall governance framework
- Clear SLAs that the business units will get
- Ensuring the provision of appropriate infrastructure
- Project planning and progress reporting
- Establishment of key milestones and deliverables
- Rigorous project management methodology
- Proactive risk and issues management
- Change management, communications and training
- Quality assurance
Insourcing or Outsourcing CoE – What is the Right structure for a CoE?
This is tough question. Insourcing is all about control. You typically want to insource for the following reasons:
- Greater control over resources
- Greater ability to control intellectual property
- Increased visibility of accountability within the organization
- Have confidence in your team to do meticulous planning and flawless execution.
Outsoucing to a vendor or a cloud platform is all about leverage. You want to outsourcing for the following reasons:
- Access to resources and expertise quickly without a long recruiting cycle
- Different cost structure (less Capex and more Opex) and quicker startup
- Vendor brings a broad-based perspective that if leveraged properly can be quite in-valuable
The best option is usually a hybrid model – a mix of insourced and outsourced. The metrics you typically want to optimize in any structure are Cost, Quality, Productivity, Innovation and Speed-to-market.
In a hybrid model think through which resources are inhouse and which resources can be outsourced – Executive Sponsors, BI Leadership, Program and Project managers, Business Analysts, Architects, Administrators, Developers, Data Stewards, Data Modelers, and Data warehouse analysts
Also with data being governed by various Data Privacy laws (see below International and U.S Data Privacy Legislation) think about which enterprise-wide data integration initiatives can be inhouse vs. outsourced — 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.
Think through different types of data and which laws impact each by geography – personal privacy data, client data, internal process data, and B2B data.
Why do BI CoE’s Fail?
Based on our experience typical reasons why BI CoE (Shared Services or Competency Centers) fail include:
- Lack of visible sponsorship
- Lack of baseline/metric/system to measure progress
- Unclear, ineffective decision making process
- The right people not involved
- Not anticipating and proactively managing people issues
- Skills for new roles or jobs are assumed and not tested/assessed
- Planned organizational rationalization is not achieved
- Different departments are resistant to “letting go”
- Lack of understanding about data privacy laws
The proper execution and implementation strategy must specifically address each of these issues.
BI CoE Implementation Checklist
- List and prioritize the business drivers for establishing BI CoE as a shared services model
- List and analyze the benefits expected to be derived out of the BI CoE set-up
- Determine a budget for the setting up BI CoE
- Set a time frame for realizing benefits out of BI CoE
- Assign a person and establish a team to drive the BI CoE initiative
- Assign the designation of the person heading the BI CoE initiative
- Determine if the setting up of BI CoE operations will require the involvement of an external consultant
- List and prioritize activities that can transferred to BI CoE
- Select activities that logically fit together
- Analyze if the activities are strategic or transactional in nature
- Analyze the level of customization the activity will require
- Analyze and determine if the organization will need to procure technology to deliver services through BI CoE
Insource vs. Outsource Checklist
- Analyze the cost of maintaining the technology in-house
- Evaluate the benefits of outsourcing versus maintaining in-house BI CoE Estimate the cost savings that would result from setting up of BI CoE
- Estimate the improvement in service-delivery time that would result from BI CoE Evaluate the changes in organizational structure that would result due to the setting up BI CoE
- Evaluate if the establishing BI CoE would lead to any reductions or changes in existing jobs
Change Management Checklist
- Secure senior management commitment to act as a sponsor of the BI CoE initiative
- Identify all stakeholders that will be affected by BI CoE implementation and assess the degree of impact
- Align the setting up of shared services with the current organizational culture
- Assess if the existing HR policies, practices and processes (e.g., compensation, benefits, performance) support BI CoE implementation
- Assess if the organization has the infrastructure to support and enable employees, i.e., provide them with the appropriate tools and training
- Establish a process for managing conflicts in case they arise
Establish a framework and process for measuring the success of the BI CoE initiative
1) See http://www.slideshare.net/jwboyer/the-nielsen-company-bi-coe-a-case-study – Presented at IBM Cognos Forum 2009. This case study describes the challenges in designing and implementing a BI COE. You see how The Nielsen Company leverages internal staff in the BI COE to support a total of 30,000 employees and a distributed global Cognos development environment.
2) See http://bi-insider.com/wp-content/uploads/2011/01/Business-Objects-and-BI-COE.pdf — How AMTRAK implemented a BI COE around SAP Business Objects.
1) In Support of Business Intelligence for a white paper on how BI CoE for Suppport can improve the effectiveness of a BI Implementation.
2) BI CoE smart ROI Calculator to estimate the Return on Investment from a BI CoE Implementation and identify the difference between BI as a tool implementation and COE as a solution to get the highest productivity, cost savings and best decision-making.
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