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BI Strategy:
The Data Management Center of Excellence: What It Is and What It Does, Part 1

online columnist Rich Cohen     Column published in DMReview.com
August 11, 2005
  By Rich Cohen

In last month's column, we talked about alleviating data chaos by implementing a data management framework throughout the enterprise. Once your data management framework is in place, however, you need a way to both monitor and constantly improve it. One way to do that is to use the data organization and governance components of your framework to build a data management Center of Excellence (COE).

Now, more than ever, companies need a way to consolidate and coordinate their data management and governance efforts. Stiffer competition for most companies at home and abroad has created an enormous demand for enterprise performance management. Further, unnecessary complexity in systems and processes has led to poor information quality and inconsistent answers. To answer the need, many companies have increased information technology (IT) spending, trying to search out a "single version of the truth" from their information systems.

Unfortunately, all this comes at a time when most companies are responding to a stricter regulatory and compliance environment by expending IT resources to achieve compliance, while at the same time engaging in some serious cost cutting in other areas to meet competitive challenges. This leaves very few precious dollars to spend on needed improvements to information systems and processes. Therefore, it's critical to manage effectively the resources that are available. One effective way to do that is with a data management COE.

Why a COE?  Individual business units typically implement their own solutions. So, each business unit will typically have different information systems, data warehouses/marts, and business intelligence architectures.  Also, information technologies continually mature and change - making data storage, integration, and management, as well as information delivery, even more critical.  As a result, enterprise-wide coordination of IT resources requires a robust and dynamic organizational structure like the COE.

Many companies already have the roots of a formal COE in place; they just need to recognize and grow them. For instance, many companies have organized simple information exchange models for sharing leading practices and setting guidelines. Two examples: in-house developer forums for software programmers and a group-wide Data Administration function. Figure 1 describes the evolutionary process of the COE in most companies.

Figure 1: The Evolution of the COE

Also, resident in most companies are specialists and consultative resources that serve as in-house sources to support other areas. These are typically dedicated resources that can be accessed to provide in-depth support to teams and projects. Examples of these resources include individual product support specialists and standards groups for various technologies within the company.

However, many companies have gone further with the evolution of information sharing and management.  In many companies, departments have pooled their knowledge resources on an  ad hoc, as-needed basis to organize and manage standards of excellence. Some examples of these resources may include Six Sigma Black Belts,1 software developer pools,and internal consulting groups. Still, to effectively achieve true excellence in corporate information management, the effort needs to be formalized and centralized within a COE.

A true, centralized COE is an independent service center that produces actual work and creates work products.  Typically, it is an enterprise-wide, dedicated department providing services within an actual or implied internal service level agreement. In a typical COE there is a core, permanent COE team of a few, senior experienced resources that are leveraged across multiple projects and responsibilities. Generally, there is also a larger, ancillary team that includes a revolving cadre of business owners and end users as active members involved in management and services delivery.

The COE will be the department that leads a company to business benefits through continuous improvement. This role change will take place over time, as the COE gains the confidence of both knowledge workers and management.

There's no doubt about it, the COE will cost money to establish. However, throughout its life cycle, the COE will transition from being simply a cost center that helps the company efficiently use its technology resources to a valuable strategic partner that aids in achieving its business objectives through the improved use of technology to, finally, a center of leadership within the company that actually drives the business forward through the effective management and use of technology.

There are several broad functions of the COE. These focus on leveraging organizational knowledge and skills to maximize the value of the COE to the company. They are:

  • Directing the migration of integration skills over time based on defined organizational principles (centralized vs. decentralized)
  • Maximizing the value of the technology investment to the company by utilizing a portfolio approach to increase skills and leverage and to optimize the infrastructure
  • Focusing on both project delivery and asset creation, with an emphasis on reusability and knowledge management along with solution delivery

With these broad functions in mind, it's time to turn to the actual responsibilities of the COE within the company. Because the composition of the COE is enterprise-wide, its responsibilities have an enterprise scope. The specific responsibilities of the COE should be:

  • Confirming the integrity of the company's business processes and information systems
  • Controlling existing IT projects to confirm short durations with rapid value delivery (i.e., two- to six-month projects from start to deployment)
  • Providing rotational assignments for COE personnel to:
    • Maintain high energy and focus required for results
    • Create a natural "learn on the job" training mechanism
    • Drive learning and practices back into the company
  • Completing all changes and enhancements to processes and systems that the COE has committed to support, and providing in-depth technical experience to those processes
  • In conjunction with the appropriate business/process groups, understanding business requirements, prioritizing the groups' requests, and providing quality solutions
  • Controlling the quality compliance effort related to the configuration, development, and documentation of enhancements through effective project management processes
  • In conjunction with the appropriate business/process groups, providing requested technical services that are needed at the service level required by the groups' business objectives

OK, so now we know what the COE is and what it can do for any company that chooses to implement one.  The value of the COE is obvious:  It can help maximize technology investment while decreasing costs and increasing efficiency, centralize best practices and standards, and--most important--it can help empower knowledge workers with information and provide thought leadership to the entire company.  The only thing left to do is to build a COE. Funny, that's my topic for next month!


1. Six Sigma and Six Sigma Black Belt are registered trademarks of the General Electric Corporation.


For more information on related topics visit the following related portals...
Business Intelligence (BI) and Data Management.

Rich Cohen is a principal in Deloitte Consulting LLP's Information Dynamics practice where he is responsible for the strategy, development and implementation of data governance, data warehousing, decision support and data mining engagements to support the emergence of world-class business intelligence applications. Cohen has more than 27 years of experience in the design, development, implementation and support of information technology in a variety of industries. Over the last 18 years, he has had extensive experience in the creation of technology strategies, implementations and deployment of CRM and business intelligence solutions to drive improved business performance.

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