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BI Strategy:
The Data Management Center of Excellence: Design and Implementation, Part 2

online columnist Rich Cohen     Column published in DMReview.com
October 13, 2005
  By Rich Cohen

In August, I talked about what a data management center of excellence (COE) is and what it can do for the company that chooses to build one. Now that everyone is (hopefully) excited about the potential benefits of a COE, I'd like to discuss a phased approach to building and implementing the COE.

Before we talk about building the COE, though, let's talk about what it should encompass. A truly enterprise-wide COE is not one dimensional. In other words, it's not solely concerned with keeping abreast of the latest tools and technologies. The scope of a comprehensive COE is much broader and spans the core services, functions, tools and metrics that the IT staff will use to select, prioritize, manage, deliver and execute its projects.

The COE delivers multidimensional services in two operational areas: business and technology. The role of the COE is not necessarily to provide physical leadership in these areas and multiple dimensions. Rather, its role is to provide thought leadership for, and to participate in, all IT initiatives to confirm that the company's data standards are maintained and adhered to. Figure 1 illustrates the business dimensions of an enterprise-wide COE.

Figure 1: Business Dimensions of the Center of Excellence

I won't go into an in-depth discussion of each dimension, but I would like to highlight some important points. Let's start with the strategy and portfolio management dimension. The COE should be tasked with assisting in the strategic planning process for enterprise information systems. It should also be the mechanism that provides enterprise-wide coordination of all organizational IT applications and initiatives. In conjunction with this coordination effort, the COE staff should be in charge of identification, enforcement and adoption of enterprise-wide data standards.

Next, let's look at the people management dimension. Business unit and department leaders tend to get touchy when the COE leadership requests that resources from their unit/department be assigned COE-related tasks in addition to their regular activities. However, one of the main tasks of the COE is to confirm that resources are allocated in a way that's fair to the company as a whole, not just to individuals. For that reason, one of the main components of the COE leadership structure should be a stewardship committee that assigns resources to the COE in an objective manner - bearing in mind the company's needs, rather than individuals'.

Next up are the technology dimensions of the COE. Figure 2 depicts these dimensions.

Figure 2: Technology Dimensions of the Center of Excellence

Again - no in-depth discussion, but I will highlight a couple of key points. One of the fundamental responsibilities of the COE is to provide thought leadership for - and assist in the development and implementation of - technical architecture initiatives in the context of how those initiatives will meet the needs of the organization as a whole.

It's the same thing for the service and support dimension. Service and support operations for the enterprise technical architecture should be holistic in nature. The COE staff should work with individual business units to develop specific internal service level agreements (SLAs) to support information systems. These SLAs should be developed with the needs of the organization as a whole in mind, not just distinct business unit needs. Sure, there will be distinct SLAs for business units, but they should be integrated with the needs of the organization.

Now let's talk about the methodology to build the COE. This is just like any other IT project. I prefer a phased approach that develops the COE linearly, from requirements gathering to implementation. There are four phases to the COE project: target, analysis, design and build.

In the target phase you perform a needs assessment by conducting workshops with business groups to better understand the company's business intelligence needs. Based on those needs, the next step is to develop a charter that defines the vision, goals, objectives and scope of the COE. For the most part, this charter will be different for each company that implements a COE. However, as I've said before, one fundamental aspect of any COE charter should be to provide thought leadership to the company regarding IT initiatives and enterprise data standards. Other, more concrete, objectives in the charter could include maintaining enterprise data standards and assisting IT strategic planning.

The analysis phase is where you match the needs created by the charter you've defined for the COE with human resources within the company. Then you perform a gap analysis to understand the disparity between current resources and those required to execute the charter objectives. For example, if one objective in the charter for your COE is to assist in IT strategic planning, you'd need to determine who in the company has the requisite skill sets for IT strategic planning and whether those people are available, and then choose the best match of available people and identified needs.

In the design phase you develop the blueprint that will guide the COE in achieving its goals and objectives. For example, let's say that in the charter you've defined, one of the objectives of the COE is to be the custodian of organizational data standards. In the design phase, you'd define the term "custodian," and you'd develop a list of activities that the COE would be responsible for in meeting the objective of maintaining the data standards.

It's also in this phase that, based on needs identified in the design phase, you determine the mix of part-time and full-time human resources who will staff the COE. These people should be the company's best and brightest from the IT staff and from key business functions. Most resources will be part-time, but there should be a few full-time IT people who staff the COE. The objectives you've identified for your COE will determine your best mix of resources.

Ideally, IT people assigned to the COE should have some knowledge of one or more key areas of the business, and they should have the ability to explain technical concepts to business people. Likewise, business resources (usually subject-matter experts) should have some IT knowledge - not deeply technical, just enough to explain the business rules behind the types of data that organizational information systems contain.

In the build phase, you deliver the goods. Deliverables from the build phase fall into three categories: organizational, process and technology. Organizational deliverables include a staffing model, funding model, organizational readiness assessment and communication plan. Process deliverables include an execution methodology, project prioritization, effort estimation templates and governance model. Technology deliverables include architecture patterns, common components and documentation standards.

What does building the COE do for you? The implementation of a COE should produce the following benefits:

 Reduced information delivery costs via:

  • Standardized methods, leading-practices repositories and common tools,
  • Enterprise-wide methodologies to develop and maintain IT infrastructure and processes,
  • A centralized repository of the organization's IT knowledge, and
  • Consistent infrastructure that reduces time to analyze and design new IT solutions.

Reduced enterprise costs via a consistent data architecture and data integration infrastructure - thereby reducing complexity, redundancy, tool proliferation, etc. - thus reducing software licensing and training costs.

Increased speed of service delivery via:

  • Defined methods, templates and processes that reduce time to define and execute projects, and
  • Standardized infrastructure that reduces complexity and time needed to adapt business processes to changing competitive forces.

Increased effectiveness via an organizational knowledge management process that confirms process improvements are captured and standardized.

As with any good thing, there is a catch. Before you begin to build your COE, you need to have your house in order. It's absolutely critical that, from the outset of the project, you have rock-solid executive sponsorship for the venture. Why? Two reasons. First, COEs are not free. They take six months to a year to build, and they cost precious budget dollars at a time when those dollars are held especially dear. Second, the COE will demand resources from most business units in the company, and you'll need a solid sponsor to persuade the managers of those much-needed resources to share.

When completed, however, your COE should provide you with a leg up on the competition. You should have an enterprise-wide, centralized group that can deliver and manage quality assurance initiatives across the organization. It should enable the organization to move beyond a project-by-project approach when implementing technology initiatives and to leverage existing skills and reusable components. It should also provide the capability to collect, communicate and disseminate people, assets and knowledge throughout the organization. How can you go wrong with that?


For more information on related topics visit the following related portals...
Corporate Performance Management (CPM) 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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