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BI Competency Centers

  • February 21 2003, 1:00am EST

In this column, we have been talking about BI: the strategic impact of BI, the necessity for BI and how BI would drive the success of an organization, and we will continue emphasizing these areas as new technologies and ideas emerge in the business world. As with any promising concept such as BI, there is the expectation that this will be the killer app to solve all the problems, and the question is always, "How?" How do you implement BI? Is it a set of data marts connected through conformed dimensions? Is it creating a set of reports that allows users to dynamically navigate through their decisions? Is it ensuring data quality? The questions go on and on. The answer is all of the above. You have to build all these critical components to enable BI. Then the question becomes, "How much of this can we do with a limited budget?" The answer to this question is rather philosophical.

We have trained our IT managers in the past to be goal oriented and driven by project success. We find ourselves a project, add up the numbers and manage the resources. If we need vendors, we evaluate them and manage them. We set up server racks and network connections. All that sounds great, but there is one difference here: BI is not an IT project. Organizations can’t simply go out; purchase a database, an ETL tool and an OLAP tool; hire the resources; and assume that they have BI. In fact, if they do, I’d be very interested in seeing the ROI justification.

If BI is not an IT project, then what is it? BI is a strategic initiative by which organizations measure and drive the effectiveness of their competitive strategy. In achieving this grand goal, of course, there is the need for software, resources, technical leadership, process leadership, executive champions and more. But once we realize that it is a long-term process, then we can break it down to goals and processes periodically and manage our resources and growth accordingly. Since it is a strategic process, we don’t have to define every component down to the nitty gritty. The project teams will form the details automatically as long as they all share one goal: to ensure the success of the BI initiative.

One very effective way of creating and managing BI is to start with a BI competency center. Then the question is where to situate the BI competency center in an organization. Some organizations link this to the IT organization. We have determined that the mind-set here is strategic and not IT management. So IT can’t the best place for this, although the leader of the BI competency center will probably have strong IT background in the short term. The leadership of the BI competency center must be in direct contact with the top leadership of an organization. By nature of BI, there will be collaboration between all departments of an organization whether IT, HR, finance or others. This is no surprise because, in essence, BI has an impact on every business unit.

A BI competency center at least must have a BI leader dedicated to acceptance and success of the BI initiative. There must be at least three key leaders under the BI leader:

  • Data Management Leader – Responsible for issues such as data quality, data integrity, ETL, etc. This individual drives the technical concepts of BI.
  • Business Process Leader – Responsible for ensuring that the BI processes work as a whole allowing business users have access to various data marts across the organization. This individual also drives the design and implementation of Bi projects across the organization from a business standpoint.
  • Project Management Leader – Responsible for everyday tracking of the BI projects and costs, overall costs and trends and patterns regarding the project.

As the BI leader works with the executive team to understand the strategy of the firm, tactics and tasks for ensuring competitive strategy, he or she works with his competency team to materialize the thoughts into several projects across the organization. If the organization has a serious cost- reduction initiative, the BI competency team quickly works with several business units across the organization to identify the metrics and data sources relevant to managing costs. The team works on a plan in which they create components to capture the costs, calculate allocations, monitor savings, etc. If there is a merger or an acquisition, the BI competency group works with relevant groups to identify what would drive the success of the new organization, what data issues might be relevant and what projects should be conducted at what costs.
We clearly see that in every strategic initiative, there needs to be a detailed analysis phase to tell the organization which direction they are heading. In places where this is done using basic methods such as spreadsheets, there will be a lot of work to do to incorporate automated and dynamic BI solutions. If the organization has already invested in BI tools, then the challenge is to maximize the return on investment by actually using the outputs to make solid business decisions. In either case, the effort required to accomplish these goals are above and beyond the responsibilities of a typical IT organization because involvement is needed from other departments. That’s where BI competency centers come into play which bring additional boost to the productivity of the IT organization. As organizations are facing several complex business decisions every day, the investment in a BI competency center becomes easily justifiable.

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