My May 2003 column, "The Four Legs of a Successful Business Intelligence Project Team," listed project sponsorship and governance as one of the four legs of a successful BI project team. This month we take a closer look at the power of sponsorship and governance and the role it plays in enterprise- wide BI success.
A BI project needs both business and IT sponsorship. You need to get the sponsorship from the business that needs the BI solution the most. The stakeholder business unit could be a line of business (LOB), a business function (such as marketing, finance) or geography (in a multinational company). The IT group working on this project may be either a centralized IT group or the IT group assigned to that business unit.
Getting sponsorship from both business and IT works well for individual projects, but the downside is that it can help create information silos, conflicting and redundant solutions, and overspending. How does this happen? A company is split into LOBs, corporate functions or geographies for operations, management and sometimes regulatory/legal purposes. These business units focus on improving their own performance and drive their own investments. Corporate management, on the other hand, focuses on overall company performance and uses various governance and cross- functional mechanisms to channel business units toward overall corporate goals. In many companies, IT investments in BI are buried in the details and are not visible to corporate management, or there is no entity examining these investments from a cross-functional perspective.
The IT group working on a BI project is usually driven by its business unit sponsor. The sponsor is "king," so they set the priorities and drive the investments. The business unit is interested in solving their own business pain. Long-range BI architecture and strategy is not on their priority list (nor should it be). Many an IT manager has been frustrated when the business does not understand the long-term consequences of not following standards or building an architecture. In the economic climate of cost cutting, it’s difficult to add costs even though the end result will be a better BI solution with more business value.
Organizing for One BI Project
An important lesson is that you often need to start small with the BI project itself. A very effective organizational mechanism to guide and support a BI project is a BI steering committee. This committee is composed of the business and IT management that the BI project team reports to. This committee typically meets biweekly or monthly during a major BI project. The committee hears the status from the BI project’s management and discusses issues and concerns. Its purpose is to keep the BI project on target by talking with the project team, interacting with groups outside the project team when necessary to resolve issues or enlist support and communicating about the project to the rest of the enterprise. For an individual project this is a very successful model that monitors the project team and keeps them from being isolated, thereby avoiding project failure.
Organizing for Multiple BI Projects or a Complete BI Program
With multiple BI projects, you need to expand your organizational and governance mechanisms. The BI steering committee should include business representation from the business sponsors of the individual BI projects and, ideally, from all LOBs, business functions and geographies. But don’t get bogged down trying to make the latter happen we will discuss it in the governance section below. The BI steering committee should be composed of the people who have BI budgetary control. This group will be responsible not only for individual project’s success, but the overall BI program’s success. Therefore, they will deal with monitoring projects as well as prioritization and funding across projects.
A BI working committee is often formed as a bridge between the individual BI projects and the BI steering committee. It can be composed of the individuals managing the BI projects, often their management and their peers from business units who do not have active BI projects. The purpose of this committee, which often meets biweekly or monthly, is cross-project management and issue resolution. This group interacts with the BI steering committee and the individual BI project teams. With a proactive BI working committee, the BI steering committee may shift the frequency of their meetings to monthly or quarterly.
There are various enterprises that have made a commitment to program management offices (PMOs) to manage cross-function efforts. In these enterprises you can think of the BI PMO as being a supersized BI working committee. The PMO is set up to manage an effort that is cross-functional in nature, and within that charter it assists in prioritizing projects, distributing funding, communicating to the various stakeholders, measuring ROI and marketing BI efforts throughout the enterprise. In addition, the PMO sponsors the creation of an overall BI strategy and architecture that ensures that individual BI projects work toward a common goal and infrastructure. It endorses the methodologies and standards to use within BI projects. This framework assists in reuse of data, functions and applications across projects, ultimately improving the time to market of BI solutions within the enterprise in a cost-effective and flexible manner.
A word of caution. People are usually not indifferent with regard to PMOs you either love them or hate them. They can be viewed as an excellent cross- functional organization or a bureaucratic entity that thwarts anything constructive (or so I’ve heard from some people!) If your situation is the former, then getting a PMO dedicated to the BI program is an absolute necessity from an organizational sponsorship and funding perspective. If it’s the latter, then various business units will circumvent the PMO by funding their own BI efforts, often disguised within various business initiatives, and we are back to information stovepipes. What is needed is governance.
An organizational entity that some companies have implemented, and industry analysts are promoting, is the BI competency center. The competency center is created to gain a more cohesive approach for IT to work within a BI program perspective. Often the IT personnel working on a BI project are analysts working for a business unit either directly as members of that unit or indirectly through business unit funding. Meanwhile, the IT personnel developing the enterprise data warehouse are located in another group, often a central IT group. The IT analysts and their business unit partners sometimes view the DW group as slow to respond to needs and this fosters standalone (stovepipe) BI applications. The BI competency center should include the IT analysts developing the BI applications in the various business units as well as the DW group. This enables the IT analysts to develop a cross-functional viewpoint and gets them to work with the DW and infrastructure efforts. Some proponents of BI competency centers suggest combining the IT analysts only. That is good, but not as strong as getting the data perspective into the equation. Data is the glue that binds a BI program and a competency center together.
All these organizational mechanisms need overall governance to ensure that the performance measures are in place supporting an enterprise-wide view. BI portfolio management is an effective approach to provide this governance. It is the budgetary funding mechanism for all BI projects. It enables the transparency and governance that an enterprise needs in this type of IT investment. The portfolio needs to include all BI projects across an enterprise. But even more important is to recognize that BI incorporates all reporting and analysis projects funded in an enterprise. Often the reporting projects for enterprise resource planning (ERP) and other enterprise applications, such as customer relationship management (CRM) and supply chain management (SCM), are viewed and funded outside the overall BI framework. This approach leads to information stovepipes and more costly enterprise solutions than would result if those projects were part of the overall BI portfolio management effort.
Who gets involved in driving the BI portfolio management process? Let’s start with the easier part of the organizational equation: the IT group. The CIO has to be enlisted to be your IT advocate for the BI program. The CIO, of all corporate executives, needs to be concerned with both the BI "what" and "how." The CIO’s motto for BI has to be "think globally, act locally." The CIO is in the unique position to understand why long-term success in terms of business value and cost effectiveness comes from developing an overall architecture to guide the short-term BI solutions needed by the business.
On the business side, the driver is generally the CFO. CFOs are the natural candidates because they are responsible for the accuracy and transparency of corporate information (at least in regard to financial information) and overall costs of the enterprise. The CFO should be driving the budgetary process for the overall enterprise and, therefore, should be able to have the BI portfolio management integrated into it. Other business candidates may emerge based on who in your company is driving the need for information as a corporate asset. In financial services companies the senior vice president (SVP) of marketing may own the BI portfolio. In manufacturing firm it may be the SVP of operations. In all cases it is typically a senior level business executive with significant budgetary authority that is the prime driver.
A BI program requires vision and strategy. It should be constructed with a disciplined architecture, built incrementally while delivering business solutions and benefits. But all the best-laid plans in the world won’t matter unless you have the proper sponsorship and governance. Without it you won’t have the support and funding needed to create a long-term BI strategy that is successful across the entire enterprise.
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