Successfully Staffing your packaged BI Initiative An American Partners White Paper February 2011
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1 An American Partners White Paper February 2011 Abstract In the second decade of the 21 st century, packaged BI applications manifest the second wave of must-have IT for businesses of any significant size. As companies have learned through countless failed implementations of ERP, one of the major exposures that threatens a successful and timely project is an absence of a more holistic staffing strategy. This paper discusses lessons learned from failed and delayed projects, and offers high-level criteria that application owners should follow in building an effective project team, using foresight and intense examination of knowledge parameters beyond exclusively skill-based approaches.
2 Introduction Businesses today face increasing enormous market pressures to anticipate competition, business opportunities and potential threats. They also face more regulation and more intense pressure to improve profits and reduce operating costs. Performance Management and Business Intelligence applications comprise an emerging second wave of packaged business solutions Therefore, being able to make informed decisions in an ever-compressing time frame is paramount. Being analytics- savvy is not just an option for most businesses but rather a matter of survival. If a company can gain insight into customer, product, channel, pricing and supply chain, predict the best customers, best pricing and most profitable products by analyzing business data and then take effective actions, it will leave competitors in the dust. In the last decade, companies like Oracle, PeopleSoft, and SAP became synonymous with large scale implementations of packaged enterprise resource planning (ERP) applications. ERP came into extensive use in the 90 s with different modules such as financials and human resources that could be operated from anywhere, which facilitated the global business. Today ERP is, for any mid-size or larger firm, both a necessity and a commodity, much like office productivity software or . How many companies today would commission an engineering team to custom build a financial system? Along the same lines, Performance Management and Business Intelligence applications comprise an emerging second wave of packaged business solutions. These applications can be rapidly deployed with prebuilt integration into leading ERP packaged applications. With the dramatic decline of traditional BI implementation costs and timeframes by a factor of two or more, it s no wonder worldwide adoption has rapidly risen over the last couple of years. These packaged BI solutions have evolved to ably respond to market and regulatory forces. But planning, scoping, scheduling, monitoring and delivering a successful project has at its foundation a sound strategy to staff the project team with the proper experience and team orientation from inception to post-launch. The question for a business then becomes, How should we successfully staff our implementation teams to deliver these benefits to our businesses? Second Wave Apps Why Buy versus Build? Since the industrial revolution, companies in all industries have adopted the buy to standardize and build to compete concept, which enables them to focus on their core expertise while outsourcing specific expertise and services. In theory, this should tend to foster automation of every-day or commodity-like processes while freeing up people and resources to focus on building core processes that differentiate the company. In the real world, the theory is not always so definite to apply. There are several build- 2
3 or- buy decision criteria that an organization considers: return on investment, total cost of ownership, time to market/deployment, resource capability and skill sets, and more. In fact, the major decision points are similar to the ERP/CRM buy-versus build arguments that were common several years ago. It s now time for BI applications to undergo the same consideration. Leading software vendor solutions such as Oracle BI applications provide a significant head start to any rapid deployment of Business Intelligence on top of ERP solutions. Comprised of significant prebuilt content (KPIs and metrics) and sophisticated reporting environments, these applications can provide a fully functioning environment in a fraction of the time and resource cost of doing it all from scratch. It should be no surprise that the complexity of a BI system increases with each application and data source added to the landscape. For organizations with two or more of these systems, the pre-built functionality and plug-and-play integrations make a very compelling case, as much of the difficult work has already been pre-built and tested. Generally speaking, the primary benefits that push an organization off the fence toward a packaged BI application rather than building one in-house are the shorter implementation times and quicker return on investment. Companies obviating 100% of the implementation time normally involved in custom development are no longer rare exceptions. One reason for this is that it takes a long time to build a BI application given all the required components. Some other reasons offered for the buy option are the available domain expertise provided by the vendor to the organization, integration capability with existing systems, the scalability of the solution and a higher adoption rate by the business user community. What does this tell us about the concept of methodical staffing for implementing and operating a packaged BI application? If a company has elected to take advantage of domain expertise, pre-baked functionality and processes, strong integrations with incumbent systems and the like, it should apply similar value judgments with the staffing strategy. Rarely would a company elect to buy a six- or seven-figure packaged application based simply on the unit cost to acquire the solution, or the feature set alone. This would lead to more than one or two pink slips and an almost immediate impact on the productivity and decision making for every BI user. In fact, it could even set the company back quarters or years in capability. Yet some companies reduce their BI project staffing strategy to the lowest common denominator: the cost to acquire a technical skill set. These firms almost always pay an exorbitant price albeit sometimes hidden for a penny-wise, pound-foolish philosophy. 3
4 Lessons Learned One of the most important lessons learned from the adoption of packaged ERP applications is that domain (functional) expertise as well as prepackaged application content ( what s inside the box ) is as important, or perhaps even more important, than sheer technical skills. The alluring benefits of simplistic efficiency operations aiming to lower the costs of IT have proven to be a pitfall for packaged application implementations. The alluring benefits of simplistic efficiency operations aiming to lower the costs of IT have proven to be a pitfall for packaged application implementations. In practice, most organizations initially focus on looking for technical expertise. Emerging offshore models have enabled companies to hire predominantly for technical skills for significantly lower cost. While this has proven to be a viable alternative for application maintenance (post launch), initial implementation projects have demonstrated that cost- effective initiatives require experienced resources with a full arsenal of domain and functional expertise, knowledge of the prebuilt application content and technical skills. For example, ACME corporation seeks to augment its Oracle applications environment with Oracle BI. ACME s financial and HR modules have a few key customizations (or perhaps integrated point solutions) that mandate a skilled project team who can essentially port the unique logic and integrations into the BI analytics piece. Businesses should focus on a combined skill set of business domain and functional expertise, prebuilt application content knowledge and software tool experience ACME s project owners correctly assume there will be extra development time to accommodate this, but to determine the full extent of the project, they ask the development lead from ZZZ, the offshore IT team that maintains the existing ERP to lead the effort. The offshore lead and her team have technical expertise in every application and database in the ecosystem, but ZZZ did not code the customizations or build the integrations, as that had called for an intensive on-site engagement, so they are starting from scratch. ZZZ have no incentive to point this out, as it would cost them billable hours. They also have no underlying grasp of the business reasons for the unique logic or the homegrown or point solutions, because they are overwhelmingly code-oriented, rather than operationally, financially or personnel-management oriented. Following standard project requirements, the development lead woefully underestimates the total duration. Beta after beta is rolled out to the end users, and bug reports keep coming back. What began as a three-to four-month implementation stretches to a year, and ACME s total cost to launch is doubled. This does not even begin to account for eight months of lost opportunity. Unfortunately, this scenario is very common. As the example illustrates, as with to ERP, hard technical skills (such as leading BI tool knowledge) do not guarantee successful 4
5 delivery of packaged BI projects on time and budget. Technical savvy doesn t reduce the need for bandwidth of your subject matter experts. Instead, despite all the prebuilt reports and metrics, the discovery process of gathering requirements and understanding the business in general will not be any shorter than the typical custom development BI initiative would be. This is one of the key reasons that an exclusively skill-oriented strategy significantly increases the chance of exceeded budgets, missed end user expectations, and unfulfilled promises for the lower TCO of packaged applications. Instead, businesses should focus on these multiple parameters: a combined skill set of business domain and functional expertise prebuilt application content knowledge software tool experience. For example, an HR application stakeholder would want the implementation team to know not only which specific prebuilt HR headcount metrics can be delivered to the end users, but also how these metrics are derived from the existing HR system. Let s detail these requirements further. Finding the Right Mix What parameters should you focus on when staffing your packaged BI projects? The overarching principle is identifying cost effective resources measured by the amount of time, effort and costs involved to deploy a functioning system and begin demonstrating real value. This value for value concept comprises the following criteria: Domain & functional knowledge: understanding how source applications such as Oracle Financials or PeopleSoft HR and their conventions work. This also requires fundamental understanding of the cardinal business logic, for example, knowing what a balance sheet is, or how subledger details are posted to a general ledger. General application knowledge: demonstrated understanding of how your BI application works, knowing where to look for a particular piece of logic, knowing how to customize and enhance the data loading process. Achieving the main benefits of BI apps is only possible with good knowledge of how the apps work. Technical BI skills: Experience with BI tools, data warehousing, ETL and database management systems. These parameters should not be mistaken as merely an augmented list of skills! The first two criteria can be manifest in experience with customization and integration of the 5
6 application; formal education in business disciplines; development of KPIs for similar or related purposes; product and program management expertise; and the experience of being an actual BI application end user/stakeholder. Conclusion If you are about to embark on a packaged BI application initiative, don t set land mines by staffing your implementation team primarily based on hard technical skills. Successful packaged BI application initiatives require cost-effective experienced resources who possess the full raft of domain and functional expertise, knowledge of prebuilt application content, and, of course, technical skills. When your staffing strategy is as well-rounded and methodical as your application evaluation process, you can accelerate delivery and prevent future headaches, because you re placing the human factor on the same level as the code. About Us American Partners, Inc. is the leader in Business Intelligence and Enterprise Performance Management. The management team at American Partners, Inc. has an average of 15 years recruiting experience providing staff augmentation and permanent placement services to its clients with the best consultants and quality of services at the most reasonable prices in the marketplace. We are committed to delivering the right person the first time. Our focus and experience enables us to deliver innovative resource solutions to our clients as a market leader in the following product suites: Oracle/Hyperion EPM Oracle Business Intelligence SAP Business Intelligence Jeroen Vanheeringen (JV) is an independent consultant specialized in delivering packaged BI application solutions for ERP environments such as Oracle and PeopleSoft. In a hands-on consulting and management role JV implemented and managed several initiatives in multiple countries. In his twenty plus years of software industry experience, JV has successfully launched and managed data management and integration initiatives for global US product vendors such as Sun Microsystems and Quest Software. Contact Us John Pesce (+1) jpesce@americanpartnersinc.com 6
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