1 BUSINESS INTELLIGENCE COMPETENCY CENTER best practices guide 2015 SAP SE or an SAP affiliate company. All rights reserved.
2 TABLE OF CONTENTS 04 Executive Summary 08 BICC Defined 12 BICC Organizational Models, Roles & Skills 26 BICC Funding & Value 32 Creating and Evolving a BICC 34 How SAP Can Help Business Intelligence
3 04 EXECUTIVE SUMMARY Executive Summary Business Intelligence (BI) and analytics continue to be key enablers for business innovation. However despite significant investments, organizations fail to maximize the return on their assets data, technologies and people. Two key elements for successful business intelligence initiatives are a formalized BI Strategy and executive business sponsorship. BI Strategy development and alignment is critical but a strategy alone is not enough, it must also be executed. The creation and ongoing development of a Business Intelligence Competency Center (BICC), sometimes also called a BI Center of Excellence (BI COE), is a best practice to define and operationalize an organization s BI strategy, align its BI initiatives with corporate strategic goals, and ensure return on its investment. Higher BI and analytics compentency and pervasiveness are achieved when organizational culture, business processes and technologies are designed and implemented with the goal of improving or automating all strategic, operational and tactical decision making. BICCs are not new; they emerged in the mid 1990s but were more technologydriven and focused largely on program management. As data has exploded and business user self-service has grown, BICC responsibilities have expanded to include more business engagement for requirements, alignment, enablement and business value. Dan Vesset, Program VP, Business Analytics, IDC Research. Best Practices for BI and Analytics Strategy, Feb
4 06 EXECUTIVE SUMMARY Organizations can ensure that their data assets, technologies and people are maximizing resources for improved business performance through a strategic, programmatic approach to BI that includes five key areas, all of which fall within the scope of a BI Competency Center: EXECUTIVE SUMMARY A ComputerWorld BICC survey showed the top five reasons for creating a BICC were: Increased business user satisfaction Increased decision making speed More accurate decision making Increased usage of BI Background and Purpose Summary of BI needs Value Proposition of BI Information Categories Governance Structure Increased collaboration between IT and business units Current State and History Envisioned To-Be State Expected Benefits - Future State KPI Architecture and Standards Program Management These reasons are still relevant today, especially in light of Big Data and BI Objectives and Scope Priorities and Alignment Business Case BI Applications Roadmap and Milestones increased user self-service. Measurement Reasons for creating a BICC Education/Training Increased business-user satisfaction 88% 83% Support Increased decision-making speed 86% 86% SAP has helped many customers understand and evaluate their current capabilities for each of these areas through a BI Strategy Assessment or through a consulting engagement with More accurate decisions 79% 86% SAP Strategic Advisory Services. A BI Strategy Assessment helps customers understand their BI maturity level and gaps; align their priorities; and create a BI roadmap to evolve their Increased usage of BI 85% 83% capabilities. Increased collaboration between the IT and business units 71% 85% Very often two key recommendations are made following an assessment: Creation of, or specific areas to improve an existing, BICC 100% Development of a formal BI Information Governance process Enterprise (more than $500 million in revenue) SMB (less than $500 million in revenue) For more information on SAP's BI Strategy Assessment, see the BI Strategy Source: 2006 Computerworld Survey - How Companies are Implementing BICCs area of the BI Success site.
5 08 BICC DEFINED BICC Definition BICC DEFINED A Business Intelligence Competency Center (BICC), or BI Center of Excellence (BI COE), is a cross-functional organizational team that has defined tasks, roles, responsibilities and processes for supporting and promoting the effective use of Business Intelligence (BI) across an organization. It coordinates activities and resources to ensure that a fact-based approach to decision making is implemented throughout an organization. It has responsibility for the governance structure for BI and its analytical programs, projects, practices, software, and information architecture. The BICC/BI COE is responsible for building the plans, priorities, infrastructure, and competencies that the organization needs for data-driven decision making using BI and analytical software capabilities. Some of these ares are technical functions; others are business functions. There are three important elements for an effective BICC: Development of an effective BI Strategy Requires identifying key stakeholders, identifying corporate strategy as it aligns with business needs, and identifying business and business unit priorities. This also involves setting strategic analytic vision for the organization. Business and IT partnership Aligning with the BI Development Team BICC includes identification of BI Strategic, Program, Analytical and Technical skills required by the development team and confirmation of deployment capability. It also requires identification of data and architectural scope and overlap. Lastly it requires deployment of BI toolset by project type. Executive business sponsorship and support Executive business sponsorship and support includes strategic business alignment, communicating analytics success stories and ensuring committed funding. Together, these three areas work together to ensure successful execution of the enterprise-wide BI strategy.
6 10 BICC DEFINED BICC DEFINED The figure below illustrates the strategy and execution aspects of a BI Strategy. The BICC participates in both areas. Successful BI Programs Elements Strategy and Execution Plan - Communicate - Refine Execute - Monitor - Optimize BI Strategy & Roadmap Business Driven Corporate Strategy Link & Align Strategy to Execution Ad Hoc Reporting User Access and Usability Operational Reporting BI Self Service BI Strategy BI Execution New Data/ Capabilities Real Time Analytics Strategically Aligned Improved Decision Making Exploration & Visualization Corporate Data Strategy & Metrics Feedback to Strategy Predictive Analytics
7 12 BICC Scope/ Key Areas BI Strategy: The BICC leads in defining the overall BI strategy including the organization s BI mission statement, its objectives and scope. The strategy should be formally documented and available to all stakeholders. The scope of a BICC is quite broad; it is responsible for multiple functions including: Business Requirements: The BICC is responsible for documenting the analytic requirements including use cases and corresponding business value. BI Strategy It is also responsible for prioritizing and common or conflicting requirements. Business Requirements, including alignment and prioritization Business requirement templates should be used to ensure consistency and BI Program Governance completeness of definition. The requirements are defined by business analysts Information Governance & Stewardship who may reside in the BICC or be extended members of the BICC within Education, Training & Communication business areas. The BICC works in collaboration with the IT Development Team Infrastructure & Technology on application development and technical architecture. The architecture is driven by the business requirements. BICC/COE Responsibilities BI Strategy BI Program Governance Business Requirements BI Success Information Governance & Stewardship Insfrastructure & Technology Education, Training & Communication The figure above illustrates the business owned responsibilities of a BICC. Additional areas that are owned by IT include Delivery and Operations as well as Infrastructure and Technology. The following paragraphs describe each of these areas in more detail.
8 14 Sample BI Program Governance Model BI Program Governance: The BICC leads the review of analytic projects or initiative requests through a governance structure. Typically a threshold (e.g., 30 days) is used for prioritization within the BI Development Team. Another threshold is used for reviewing those in excess of this threshold by a Functional Working Committee. Strategic projects and any significant investments are generally reviewed by an Executive Steering Committee. Information Governance and Stewardship: The BICC leader chairs the Information Governance and Stewardship function. BI project requests requirements should include data definitions, calculations, validation tables, etc. The initial requirements and ongoing changes are defined by data stewards who are usually business analysts within business units. These same individuals are often also involved in master data management and operational or transaction data governance where the data originates. Baseline BI Governance & Interactions Model Business Intelligence Team Provides operational support Manages information assets Supports user community Operational status Project pipeline Issues & risks Management review Funding Operational Direction Executive support Project pipeline Sets priorities Implements policy Review Status Reports ROI Makes recommendations Functional Working Group Seeks input Manages issues and risks Sets priorities Implements policy Executive Steering Group Organizational commitment Allocates funding Manage/accept risks Directs and ratifies direction Sets policy Sets priorities Accepts risk Sets direction Champions change Provides input Individual Contributors Consults to governance body Champions change Provides input on direction Champions change Provides input
9 16 A Data Management Team (DMT) within IT is responsible for the technical data management, information architecture, metadata management, data quality, data modeling and administration and database architecture. The BICC, DMT and Users all work together for effective information governance BICC, Data Management Team & Business User Data Management Roles BI & Data Management Team (DMT) Organizational Structure and stewardship. The figure below illustrates how they work together and which area has primarily, secondary and tertiary responsibilities. Primary Secondary Tertiary SAP has created an Information Governance self-assessment survey tool which can help conduct a high level assessment. Development Strategy Definition Data ID and Preparation Business Intelligence Tool Evaluation and Selection BICC/BI Team BICC/BI Team and DMT BICC/BI Team Users Users Users DMT DMT Development, Implement and Train BICC/BI Team and DMT Users and Tech Support Discovery and Exploration Users and BICC/BI Team DMT Deployment Access, Monitor and Analyze Operations Management Users DMT Tech Support BICC/BI Team BICC/BI Team Share and Collaborate Users BICC/BI Team DMT Effect Change Users BICC/BI Team and DMT
10 18 Education, Training & Communication: The BICC is responsible for the end user tool training program. It coordinates with HR or other generalized corporate development areas for non-tool skill development. General BI tool training, as opposed to training on applications developed with tools, is often available from and provided by the BI tool vendor in a variety of options virtual and live classroom. Informal lunch and learn sessions and user groups round out formal training. The BICC usually provides 2nd level support which generates valuable feedback for education, training and additional user needs. MODELS, BICC FUNDING ROLES & SKILLS VALUE Continuous communication among all stakeholders is key to BI program success. A BI portal and various two- way channels are needed. Communities of Interest are an emerging knowledge management and feedback function; they are used for specific skills and best practices sharing and are coordinated by the BICC. These are increasingly important areas as self-service and advanced analytics become more pervasive in organizations. Specific special interest groups (SIGs) often form for data mining, text mining, visualization, etc. Infrastructure & Technology: IT owns the defining hardware components, tools and underlying technologies upon which BI /analytic applications are built. First level user support is usually provided by IT. The BICC works jointly with IT and leads the review and selection of analytic tools needed to address the business requirements needs. Key roles in IT exist for enterprise architects, application architects and data architects. A BICC Technical Liaison collaborates with these roles. IT also owns responsibility for systems availability and performance well and data availability.
11 20 BI Organizational Models BICC can take a number of organizational model forms depending on the organization size, culture and level of existing BI maturity. Each has its own pros and cons. Models can also morph; organizations can start with one model and change to another as the BICC and organization changes. The four most common models are: 1 BICC as part of IT 2 BICC as part of Operations or Finance BICC Organizational Models 3 Virtual BICC Common BI Competency Center Operational Models BICC as an IT Department Virtual BICC 4 Distributed BICC CIO Finance Sales Many organizations start out with a simple program management office or shared services environment but realize that this is not enough as the people and process issues are not addressed. Some start out with a Virtual BICC model as it is easiest to start up and requires the least funding or organizational disruption. Larger organizations, especially global ones, often use a distributed BICC model where each country, region or subsidiary has its own BICC and overall coordination is provided through the corporate BICC. However, the most common model is with the BICC as part of IT. Each has its own advantages and disadvantages; the right one for your organization often depends on your organizational culture and analytic maturity. Department BICC BICC as Part of Operations BICC COO ICC Division 1 Division 2 Division 3 BICC Distributed BICC Corporate Division 1 Division 2 Division 3
12 22 BICC Roles & Skills Other roles, such as business analyst, data steward and value analyst, are often filled by extended members of the BICC who are already performing these functions in their current day to day jobs in functional areas: Regardless of the BICC organization model used, all BICCs need certain key roles and skills. Business Analyst Value Analyst Effective BICCs need to include a variety of roles, but only a few are required full time within the BICC. Three-four full time roles are usually required: Responsible for documenting the business requirements. Responsible for defining initial business value to be attained from the BI project/ Understands the business rules and initiative and for reviewing the actual BICC Leader Business Architect processes of the current organization. value post implementation. Promotes the value and the potential of Business Intelligence in the organization. Reviews business requirements and liaises with development team Acts as a representative of the business unit managers in day-to-day matters. In many organizations is a business analyst or a cost accounting analyst. Drives user adoption. Acts as a liaison between IT and the business; works closely with the Executive BI Sponsor, Executive Steering Committee and Working Committees as well as with IT. Manages the BICC, vendor relations, and licensing. Ensures that BI specific standards and procedures are in place and adhered to. members to ensure BI applications meet user needs. Ensures that business views of the data are created to support end user self-service and that supporting tools are in place and accessible, e.g., such as a business glossary implemented and populated with business definitions and calculations. Data Steward Responsible for the overall activity on data quality improvement, establishing data quality goals and effecting change. Lastly there are other key roles which are owned by IT but collaborate with the BICC including Enterprise Architect, Solution Architect and Data Architect. Technical Liaison Training & Communication Manager Ensures that the technical architecture meets service level agreements and aligns business and technical architecture, processes and standards. Leads the BI training program development and administration. Organizes Communities of Interest and manages internal communication channel such as BI collaboration site.
13 24 One of the components of a successful BICC is ensuring the members have the right mix of Business, Analytic, and IT skills. BICC Skills Business skills are needed to help business managers set and balance priorities by analyzing consequences of choices and creating business cases. They also provide an understanding of the organization's strategic business objectives and that the role action-oriented information plays in achieving the corporate objectives IT skills ensure that the BICC understands the business intelligence infrastructure implications of business and analytic requirements. Those skills are also critical in understanding diverse business intelligence and performance management tools and technologies as well as the differences in design and access characteristics of diverse data sources. Business Skills Business Needs Organizations and Processes Define BI Vision Control Funding Analytic skills help with researching business problems and creating models that help analyze these business problems as well as working with the IT department to develop insight into how to identify data for a specific analysis or application. Business Needs Statistical and Process Skills Manage Programs Develop User Skills BICC Establish Standards Build Technology Blueprint Organize Methodology Leadership Governance, Administration Tools, Infrastructure, Applications, Data Analytics Skills IT Skills
14 26 BICC FUNDING & VALUE BICC Funding Effective BICCs require continuous funding. A number of funding mechanisms can be used, but the most common are described below: Centralized Allocation (Cost Center) Funded from Corporate or IT budget. Gets buy-in from business without potential cost payback. Funded by allocation or charge back. Not always considered fair by business units. Pay As You Go (Charge Back) Subscription Funded based on a business unit s use of services. Fair method, but may inhibit use and growth of BICC. Funded based on projected use of BICC services or number of users. Requires negotiation between BICC and business unit. Centralized management-level financing of BICCs is considered the most effective model as it removed issues regarding allocation or charge back and encourages the broadest use of the BICC.
15 28 BICC FUNDING & VALUE BICC Value BICC FUNDING & VALUE BICC Effectiveness To justify funding, BICCs must demonstrate value. Organizations with BICCs attain a more significant return on investment from their data, technologies and people than those without. A recent IBM Institute for Business study found that organizations that used analytics for competitive advantage were 2.2 times more likely to substantially outperform their competitors. Most organizations see a shift in allocation of existing BI budget to more strategic vs. tactical projects that support strategic organizational goals. In addition, BICC effectiveness also increases. SAP s Value Engineering Benchmarks show that organizations with a BICC require only 2.8 FTEs to support every 100 user vs.4.0 FTEs for those without a BICC. In organizations with a BICC, BI IT teams and users spend more time developing analytics and applying them in the business for improved business performance. Support Equivalent FTEs/100 Active Users BI Tool Standardization, or rationalization, is one of the most basic goals of a BICC and the easiest to demonstrate benefits that can help justify the development of a BICC. BI Tool Standardization reduces the number of tools ideally to a corporate BI standard suite, licensing additional products only as absolutely required. Costs savings come from five major categories: 1 Reduced BI Tool License Acquisition Costs 2 Reduced BI License Maintenance Costs 3 Reduced User Training Costs No BICC BICC Certified BICC 4 Reduced Administration Costs Organizations with a BICC require fewer support FTEs than those without a BICC. 5 Reduced Help Desk/Support Costs
16 30 BICC FUNDING & VALUE Savings by Type BICC Strategy Map and Balanced Scorecard Should Represent a Complete Program of Action BICC FUNDING & VALUE Acquisition costs User Training costs Strategy Map Balanced Scorecard Action Plan Theme: Improve Decision Making Objective Measurement Target Initiative Budget Help Desk/Support costs Administration costs Financial Standardize on BI Tools Lower BI TCO Reduce License Fees Reduce BI Infrastructure Costs Reduce Labor Costs of BI resources # of BI environments Annual BI Tool maintenance & support fees One <$75k BI Tool Consolidation Project Coterminuous SW License negotiations $150K 1FTE Supply Mgt. (80 hrs.) Maintenance costs For sustainable funding and support, it is important that the BI Program Internal Customers Increase Productivity of Knowledge Workers Provide cost-effective Innovative BI Solutions Provide efficient & easier access to info Provide latest BI SW functionality - capabilities End-User Satisfaction Survey # of Self-Service Knowledge Workers # of BI Services available 85% Favourable Services Online User Survey Project BOE Upgrade $5k $350k Return on Investment and value attained be communicated. Up to a third of BICCs do not measure their BICC effectiveness. The remainder use either or a combination of qualitative and quantitative measures. The most common measures include: Project Success, User Satisfaction, Cost-Benefit Ratio, Query Performance, Data Quality, Service Level Agreements (SLAs) and IT Service Management Support Training Gain efficiency through process improvement Improve 1st time incident resolution Develop Online Training Programs Improve tracking of BI support incidents Reduce number of Help Desk intake channels % of 1st time incident resolution Time to resolve BI incidents # of online BI training courses # of Help Desk intake channels 60% 4 hours 10 intro, 5 advanced (2)-800#, Online entry BI-specific Education Program BI Incident Management improvement Program Services Desk Reengineering Program $150k $150k $200k Reduced License Fees One way to plan, measure and communicate BI Program and BICC value Learning Knowledge Managemen Repository R&D BI Lab Develop the necessary BI skills Develop lab environment for innovation Develop the necessary BI skills Develop lab environment for innovation 50 per month 4 out of % Repository incentive program Configure BOE Lab environment $50k $100k is through a Strategy Map and Scorecard. A BICC Strategy Map, Balanced Scorecard and Action Plan should all be aligned: Communicate Measure Execute The BICC Strategy Map should list specific objectives related to 4 key areas: Financial, Internal Customer (users), IT Service Management and Learning. The Balanced Scorecard should list the targets and measurements for each objective. The Action Plan should list specific initiaitves and budgets supporting each target. In addition to a Strategy Map and Scorecard, some organizations also use a BI Dashboard which shows more tactical operational metrics, most often measuring delivered return or operational performance. These operational metrics should also be transparent and regularly communicated.
17 32 CREATING & EVOLVIG A BICC Some questions you should ask yourself to determine if you need to update your BICC are: CREATING & EVOLVIG A BICC Creating and Evolving Your BICC If you are just establishing a BICC, you can develop your BICC using a two phase process: BICC Definition and Design BICC Development and Deployment current BI maturity capabilities baseline assessment, calibration, development, and deployment defining the BICC "to-be" design, defining a 1-3 year of your BICC BICC/BI Strategy transformation roadmap After conducting the first step you will be able to appoint a BICC Leader and select the right BICC model. The first phase will also deliver your required governance framework and a roadmap to incrementally evolve your BICC. A pragmatic way to launch your BICC is to define/document and validate application of standards and processes using a pilot project approach, building out additional capabilities as you add projects. If you already have a BICC, you should assess it and identify areas of improvement. Many organizations have started with a basic BI program management office (PMO) but have been more technology focused. They are often looking to extend their focus to more business related areas such as business requirements and alignment, data governance and or training. How well aligned is IT with the business? Is our User Adoption as high as we d like? How is our User Satisfaction trending? What s our data quality/data confidence? Do we have a channel for regular, ongoing communication with business users? What is our BI onboarding program for new employees? The SAP BI Strategy Assessment Workshop can help you assess and identify gaps in your current organization and governance processes and prioritize areas of improvement. See this 5 part video series on BI and Your Success to understand key aspects of a BI strategy and how a BICC fits Participate in the SAP Value Life Cycle Manager BICC Mini Survey and review how your organization s BICC compares to other organizations who participated in the survey. Additional BICC Resources: Read more about why a BICC is critical to getting the highest level of competency in your BI strategy. Follow Analytics from SAP BICC blog series on all things BICC, including details on different organizational models for a BICC, visibility and funding, and how to get started or evolve your existing BICC.
18 34 HOW SAP CAN HELP How Can SAP Help? Information Governance Self Assessment: We provide a tool to help you assess your current vs. desired capabilities and maturity for data HOW SAP CAN HELP organization and governance, data operations, processes and metrics SAP can help in the following ways: including architecture, integration, cleansing, management and retention based on our Information Governance Model. BI Strategy Self Assessment BI Strategy Workshop Information Governance Best Practices Workshop: Using our Information SAP Strategic Advisory Services for Analytics Governance Model, we review best practices to define and execute effective Information Governance Assessment Information Governance, discuss gaps, and define steps to close gaps Information Governance Best Practices Workshop creating an Information As An Asset roadmap. BI Strategy Assessment: SAP s four-step approach to developing a solid BI Strategy foundation. In step 1, we help you understand your current business pains and the business value of solving those pains. In step 2, we address your current BI strategy capabilities both formal definition and actual execution. In steps 3 and 4, we conduct a gap assessment and define a capabilities roadmap to close the gaps. The current BI strategy capabilities assessment often identifies gaps in processes that can be addressed by a BICC. BI Strategy Best Practices Workshop: Using our BI Strategy Framework, we review best practices to define and execute a successful BI Strategy, discuss current gaps and identify actions to close gaps. We also review the role of a BICC. SAP Strategic Advisory Services for Analytics: SAP Services provides in depth consulting services to help you create or evolve your BICC. Areas include the BICC charter, organizational form, key roles, effective metrics, and much more.
19 36 HOW SAP CAN HELP You can find more information about the BI Strategy Best practices, selfassessment and faciltated workshop on the BI Strategy area of the BI Success web site. HOW SAP CAN HELP You can find more information about the BICC Survey, BICC Best Practices and BICC Best Practices Workshop on the BICC area of the BI Strategy Best practices, self-assessment and facilitated workshop on the BICC area of the BI Success web site. You can find more information about Enterprise Information Management Strategy, the Information Governance Model and Self-assessment on SCN. If you re interested in having an SAP facilitator conduct any of these above assessments or workshops, click on the link on the micro sites. You can also contact your Account Executive directly for more information. SAP Strategic Advisory Services for Analytics is designed to provide an Agile and adaptive Analytics strategy treated as a living artefact that will be continuously refined to meet enterprise objectives. The service addresses three key areas: 1 Vision & Business Value for discovering the business drivers behind your organization s need for BI strategy 2 Technology Alignment focusing on recommendations for improving/ growing the end-to-end solution architecture 3 Transformation Roadmap describing how you can execute the people, process and technology recommendations as a set of projects and milestones
20 38 HOW SAP CAN HELP More Information SAP has several resources available to anyone interested in learning more about BI Strategy and BI Competency Centers. Our BI Success website will help you: Learn what s new in the latest release of BI solutions from SAP, including the recently released SAP BusinessObjects Business Intelligence 4.1 Find customer success stories to help develop your own BI strategies and approaches to evolving BI in your company Receive our best guidance and recommendations for implementing and upgrading BI solutions from SAP, including customized upgrade recommendations The SAP BI Newsletter offers a wide variety of articles around creating an information-driven culture. Complete a short questionnaire about your current BI environment and receive customized recommendations in a handy PDF report Follow up with additional questions to our upgrade experts You can subscribe to the BI Newsletter here. Analytics from SAP Blog also provides thought leadership content. View the best how-to videos for BI best practices in the BI Academy section Content on this website is updated regularly, so check back often to see what s new. Our SAP YouTube channels for BI Strategy and BI Competency Centers offer a wide range of short videos to help show the value and impact of a BI strategy and how BI Competency Centers fit within the BI strategy. BI Strategy BI Competency Centers
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