a ccel era t in g business a n alyt ic s e ... - hansa cequity · we continue our approach of using...

ACCELERATING BUSINESS ANALYTICSEXCELLENCE – THE CoE WAY

By Chetan Bhangdia

OVERVIEW

In the first article of the series, titled ‘Getting the Analytics Journey Right’, we looked at Business Analytics from a ‘Business Technology’ (BT) perspective and introduced the Design - Build - Operate - Govern (DBOG) approach that leads to successful and sustained BT initiatives. We also discussed the drivers and enablers of Business Analytics concluding with the best practices to get

the Analytics journey right. In this paper, we continue our approach of using the BT lens to move the Analytics discussion forward. First, the concept of ‘Centre of Excellence’ (CoE) is elaborated followed by introduction of a 6E focus area framework and usage of DBOG model for CoE creation. We conclude with specific application of these ideas in context of the Analytics CoE.

THE 6E FOCUS FRAMEWORK

The focus areas of CoE can be illustrated via a 6E framework elaborated below.

Enterprise ViewCoE structure enables a strategic view and helps craft a compelling enterprise wide vision. Taking an integrated view of business needs leads to identification of synergies across organizational units and align those needs to enterprise goals. For example, a distribution strategy cuts across market research, product design, advertising, demand forecasting, pricing,

channel selection up to sourcing. The CoE can apply enterprise view to carve out priority programs and projects.

Selection of programs and assigning a certain level of resources to selected ones is crucial. When done in silos of individual functions, departments or business units, the criteria used for program selection principally revolve around a local view and therefore selected programs do not translate into a larger enterprise wide impact. The CoE

CENTRE OF EXCELLENCE

CoE is an organizational construct that plays a pivotal role in providing vision, strategy, guidance and enablers for the design, build and operationalization of an organizational capability.

The CoE approach provides following significant benefits:

• Integration - Allows Enterprise wide Coordination

• Agility - Accelerates Enterprise wide Execution

• Cost Effectiveness - Unlocks Economies of Scale

• Refinement - Manages the on-going Evolution

can take a cross-sectional view of benefits to prioritize enterprise wide programs and create a superior return on the rupee invested.

Enabled InfrastructureInfrastructure refers to foundational elements around tools, technology, tech-niques and related enablers. Decisions on selection and modalities of usage are fundamental choices with a lasting impact. The infrastructure could be fully centralized or it could be federated with adherence to common standards. A substantial acceleration of infrastructure development is possible when the activity is driven by a team of experts within the CoE in consultation with stakeholders.

Historically, organizations have spent a lot of time and effort trying to connect disparately conceived infrastructure elements. Often, costly initiatives are taken to standardize infrastructure islands or connect them at a later point in time when integration gaps start visibly hurting the business. CoE can optimize the infrastructure investments. Benefits include reduced time to market and demand pooling driven economies of scale. A well thought out infrastructure decision aids ease of interoperability and simplifies integration across organiza-tional units.

Embedded ProcessesStandardized and rationalized processes create efficient cross functional workflow thereby improving the quality of outcomes. Good process design enriches customer, employee and partner experi-ence. Often, functional silos create a bumpy process flow leading to value leak-age as turnaround time suffers and rework increases.

CoE can enable a smooth end to end process design across various organizational units or between sub-units within the same unit. A comprehensive process design addresses purpose, inputs, outcomes, people roles and responsibilities. When right level of process enablement is done, the organization experiences improvements in throughput, predictability and quality. A suitable balance between rigor and flexibility eases enterprise wide process adoption. For example, design of an agile framework should balance speed of execution with quality of deliverables.

Expertise BuildingWhen the organization is undertaking a business transformation initiative, it is imperative that people skills dimension is planned and executed carefully. Doing new things or alternately new ways of doing things, calls for development or refinement of soft and hard skills of the workforce. In addition, one is required to forge solid partnerships with external firms to augment in-house skills and expertise. Without people readiness, best of the initiatives struggle and often fail or significantly under deliver on expected value creation.

For a high impact change like building out a new organizational competence, the scale and criticality of skill and expertise should not be underestimated. Successful adoption requires that the impacted members of staff are enabled via awareness, process and tool training, provisioning of job aids, linking action to incentives etc. Leveraging external partners can serve as a principal skill enabler for successful adoption of a large scale change and boosts the on-going incremental changes.

Execution GovernanceThe next key focus area for a CoE is to establish policies that provide broad guidelines for making decisions throughout the lifecycle of initiated programs. This includes regular review of selected programs allows for an objective evaluation of what has gone well and what needs to improve. Policies and reviews are guardrails that safeguard programs from going awry. When exercised constructively and in the right measure, governance facilitates sustained successful outcomes.

For example, decisions about standardization of processes, tools, vendors etc. not only reduce time spent in reinventing the wheel. In contrast to the popular notion, governance should strive to facilitate faster and smoother execution. Equally, it is important that governance adapts to changing needs to maintain its relevance and effectiveness.

Excellence in DeliveryThe ultimate purpose and end game of investments is value creation and delivery

for various stakeholder groups. From the investor’s perspective, the value could be measured in terms of sustained financial returns on investment. For customer satisfaction, value could be measured through metrics like NPS, retention rates and growth of loyalty base. For the employee, value could mean skill enhancement and enriched role. Irrespective of the stakeholder group, there are expectations and measures of value delivery. Focus on delivery excellence ensures that the investments create accretive value for the stakeholders.

Delivery excellence can be seen as a culmi-nation of all the focus areas mentioned above. The CoE can build it in from the strategic planning phase; put process design, infrastructure and people enablers in place; monitor progress through execu-tion governance and operationalize a measurement framework to assess that delivery excellence is on track. Measures of excellence can be agreed upfront with the stakeholder groups and monitored for course correction.

The 6E Focus Framework for CoE

Excellencein Delivery

ExecutionGovernance

ExpertiseDevelopment

EmbeddedProcesses

Enabled Infrastructure

EntepriseView

ORGANIZING THE CoE

Organizing the CoE consists of choosing an operating model, defining roles & responsibilities and populating the structure with right skills.

OperatingModels

• ‘Centralized’ e.g. CoE becomes an independent department with full end to end responsibility & ownership

• ‘Hub and Spoke’ e.g. CoE acts as a hub for design & overall governance with the build and operate being done in respective organizational units

• ‘Decentralized’ e.g. each organizational unit has its full end to end ownership. CoE acts as a strategic planning partner & a governance body.

Nature ofCoE Membership

• Full-time Permanent Staff – Forms the core CoE team and are dedicated full-time

• Full-time Partner Consultants – Bring in specialist expertise, are part of the core CoE team, accelerate the CoE build out and delivery excellence

• Part-time Permanent Staff – Drawn from business units and contribute to core CoE activities on a part-time basis

• Need based Consultants – Bring in niche advice and are engaged for a short period on a one-off and need basis

Roles

• CoE Leader – Collaborates with BU senior leadership & Corporate leaders to strategize, Provides leadership to core CoE team, Accountable for success of CoE

• Business Partners – Engage with departments, functions and business units to form a bridge between the CoE and these organization units, facilitate flow of information and deliverables

• Subject Matter Experts / Consultants – Specialists in at least one and preferably more areas under the CoE umbrella, could be perm staff or external partners, could be full-time or part-time

ORGANISATIONAL OVERVIEW

CoE centralizes a set of activities and therefore constructs an operating model with other organizational units. In the CoE context, centralization refers to activities that are primarily controlled and performed within the CoE outside the respective organization units.

Based on the nature of activities that are centralized, the CoE has a varying span of control. Choice of the CoE span of influence translates into centralization of those set of activities and creation of different types of operating models.

Traditionally, organizational culture and leadership preferences tend to dominate the proposed degree of centralization. Other aspects that should weigh in heavily are:

Criticality of Purpose: What is the expect-ed business impact of not getting a set of activities right? What is the expected speed of execution across the enterprise?

Benefits of Synergy: To what extent does the activity have a strong cross-functional, cross-departmental flavour? What is the level of enterprise wide coordination required for the activity to succeed? What is the impact on total cost of ownership of centralizing activities?

Current State of Readiness: What is the level of readiness in terms of expertise, processes, infrastructure across the organization? Will centralization of a certain set of activities accelerate the overall organizational readiness?

The span of control is not necessarily static in long term. As the capability evolves and matures, stepwise decentralization of certain activities might take place. Individual organizational units could start playing a larger role for increasing number of activities. The key determinants of span of control should be reviewed at prominent inflection points of capability evolution.

CoE OPERATING MODELS

CoE: DESIGN-BUILD-OPERATE-GOVERN

Full Centralization: CoE is responsible for all activities, Org units are largely contributors to strategy & consumers of CoE outputs

CoE: DESIGN-BUILD-GOVERN

Strong Centralization: CoE responsible for majority of activities, Org units contribute to strategy & take care of operations

CoE: DESIGN-GOVERN

Partial Centralization:CoE focuses on strategic aspects, Responsibilites are equally shared between CoE & Org units

CoE: GOVERN

Strong De-centralization:CoE is responsible for strategy and governance only, Org units are responsible for all activities including design, build out & operations

The ‘Design-Build-Operate-Govern’ (DBOG) model that was discussed in first paper of the series can be applied for build out of a CoE. The benefit of a DBOG approach is that it addresses the entire lifecycle of capability development and evolution.

Operate

• Craft high impact Analytics programs

• Review and approve proposals from various departments

• Provide guidance & governance by conducting regular stakeholder meetings

• Periodic strategy refresh with corresponding iterations of Design-Build-Operate phases

Build

• Create Roadmap for build out of CoE

• Plan for organizational change management & wider stakeholder buy-in

• Approve program constructs

• Execute, Review progress, provide guidance

• Sign-off on completion of identified programs

Design

• Gain senior stakeholder buy-in

• Articulate Business Analytics Vision & Linkages with Business Strategy

• Define CoE Charter, Enterprise Analytics Framework

• Conduct Organization Analytics Capability Assessment

• Establish Priority Areas to build Organizational capability

• Decisions on processes, tools/technology, people development, external partnerships, governance process

CREATING THE CoEGovern

Following table illustrates DBOG approach.

Analytics CoE – 6E Focus Areas

• Linking Analytics to KPI's

• Enterprise Analytics Framework

• Enterprise Analytics Implementation Roadmap

EnterpriseView

• Information Assets Catalogue

• Information Technology Investments

• Analytics Tools & Utilities

Enabled Infrastructure

• Analytics Process Workflow

• Program / Project Management

• Embed Analytics in Business Processes

Embedded Processes

• Appointment of Leader & core team

• Analytics Competence Development

• Vendor Partner Selection

• Steering Council

• Review Framework

• Review Analytics Programs & Operations

• Analytics Maturity: Assessment Framework

• Analytics Process Metrics

• Validate Business Value Creation

BusinessPartners

DataSpecialists

Analytics CoE Organization Structure

CoE Leader

DomainExperts

ProgramManagers

AnalyticModellers

Strategic Vendor Partners

The Analytics CoE facilitates and accelerates the build out of Analytical competence in the organization. Focus areas and organization of a typical ‘Analytics CoE’ are depicted.

THE ANALYTICS CoE

Expertise Development

ExecutionGovernance

Excellence inDelivery

SUMMARY

We elaborated the concept of CoE and it’s aptness for creation of a new organiza-tional capability. The CoE ensures that capability creation is moving in the right direction, with required enablement and at optimal pace. The journey of Analytics

can be accelerated by systematically creating a CoE. The power of a well-craft-ed CoE can unleash Analytics competence of the organization in a focused and calibrated manner resulting in enduring business impact.

The CoE structure needs a rich variety and depth of skills to populate the key roles. The business partner and program management roles bring in much needed business and process management orientation to the table. Analytic modellers are experts who possess statistical, mathematical and optimization skills. Data Specialists are experts in sourcing, processing, enriching and storing data that is consumed and produced by analytic modellers. Domain experts specialize in a business discipline that is core to the strategy of the organization e.g. marketing research, financial planning, manufacturing etc.

An oft discussed question is about roles that should be kept in-house vis-à-vis the

ones that should be outsourced. Typically, the right mix of in-house and outsourced consulting staff provides the crucial balance between control and skill leverage.

The CoE Leader and business partner roles should stay with the organization’s permanent staff. Program managers and domain experts could be sourced externally to augment capacity or fill skill gaps. For other roles, apart from having a few members of permanent staff, the strategic vendor partners are often leveraged owing to the expertise, experience, intellectual property, depth and breadth of niche skills available to flex and enrich the CoE team based on business needs.

ABOUT HANSA CEQUITY

Cequity’s business is helping companies enhance Customer Equity.Founded in 2007 with the belief that customer equity is the primary differentiator in the next era of business, Cequity works with top management teams to create and operate customer-centric strategies as a strategic asset.

Our work from the past and research-driven mind-set to understand customer value drivers evidence a tie-in of customer experience to lasting financial results.

Who we work with?Our clients are typically bold, ambitious business leaders who seek to create a customer intelligence-led differentiation. They have the talent, the will and the open-mindedness required to succeed. They are not satisfied with the status quo and are looking to transform customer experience.

What we do?We help companies acquire, retain and manage customers optimally. We help management define actionable customer strategies driven by data, analytics, marketing technology and creative insights. We take it a step further by working with management teams to implement and operate on these strategies to achieve desired success.

How we do it?Our elegant integration of multiple services - strategy, data, analytics, technology, campaign management, digital, customer relationship centres and creative solutions – as an integrated platform, creates outstanding results for our esteemed clients. Our deep experience as a consulting and operating partner enables us to deliver tangible business impact and success.

403 & 404, B Wing,4th Floor, Commercial Office Towers,Kohinoor City Mall, Kirol Road, Off LBS Marg,Kurla (W), Mumbai 400 070.Email: info@cequitysolutions.comhttp://www.hansacequity.com

Mumbai, Delhi, Bangalore, Chennai and Chicago.

Consulting I Data ManagementAnalytics & Insights I Campaign Management Digital Experience I Customer Experience

About the AuthorChetan Bhangdia is Executive Vice President with Hansa Cequity. He oversees provisioning of solutions and build-out of capabilities in the areas of data management, analytics, technology, campaign management and customer relationship centres. He can be reached at chetan.bhangdia@cequitysolutions.com