Make the most of your analytical talent

Tips for establishing an analytical center of excellence

As the use of analytics in many sectors of the economy increases, business leaders are developing a greater ap­preciation for the value and power of analyzing data and making better deci­sions. Likewise, the advances in many types of analytical technologies have encouraged organizations to make more and better fact-based decisions, validate assumptions and identify root causes of business problems.

However, a large percentage of organi­zations are still struggling with several aspects of using analytics, including how and where to start, how to take the next step and how to change their internal culture so that analytics becomes inte­gral to the decisions that matter most.

Analytic centers of excellence (CoEs) can help organizations deal with these chal­lenges. Regardless of how much or how little analytic competency an organiza­tion may have, analytic centers of excel­lence provide a means to derive more value through greater insight and better decisions. Let's explore the structure and role of analytic CoEs, and the various organizational aspects that need to be considered to effectively deploy analytics in an organization.

What is an analytic center of excellence?
An analytic center of excellence is an internal organization that specifically focuses on promoting the use of analytics within an organization to achieve business objectives. It is a central point for:

• Developing and evolving the analytic infrastructure.
• Promoting collaboration and analytic best practices.
• Driving growth, cost reductions and profitability.

The center is ultimately a means to sup­port strategy and operations through objective analysis. This organization, or team of experts, must include repre­sentatives with business knowledge as well as analytical expertise. The team is permanent with well-defined roles and responsibilities; it is not a temporary group that gets called on an ad hoc basis to address a specific request requiring analytical resources. An initial, tempo­rary structure may be used as the first phase to justify moving to a permanent CoE team. The temporary structure may include virtual teams, outsourced services or other arrangements based on the spe­cific requirements of each organization. 

It is important to point out that there are many types of CoEs (also called com­petency centers or centers of expertise), depending on the focus and scope. Some of the focus areas for these teams include:

• Enterprise information manage­ment, which covers all aspects of information management across the organization.
• Data integration.
• Information delivery (reporting and performance management).
• Analytics.
• Specific technologies, such as SAS centers of excellence or ERP types of CoEs.
• Specific business functions, such as customer insight or finance CoEs.

Analytic center of excellence tasks
A well-implemented analytic CoE should be a permanent, formal organizational structure (team) with support and spon­sorship from executive-level managers.

It should be owned and staffed by the organization and include representation from business, analytical experts and IT with well-defined focus for roles, respon­sibilities and processes.

Collaboration with all appropriate stake­holders is essential – especially the IT and enterprise data warehouse (EDW) teams – to influence the structure of the current EDW environment in support of analytics and analytic best practices.

The team should be committed to pro­viding and managing robust analytical development environments, including data marts, and to providing and man­aging processes to push results and decision-making logic to production/ operational environments.

It is important to structure the data and processes to facilitate the application of analytics, provide the appropriate level of governance (for repeatability, auditability, knowledge management, etc.) and enable closed-loop learning for continuous improvement.

The analytic CoE team should be responsible for the following:

• Supporting and promoting the effective use of analytics within the organization.
• Developing and promoting analytical best practices to facilitate the identi­fication of analytical requirements (in­cluding new data sources and metrics to measure their efforts/contributions).
• Applying analytics to business problems, and more importantly, interpret­ing and distributing results.
• Educating the organization on the importance of data quality.
• Fostering greater analytic competency to support and guide more fact-based and timely decisions in the pursuit of achieving organizational priorities and objectives.
• Using available analytical skills and resources to optimize their con­tributions to high-priority projects and problems.
• Gradually changing the culture of the organization to always apply critical thinking and to demand the validation of business assumptions and strategies. This includes fostering a learning culture – one that encourages experimentation and provides permission to fail.
• Continuously developing analytical talent.

Currently, a large percentage of analytic centers of excellence can be described as specialized, shared-service organiza­tions. These organizations receive re­quests from the business community to apply analytics to solve problems. There is no question that these types of struc­tures provide value to the organization, but they may not be able to change the internal culture without having a much closer connection and integration with the various business units where better decisions could be enabled.

When used in an ad hoc way and without the right level of executive sponsorship, these shared-service organizations are limited in their ability to have more lasting effects on the way decisions are made and the quality of those decisions.

Making your analytic center of excellence strategic and effective
The best implementations of analytic CoEs have these traits:

• A partnership with business stakeholders for ongoing success.
• High-level executive sponsorship.
• Sufficient prominence in the organizational hierarchy to have visibility and impact.
• A reputation for proven results, excellent work ethic and ability to deploy results that affect decision making.Such strategic implementations will have the highest chance of promoting wide­spread, analytically driven decisions and surfacing new opportunities.

Such strategic implementations will have the highest chance of promoting wide­spread, analytically driven decisions and surfacing new opportunities. All CoEs share many common components and characteristics:

• Sponsorship and governance.
• Analytics program management.
• Data stewardship.
• Internal processes.
• Technology availability.
• Data management.
• Information delivery.
• Infrastructure management.
  

This is a comprehensive list of all possible areas that may need to be addressed to ensure proper and effective implementation of an analytic center of excellence. It is important to point out that not all of these functions will be managed by the analytic CoE team. The point is to ensure that these topics are considered so they can be addressed. An assessment will evaluate how these areas are functioning, and how to best use existing resources to enable the analytic experts to focus primarily on solving business problems rather than other data management and quality challenges.

Approaches for establishing an analytic CoE
The objective of analytic centers of excellence is focused on maximiz­ing the organizational benefit from the investment in data and analytics. Analytic centers of excellence, and any other type of centers of excellence, are not one-size-fits-all. The following key areas must be considered as organizations think about this valuable concept and about the approach to establishing an analytic CoE for their own environment:

• Degree of centralization versus decentralization. Many organizational aspects need to be considered to determine the right approach. Some of these factors include the size of the organization, level of reach (global vs. local), the structure of the business units and technical and IT resources, the existing culture and level of collaboration between groups, the distri­bution of analytical resources, etc.
• Executive support. The support from an executive level is essential for empowering the analytic CoE to produce accurate, repeatable and timely results from applying analytics. Collaboration and discussion between groups are necessary in many cases to collect the require­ments and data to apply analytics and, more importantly, to use the results in the decision-making process. Many successful applications of analytics are promoted by the support of an executive in a business unit that has a clear vision and need to use analytics. Other im­plementations can have a broader scope to cover multiple business units or even the entire enterprise. The common requirement is to have high-level management support.
• Analytical skills. The availability of analytical resources, skill levels and responsibilities are other critical fac­tors. These analytical resources clearly are needed to move forward. However, there are options for orga­nizations to explore if these resources are not available, if they are too few or if additional training is needed. Some of these options include outsourcing some or all the analytical work initially, or working with SAS and other part­ners in a collaborative way to provide the initial resources while acquiring new resources or training existing staff members.

Bio: Anne Milley works closely with Product Marketing, Product Management and R&D to drive SAS' analytic marketing strategy and direction. She began working with SAS software while finishing her thesis on bank failure prediction at the Federal Home Loan Bank of Dallas. She continued her use of SAS at 7-Eleven Inc. as a senior busi­ness consultant. Milley has a Master of Arts in economics from Florida Atlantic University, did post-graduate work at Rheinisch-Westfälische Technische Hochschule Aachen and is proficient in German.

Anne Milley, Senior Director of Analytic Strategy