White Paper Business Analysis Center of Excellence v2 2007.pdf

8/22/2019 White Paper Business Analysis Center of Excellence v2 2007.pdf

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703.790.9595 703.270.5033 www.managementconcepts.com 2007 Management Concepts, Inc. All rights reserved.

Business Analysis Center ofExcellence

The Cornerstone of Business Transformation

Kathleen B. Hass, PMP

Project Management and Business Analysis Practice Leader

Management Concepts

With Richard Avery, Terry Longo, and Alice Zavala

Abstract

The fiercely competitive twenty-first century business environment poses challenges atevery turn. Both public and for-profit organizations must be flexible and adaptable toremain competitive. It is through successful projects that organizations manage change,deliver new business solutions, and ultimately, achieve their strategies. However, we con-tinue to struggle to manage complex business change initiatives. Organizations aroundthe globe are striving to improve their business analysis capabilities to drive changes fromstrategic goals, invest in the most valuable projectsthose that deliver the highest valueat the lowest cost and risk, and execute projects optimally to achieve business benefitsfrom the new solutions as quickly as possible. This paper explores our disappointingproject performance track record, the nature of twenty-first century projects, the need fora central focus on business analysis as a critical component of organizational transforma-tion, and the role of a business analysis center of excellence in organizations.

Introduction

In the twenty-first century, business processes have become more complex; that is, moreinterconnected, interdependent, and interrelated than ever before. In addition, business-

es today are rejecting traditional organizational structures to create complex communitiescomprised of alliances with strategic suppliers, outsourcing vendors, networks of custom-ers, and partnerships with key political groups, regulatory entities, and even competitors.Through these alliances, organizations are addressing the pressures of unprecedentedchange, global competition, time-to-market compression, rapidly changing technologies,and increasing complexity at every turn. Since business systems are significantly morecomplex than ever, projects that implement new business systems are also more complex.


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To reap the rewards of significant, large-scale busi-ness transformation initiatives designed to not onlykeep organizations in the game but make them amajor player, we must be able to manage complexbusiness transformation projects. However, hugecost and schedule overruns have been commonplace

in the past.1 Looking at the numbers, our pastproject performance record is troubling:

$80-145 billion per year is spent on failed andcancelled projects (The Standish Group Inter-national, Inc.)

25%-40% of all spending on projects is wastedas a result of re-work (Carnegie Mellon)

50% are rolled back out of production(Gartner)

40% of problems are found by end users(Gartner)

Poorly defined applications have led to a per-sistent miscommunication between businessand IT that largely contributes to a 66% proj-ect failure rate for these applications, costingU.S. businesses at least $30 billion every year(Forrester Research)

We estimate that 60%-80% of project failurescan be attributed directly to poor requirements

gathering, analysis, and management (MetaGroup)

Nearly two thirds of all IT projects fail or runinto trouble (refer to Figure 1 for the results ofthe 2006 CHAOS Survey)the trend is goingin the right direction (the 2004 Chaos Reportsuggested that nearly three fourths of projectsare failed or challenged); however, we mustfind better methods to manage critical businessprojects in the twenty-first century

1 New York Times, 11 July 2002 Cost overruns(totaling hundreds of billions of dollars) for largepublic works projects have stayed largely constant formost the last century.

Twenty-First Century Projects

Virtually all organizations of any size are invest-

ing in large-scale transformation of one kind oranother. Contemporary projects are about addingvalue to the organization through breakthroughideas, optimizing business processes, and usinginformation technology (IT) as a competitiveadvantage. These initiatives are often spawnedby mergers or acquisitions, new strategies, globalcompetition, or the emergence of new technologies.Other initiatives are launched to implement new orreengineered business systems to drive waste outof business operations. Most of these changes areaccompanied by organizational restructurings, newpartnerships, cultural transformation, downsizingor right-sizing, and enabling IT systems. Othersinvolve implementing new lines of business andnew ways of doing business (e.g., e-business) . Inaddition to these business-driven changes, IT or-ganizations are transforming themselves, strivingto become more service oriented and better alignedwith the business. In the twenty-first century, proj-ect teams are no longer dealing with IT projectsin isolation, but with the overarching process ofbusiness transformation; when the reach of change

affects all areas of the organization and beyond tocustomers, suppliers, and business partners makingthe complexity of projects considerable.

There are various dimensions of project complex-ity, one or all of which can be present on large-scalechange projects. Projects today are comprised oflarge, multi-layered, geographically dispersed and

65%

46%Over Time or Budget

19%Failed

35%

Succeeded

Figure 1: Project Performance Track Record developed from The Standish Groups 2006 Chaos

Report results


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multi-cultural teams. Projects are too long in dura-tion to be free from changing business needs. Proj-ects frequently have inflexible schedules, budgets,and scope. All too often, projects have ambiguous,unstable, and poorly understood requirements.The very nature of projects today and their stra-

tegic importance to the organization makes themhighly visible, politically charged, and riddled withconflicting expectations. Large-scale organiza-tional change involves inter-project dependencies,cultural sensitivity, and often unproven technology.Managing complex business projects requires a newkind of knowledge, skill, and ability, and a muchstronger focus on the business versus the technology.Consequently, the role of business analysis is quick-ly becoming central to successfully manage businesstransformation projects.

Emerge the Business Analysis

Center of Excellence

Centers of excellence are emerging as a vital strate-gic asset to serve as the primary vehicle for manag-ing complex change initiatives, a business supportfunction just as critical as accounting, marketing,finance and HR. A center of excellence, as de-fined by Jonathan Geiger, is a team of people thatis established to promote collaboration and the ap-plication of best practices.2 Centers of excellenceexist to bring about an enterprise focus to manybusiness issues, for example, data integration, proj-ect management, enterprise architecture, businessand IT optimization, and enterprise-wide access toinformation. The concept of centers of excellence(CoE) is quickly maturing in twenty-first centuryorganizations because of the need to collaborativelydetermine solutions to complex business issues.Project management offices (PMO), a type of CoE,proliferated in the 1990s as a centralized approachto managing projects, in response to the challenges

associated with complex projects in an environmentwith low levels of project management maturity

2 Geiger, Jonathan G. Intelligent Solutions: Establishinga Center of Excellence. BIReview: March 20, 2007.Retrieved from the Internet 29 March 2007. www.bireview.com/article.cfm?articleid=222

and governance. Industry leaders are effectively us-ing various types of CoEs.

Hewlett-Packard Centers of

Excellence3

HP uses the CoE model when implementing large-scale organizational change for their clients, forexample, a service oriented architecture (SOA).SOA is a breakthrough software design techniquethat allows the development of smaller services(groups of software components that perform busi-ness processes). The services are then hooked to-gether with other services to perform larger tasks.The services are loosely coupled, have an indepen-dent interface to the core system, and are reusable.Web services, one of the important strategies to

increase business and reduce transaction costs, arean example of SOA. SOA represents a transforma-tion in how businesses and IT develop business so-lutions. It is an effort to drive down the total costof ownership of IT systems, thus freeing scarceresources to develop innovative IT applications andinfrastructures (Davis, 2).

HP describes their centers of excellence as a criti-cal component of large-scale organizational change.HP looks upon their SOA CoEs as a swat teamthat is fully focused on implementing the reusable

service-oriented components and infrastructure.HP sites the benefits of their SOA CoEs as manyof the same benefits we seek from BACoEs, includ-ing:

Establishing enterprise standards, procedures,governance

Standardizing infrastructure, developmentmethods, and operational procedures

Increasing business agility, that is, the ability toadapt quickly as the environment changes

Reducing risk, complexity, redundancy, and

support complexity

3 Davis, Mark Frederick. SOA: Providing Flexibility forthe Health and Science Industry. July 2006. Retrievedfrom the Internet 29 March 2007. http://h20247.www2.hp.com/publicsector/downloads/Technology_Davis_VB.pdf


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Aligning business and IT

Enabling re-use and faster time-to-market

Presenting one face to the customer(Davis 16-20)

IBM Centers of ExcellenceIBM is also heavily invested in CoEs. The IBMproject management CoE is dedicated to definingand executing the steps needed to strengthen itsproject management capabilities. The IBM PM-CoE strives to combine external industry trendswith their internal insight to develop project man-agement policy, practices, methods and tools. TheIBM PMCoE has experienced such success that in2006 IBM announced creation of new centers ofexcellence to help customers better use informa-

tion. At the centers, IBM software and serviceexperts will develop six new solution portfoliosincluding: business analysis and discovery, masterdata management, business process innovation,risk and compliance, workforce productivity andbusiness performance and process managementall focusing in improving business performance.These centers will develop products and services tobetter implement business analysis practices. Theirgoal is to help organizations transform informationfrom utility for running the business to a competi-tive asset.4

Business Analysis Centers of

Excellence

Clearly, centers of excellence are becoming in-valuable to successful management of large-scalechange. The business analysis center of excellence(BACoE) then, is an emerging best practice, a newtype of center which serves as the single point ofcontact for business analysis practices. In that role,the BACoE defines the business rules, processes,

knowledge, skills and competencies, and tools usedby the organization to perform business analysisactivities throughout the business solution life

4 Andrews, Chris. IBM Initiative to Capture NewGrowth Opportunities in Information Management. 16Feb 2006 press release. Retrieved from the Internet29 March 2007. www-03.ibm.com/press/us/en/pressrelease/19249.wss

cycle, from strategic planning to project initiationto solution delivery and benefits realization, andfinally, solution deactivation. As the discipline ofbusiness analysis becomes professionalized, it is nosurprise that business analysis centers of excellenceare now emerging. Staffed with knowledgeable

business and IT teams, these centers are fulfillinga vital need in organizations todayproviding abusiness-focused home for current business analy-sis practices, technologies, and emerging trends.The BACoE serves as an internal consultant andinformation broker to both the project teams andto the executive management team. In addition,the BACoE is responsible for continuous improve-ment of business analysis practices. To that end,the BACoE continually evaluates the maturity ofbusiness analysis and implements improvements to

overall business analysis capability.

BMO Financial Group Business

An al ys is Cent er of Comp et en cy

There are several BACoEs in the formative stages.One successful implementation is at the Bank ofMontreal (BMO). Kathleen Barrett, senior busi-ness consultant at BOM Financial Group andpresident of International Institute of BusinessAnalysis, explained the 2003 BMO Financial GroupBusiness Analysis Center of Competency during her

lecture The Professionalization of RequirementsManagement.5 By October 2003, the center hadconducted a current state assessment, developed,piloted, and released their business analysis processstandard, and received ISO certification; by 2005,their business analysis training and accreditationprogram was rolled out. Kathleen lists these ascritical to the successful implementation of theBMO BA Center of Competency:

Identify specific goals and deadlines (e.g., ISOcertification by October 2003)

5 Kathleen Barrett gave a presentation on the successfulBank of Montreal Center of Competency at aBusiness Analysis World Conference in Washington,D.C., in June 2006. For more information on theBusiness Analysis World Symposium Series andother events, go to www.business analystworld.com(accessed August 23, 2007).


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Treat the CoE implementation effort like aproject; create a formal project team with asteering committee

Ensure senior executive support and enforce-ment of new practices

Link outcomes to performance pay

Adopt a formal approach to measure andevaluate compliance to standards

Involve all stakeholder areas; include everyone,overlook no one

Adopt best practices from within theorganization

Provide process training to all practitioners

and team members

Communicate at multiple levels, in words thatmean something to each group

BACoE Scope Considerations

Center of Requirements Excellence

There are several different flavors of BACoEs.Some organizations are focused across the entire

project life cycle, while others focus more narrowlyon requirements engineering. A center of require-mentsexcellence serves to improve skills required forrequirements elicitation, analysis, specification, andvalidation. This approach is often used as a firstphase of BACoE implementation. However, a trulycomprehensive BACoE is broadly scoped to includethe services, functions, tools and metrics to en-sure the organization invests in the most valuableprojects, and then delivers the expected businessbenefits from project outcomes. Refer to Figure 2:

BACoE Function Chart for a summary of typicalBACoE responsibilities.

One of the critical BACoE functions is benefitsmanagement, a continuous process of identifying

Figure 2: BACoE Function Chart

BA

Standards

BA

Development

BA

Services

Full Cycle

Governance

BACoE

Functions

Practices and

methodologies

Tools

Performance metrics

Knowledge

management

Performance reporting

Continuous

improvements

Skill assessments

Education and training

Mentoring and OTJ

training

Team building

BA Career Path:

Positiondescriptions

Grades

Competencies

Skill requirements

Competitive analysis

Business architecture

Feasibility studies

Business case

Project investment

decision package

Staff Augmentation: Requirements analysts

V&V specialists

Workshop facilitators

Business program

analysis

Strategic project

BA resources

Portfolio

management

team process

support andfacilitation

Benefits

management


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new opportunities, envisioning results, implement-ing, checking intermediate results, and dynamicallyadjusting the path leading from investments tobusiness results. Therefore, the role of the enter-prise BACoE is multidimensional, including (1)providing thought leadership for all initiatives to

confirm that the organizations business analysisstandards are maintained and adhered to, (2) con-ducting feasibility studies and prepare businesscases for proposed new projects, (3) participatingin all strategic initiatives by providing expert busi-ness analysis resources, and (4) conducting benefitsmanagement to ensure strategic change initiativesprovide the value that was expected. The BACoEis staffed with business and technology experts,who can act as a central point of contact to facili-tate collaboration among the lines of business and

the IT groups.

Strategic BACoE

A fully functioning BACoE is capable of provid-ing services across the gamut of business analysispractices. The BACoE mission and objectives aremet through training, consulting and mentoringbusiness analysts and project team members, byproviding BA resources to the project teams, by fa-cilitating the portfolio management process, and byserving as the custodian of BA best practices. The

strategic BACoE generally performs all or a subsetof the following services.

BA standards provides standard businessanalysis practices

Methods defines the methodology, metricsand tools for use on all strategic projectswithin the organization

Knowledge management maintains thecentral historical data base of business analy-sis standard tools, processes and businessarchitecture components

Continuous improvement periodi-cally evaluates the maturity of the businessanalysis practices within the organization,and implements improvements to policies,processes, tools and procedures

BA development provides professional devel-opment for business analysts

BA career path along with the Hu-man Resources Department, designs andmaintains the business analyst competency

model including titles, position descriptions,functions

Coaching and mentoring provides men-toring services to business analysts and proj-ect teams to help them meet the challengesof their current project

Training and professional development provides formal skills and knowledge as-sessments, and education and training forthe professional development of business

analystsTeam building provides team buildingexperiences to project managers, businessanalysts, and team members

BA services serves as a group of facilitatorsand on-the-job trainers who are skilled andaccomplished business analysts to provide busi-ness analysis consulting support including:

Conducting market research, benchmark,and feasibility studies

Developing and maintaining the businessarchitecture

Preparing and monitoring the business case

Eliciting, analyzing, specifying, documenting,validating, and managing requirements

Managing requirements verification andvalidation activities, for example, the useracceptance test

Preparing the organization for deploymentof a new business solution

Providing resources to augment projectteams to perform business analysis activitiesthat are under-resourced or urgent


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Full cycle governance promotes a fulllife-cycle governance process, managing invest-ments in business solutions from research anddevelopment to operations; provides a home(funding and resources) for pre-project busi-ness analysis and business case development

Business program management workswith management and the portfolio man-agement team to implement a twenty-firstcentury model that transitions organizationsfrom stand-alone IT project management tobusiness program management

Strategic project resources provides se-nior-level business analysts to lead the busi-ness analysis effort for strategic initiatives

Portfolio management

provides processcoordination and meeting facilitation to theportfolio management team

Enterprise analysis prepares the projectinvestment decision package consisting ofthe business case, the results of studies,and other supporting information thatprovides senior management with a clearunderstanding of what business results areto be achieved through a major investment,including the contribution from IT to those

results

Benefits management measures thebusiness benefits achieved by new businesssolutions; facilitates the adoption of a sharedvision of the benefits realization process,managing the investment throughout theproject life cycle and after the solution hasbeen delivered; ensures that the total cost ofownership (TCO) is understood and mea-sured. TCO is the full life cycle product cost,including the cost to build or buy, deploy,

support, maintain, and service the solutionin both the business and the IT operations

BACoE Organizational Alignment

Considerations

Although the BACoE is by definition business fo-cused, it is of paramount importance for successful

CoEs to operate in an environment where busi-ness operations and IT are aligned and in synch.In addition, the disciplines of project management,software engineering, and business analysis must beintegrated. Therefore, to achieve a balanced per-spective, it is important to involve business opera-

tions, IT (enterprise architects, database managers,infrastructure support teams, service level manag-ers, capacity and availability managers, and applica-tion developers), PMO representatives and projectmanagers, and representatives from the projectgovernance group in the design of the BACoE.Indeed, your organization may already have oneor more centers of excellence. If that is the case,consideration should be made to combining theminto one centralized center focused on program andproject excellence. The goal is for a cross-function-

al team of experts (business visionaries, technologyexperts, project managers, and business analysts)to address the full solution life cycle from businesscase development to continuous improvement andsupport of the solution for all major projects.

High-Velocity Organizational Change

One of the golden rules of organizational changemanagement is to combine the change efforts thataffect a business process together under one coor-dinated initiative. Consider the potential changes

that most contemporary organizations are under-going concurrently.

The executive team may be attempting toimplement or improve a portfolio manage-ment process to select, prioritize, resource, andmanage critical strategic projects. In addition,management may be implementing a newcorporate scorecard to measure organizationalperformance.

For enterprise-wide projects impacting several

business units, some or all of the business unitsmay be implementing improvements to thesame business processes that will be changedby the larger change initiative.

The IT application development and infrastruc-ture groups may be undergoing large-scalechange, for example, implementing a service-


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oriented architecture (SOA), or a differentsoftware development life cycle methodology,such as RUP (Rational Unified Process) orAgile development.

The IT infrastructure support team may be

implementing ITIL, (Information TechnologyInfrastructure Library), an internationallyrecognized best practice framework for thedelivery of quality IT Service Management(ITSM). ITIL focuses on continuous improve-ments to IT processes to optimize servicequality. ITIL is the most comprehensive andwidely used ITSM framework.

The IT enterprise architects may be implement-ing a new framework to develop the business,information, technology, application, and secu-

rity architectures. An architecture frameworkis a model that is used for developing archi-tectures, describing a method for designing anenterprise. The frameworks provide standards,tools, and common language, bringing orderand structure to the architectural elements. Anumber of enterprise architecture frameworksexist (e.g. , The Zachman Framework, ThePOLDAT Framework, Open Group Archi-tecture Framework), but an accepted industrystandard has not yet emerged.

The PMO may be implementing a new projectmanagement methodology, tool, or practices.

Coordination and Alignment of

Change Activities

Clearly, these change initiatives must somehow becoordinated to optimize the return on the improve-ment efforts. CoEs that support centralized fulllife cycle governance provides the framework forthe benefits realization process from the concep-

tion of projects to the harvesting of the benefits.Centralized governance also provides a process ofprogressive resource commitment in which resourc-es are allocated to programs in small incrementsthrough stage gates. It stands to reason, then, that acentralized center of excellence would improve themanagement and coordination of strategic changeinitiatives.

BACoE Organizational Positioning

Considerations

Understanding the business drivers behind estab-lishing the CoE is of paramount importance. Themotive behind establishing the center must be un-

ambiguous, since it will serve as the foundation toestablish the purpose, objectives, scope, and func-tions of the center. The desire to set up a BACoEmight have originated in IT, because of the numberof strategic, mission-critical IT projects impactingthe whole organization, or in a particular busi-ness area that is experiencing a significant level ofchange. Whatever the genesis, strive to place thecenter so that it serves the entire enterprise, not

just IT or a particular business area. Consider Fig-ure 3, a model to centralize a CoE integrating the

project management, business analysis and qualityassurance disciplines.

One of the biggest challenges for the BACoE is tobridge the gap that divides business and IT. Todo so, the BACoE must deliver multidimensionalservices to the diverse groups mentioned above.Regardless of whether there is one CoE, or severalmore narrowly focused models, the CoE organiza-tion should be centralized.

Organizations with centralized CoEs

have better consistency and coordina-tion, leading directly to less duplicationof effort. These organizations configureand develop their IT systems by busi-ness process or functional area ratherthan by business unit, leading to moreefficient and more streamlined systemsoperations.6

Best-in-class CoEs evaluate the impact of proposedchanges on all areas of the business and effectively

6 2006 USAG/SAP Best Practices Survey: Centersof Excellence: Optimize Your Business and ITValue. SAP America Inc. Published February 16,2007. Retrieved from the Internet 28 March 2007.12939_17599_21450_Centers_of_Excellence__Optimize_Your_Business_and_IT_Value_(2006_ASUG_SAP_Best_Practices_Survey)


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allocate resources and support services according tobusiness priorities.

Positioning is equated with authority in organi-zational structures; the higher the placement, themore autonomy, authority and responsibility islikely to be bestowed on the center. Therefore,positioning the center at the highest level possibleprovides the measure of autonomy necessary toextend the authority across the organization whilesubstantiating the value and importance the func-tion has in the eyes of executive management.7 Inabsence of high-level positioning, the success andimpact of the center will likely be significantly di-minished. Look upon the CoE as another shared

7 Bolles, Dennis PMP. Building Project ManagementCenters of Excellence. New York, NY: AmericanManagement Association. 2002

services unit providing support across the enter-prise, similar to HR, Accounting, and IT.

BACoE Organizational Maturity and

Implementation Considerations

Regardless of the CoE model, the performance ofthe center is somewhat dependent on the maturityof practices in the organization. The centralizedCoE model is important, as are the effectivenessof the strategic planning and project portfoliomanagement practices; the business performance

management processes and strategies; the matu-rity of IT architecture, development, and supportprocesses; and the strength of the business focusacross the enterprise. Clearly, organizations withmore mature practices achieve higher levels of valuefrom their CoEs.

Figure 3: Organizational Integration for CoEs

The Center of

Excellence

support funtion

defines best

practices,

integrates into the

organization, and

monitors for

compliance and

process

improvement

Business

Support

Function

(Risk andCompliance)

Business

Support

Function

(Center ofExcellence)

Line

Business

Line

Business

Line

Business

Line Business

Support

Function

(HumanResources)

Business

Support

Function

(Technology)

Business

Support

Function

(Accounting)

Business

Support

Function

(Sales andMarketing)

Line

Business

Line

BusinessActivity

BusinessActivity

BusinessActivity

Business Support Functions

These business units support business areas of the organization

to deliver the strategic vision and enterprise objectives

Business Area Functions

Line areas are business units of the organizations that are

responsible for generating revenue to the organization

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

BusinessActivity

Project

Manage-ment

BusinessAnalysis

QualityAssurance

BusinessActivity

BusinessActivity

BusinessActivity


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Organizations can absorb a limited amount ofconcurrent change, while maintaining productiv-ity levels, at any given time. Therefore, a gradualapproach to implementing the BACoE is recom-mended. One option is to adopt a three-phasedapproach moving across the BACoE maturity con-tinuum from a project-focused structure to a stra-tegic organizational model. Please refer to Figure 4for a depiction of the BACoE Maturity Model.

Project-Centric

BACoEs are almost always project-centric in theirearly formative phase. The goals of the BACoEat this stage are to build the confidence of andbecome an indispensable resource to the projectteams. During this early phase, the BACoE isbuilding trusting relationships with business ana-lysts, project managers, functional mangers, andproject teams. In addition to developing businessanalysis practice standards, the BACoE is provid-ing services to the project teams, and training andmentoring to develop business analysts and high-performing project teams.

Enterprise Focused

As the BACoE begins to win confidence across theorganization, it is likely that it will evolve into anenterprise-wide resource serving the entire com-pany. At this point, the BACoE begins to facili-

tate the implementation of an effective portfoliomanagement system. The BACoE is building thefoundation to serve as a strategic business assetproviding management with decision support in-formation.

Strategic

During the third stage of development, the BACoEis considered a strategic asset serving the execu-tive team. At this point, it is well understood thatbusiness analysis has a positive effect on profitabil-

ity and that organizations achieve strategic goalsthrough well prioritized and executed projects.Emphasis at this stage is placed on achieving pro-fessionalism in business analysis through the BA-CoE. Strategic activities for the BACoE include:

Conducting research and providing theexecutive team with accurate competitiveinformation

Identifying and recommending viable new busi-ness opportunities

Preparing the project investment decisionpackage to facilitate project selection andprioritization

Managing expected business benefits duringproject execution and measuring actual busi-ness benefits after the new solution is deployed

Phase 1

Project-

Centric

Phase 2

Enterprise

Focus

Phase 3

Strategic

Asset

Limited Influence Strategic Influence

Figure 4: BACoE Maturity Model


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Getting Started

Although there are relatively few BACoEs inexistence today, best practices for developing or-ganizational centers of excellence to manage thebusiness analysis function are emerging. Througha rationale and defined methodology, organiza-tions are identifying the required business analysisknowledge, skills and abilities, assessing their cur-rent business analysis capabilities, and assembling a

team to create the new entity. Based on the historyof best practices for setting up various centers ofexcellence, there is a relatively standard process, in-cluding the steps listed below. Refer to Figure 5 fora depiction of the BACoE Implementation Model.

Visioning and concept definition1.

Assessing the organizational knowledge,2.skills, maturity, and mastery of businessanalysis practices

Establishing BACoE implementation plans:3.

Draft the preliminary scope statement forthe center in terms of disciplines, functions,processes, etc.

Develop a preliminary charter for the center

Prepare for the BACoE Kick-off Workshop

Conduct a BACoE Kick-off Workshop ses-sion to finalize the charter for the center andestablish an implementation plan

Finalizing plans and creating action teams to4.develop and implement the infrastructure forthe center

Step 1: Visioning and ConceptDefinition

Visioning

During the early study phase, it is important tocreate a vision for the new center. This is accom-plished by researching the BACoEs that have al-ready been implemented in organizations, studyingtheir costs, benefits, strengths and weaknesses, anddetermining lessons learned. Create a preliminaryvision and mission statement for the center, anddevelop the concept in enough detail to prepare abusiness case for establishing the center. Vet theproposal with key stakeholders and secure approvalto form a small core team to conduct the assess-ment of business analysis practices and plan for the

Figure 5: BACoE Implementation Model

BA standard practices,tools, and metrics

BA education and

training

BA consulting services

FormBACoE Teams

BACoE Kick-OffWorkshop

BACoE Charter:

Strategic alignment

Scope

Authority

Services

Organization

Budget

ImplementationPlanning

Organizationalreadiness assessment

BA practices maturity

assessment

Individual business

analysts knowledge

and skill assessment

Organizationaland IndividualAssessments

BACoE vision andmission

Executive sponsor

Guidance (steering)

team

Business case

Political management

strategy

Approval to staff BACoE

planning team

Visioning andConcept Definition


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implementation of the BACoE. Key stakeholdersinclude:

The executive you enlist to be the executivesponsor of the BACoE

Directors of existing CoEs in the organization,

including the PMO if it existsThe CIO and IT management team

Executive directors and managers of businessunits undergoing significant change

Executive Sponsorship and

Organizational Buy-In

During meetings with the key stakeholders, securebuy-in and support for the concept. Large-scale or-ganizational change of this nature typically involves

restructurings, cultural transformation, new tech-nologies, and new partnerships. Handling changecan well mean the difference between success andfailure of the effort. Techniques to consider duringthe early study and planning phase include:8

Executive sponsorship A center of excel-lence cannot exist successfully without an ex-ecutive sponsor. Build a trusting, collaborativerelationship with the sponsor, seeking mentor-ing and coaching at every turn.

Political management strategy Conduct ananalysis of key stakeholders to determine thosewho can influence the center, and whetherthey feel positively or negatively about thecenter. Identify the goals of the key stakehold-ers. Assess the political environment. Defineproblems, solutions, and action plans to takeadvantage of positive influences, and to neu-tralize negative ones.

A sense of urgency Work with stakeholdergroups to reduce complacency, fear, and angerover the change, and to increase their sense ofurgency.

8 Kotter, John P. (2002) Getting to the Heart of How toMake Change Happen. Boston, MA: Harvard BusinessSchool Press

The guiding team Build a team of support-ers who have the credibility, skills, connections,reputations, and formal authority to providethe necessary leadership to help shape theBACoE.

The vision Use the guiding team to developa clear, simple, compelling vision for the BA-CoE, and set of strategies to achieve the vision.

Communication for buy-in Execute asimple, straight-forward communication planusing forceful and convincing messages sentthrough many channels. Use the guiding teamto promote the vision whenever possible.

Empowerment for action Use the guidingteam to remove barriers to change, including

disempowering management styles, anti-quated business processes, and inadequateinformation.

Short-term wins Wins create enthusiasmand momentum. Plan the implementation toachieve early successes.

Dependency management The success ofthe center is likely dependent on coordinationwith other groups in the organization. Assignsomeone from your core team as the depen-dency owner, to liaise with each dependentgroup. A best practice is for dependency ownersto attend team meetings of the dependentgroup, so as to demonstrate the importanceof the relationship and to solicit feedback andrecommendations for improvements.

Step 2: Business Analysis

Organizational and Individual

Assessments

Organizational Readiness Assessment

The purpose of the organizational readiness assess-ment is to determine organizational expectationsfor the BACoE and to gauge the cultural readinessfor the change. The BACoE assessment team de-termines where the organization is on the continu-


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um from a stovepipe, function-centric structure, toan enterprise-focused organization. Additionally, itis useful to gather information about best practicesthat are already in place in the organization thatmight serve as a springboard for replication acrossprojects. The assessment also provides the BACoE

planning team with information on key challenges,gaps and issues that should be addressed immedi-ately by the BACoE. The ideal assessment solutionis to conduct a formal organizational maturity as-sessment. However, a less formal assessment maysuffice at this point.

Informal Assessments

As soon as the concept has been approved and thecore BACoE implementation team is in place, con-

duct an assessment to understand and documentthe current state of business analysis practices.The assessment consists of interviews with func-tional managers, business analysts, project manag-ers, and IT professionals. The goal of the assess-ment is to determine organizational readiness toaccept the center, and the current state of:

Business analysts (BA) The individuals cur-rently involved in business analysis practices,including:

Knowledge, skills, and experience

Roles and responsibilities

Organizational placement

Other duties assigned to the BAs

Existence of a BA career path, position de-scriptions, competency model

BA training and professional developmentopportunities

Measures of success and performanceevaluation

Business analysis practices Formal andinformal business analysis methodologies andtechniques

Feasibility study process

Business case development process

Business architecture development standardsor framework

Requirements elicitation, analysis, specifica-

tion, validation, and change managementprocess

Requirements prioritization and traceability

Requirements verification (user acceptancetest) methods

Tools, templates, guidelines

Technology requirements development andarchiving tools:

Powerful modeling tools

Requirements repository and managementsystem

Team collaboration tools

Governance Oversight for project selection,prioritization, and ongoing review:

Review and approval of BA practices

QA function to ensure compliance to BAstandards

Portfolio management team to select andprioritize projects

Benefits management throughout the projectand after solution delivery

Formal Organizational Maturity

As se ss me nt

If the organization is going to invest in a formalmaturity assessment, we recommend conducting

an assessment that not only determines the stateof business analysis, but also the state of projectmanagement and software engineering practices tosecure a complete picture of program and projectmaturity. The CompassBA/PM OrganizationalModel and assessment process developed by Man-agement Concepts is a staged maturity model simi-


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lar to other models used by recognized standardsetting bodies. CompassBA/PM adheres to theproven concepts for effective change that have dem-onstrated success for over a decade, focusing thoseaspects on improving both project managementand business analysis, thus ensuring compatibility

and alignment with the de facto standards avail-able in the information technology (IT) projectimprovement arena.

CompassBA/PM OMM is mapped to industrystandards by establishing specific business analy-sis, project management, and software engineeringpractice goals to be achieved to reach advancedlevels of the model. Refer to Figure 6 for a graphi-cal depiction of the CompassBA/PM OMM. Thepower of the Management Concepts CompassBA/PM OMM comes from the integration of:

The project management knowledge areasdescribed in the Project Management Institute

(PMI) A Guide to the Project ManagementBody of Knowledge (PMBOK Guide), ThirdEdition, defined by its knowledge require-ments and outlined in terms of its componentprocesses, practices, inputs, outputs, tools andtechniques

The key practices embodied in the Interna-tional Institute of Business Analysis (IIBA)Business Analysis Body of Knowledge (BABOKGuide) described in terms of key practices andtechniques

Industry standard models, such as the SEI Ca-pabi lity Maturity Model Integration (CMMI),which identified process areas that represent agroup of best practices that, when performedcollectively, satisfy a set of goals considered im-

portant for making significant improvement inthat area for software and system engineeringare included in the model

Figure 6: CompassBA/PM OMM

Informal

(1)Ad Hoc

Project Documented

Documented

(2)Basic

PM/BA/Integrated

Integrated

(3)Complex

PM/BA/SE

Strategic

(4)PM/BA Strategic

Management Practices

Optimized

(5)Continuous

Improvement

s)NFORMALINCONSISTENTprocesses

s5NSTABLEENVIRONMENTs3CHEDULEANDBUDGET

overruns

s)NTEGRATEDPLANNING

s3COPEANDCONFIGURA-

tion management

s4IMEANDCOSTMONI-

toring and controls3UPPLIERMANAGEMENTs2EQUIREMENTSPLAN-

ning and manage-

ment

s3TANDARDREQUIREMENTS

ELICITATIONANALYSIS

SPECIFICATION66TRACEABILITYCHANGEmanagement practices

s2ISKMANAGEMENT

s1UALITYMANAGEMENTs(2ANDTEAM

management

s)NTEGRATIONmanagement

s#OMMUNICATIONmanagement

s/RGANIZATIONALPM/BA/SE training

s0ERFORMANCEmanagement

s3TRATEGICPLANSGOALSand measures

s#ORPORATESCORECARD

s0ROJECTBENEFITSmanagement

s0ORTFOLIOANDRESOURCEmanagement

s%XECUTIVEOVERSIGHTs"!0-CENTEROF

excellence

s"!0-CAREERPATH

s"!0-PROFESSIONALdevelopment plans

s"!0-PROFESSIONAL

development planss-ENTORINGANDsupport services

s/RGANIZATIONALMATURITYASSESSMENTS

s)MPROVEMENTPROJECTSs0ROJECTAUDITS

s"!0-3%SKILLassessments


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Individual Knowledge and Skill

As se ssme nt s

It is also important to determine the skill level ofexisting business analysts (and project mangers, ifappropriate). The CompassBA/PM Individual

assessment process developed by ManagementConcepts is a formal capabilities assessment ofyour business analysts and project mangers. Theassessment results provide the basis for determin-ing training requirements, professional develop-ment activities, and specific mentoring and coach-ing needs. As with the organizational assessment,the individual assessment benchmarks an individ-ual business analyst or project manager against theindustry standards, the PMBOK Guide and theBABOK Guide.

Step 3: BACoE Implementation

Planning

The BACoE Kick-off Workshop serves as the cap-stone event officially launching the BACoE. Allkey stakeholders should be in attendance to partici-pate in the decision making about the new BACoE.In preparation for the workshop, develop a pre-liminary charter and business plan for the centerthat describes its key elements. Conduct a BACoEKick-off Workshop session to finalize the charter

and plans, and gain consensus on an implementa-tion approach. Refer to Table 1 for a detailed list ofplanning considerations.

Step 4: Finalize Implementation

Planning and Form Teams

After the workshop session, finalize the BACoECharter, and staff the center. Form action teamsto develop business analysis practice standards,provide for education, training, mentoring and

consulting support, and secure the needed facilities,tools, and supplies. Refer to Figure 7 for a typicalBACoE organization. Develop the BACoE BusinessPlan/Operations Guide describing: implementationstrategy, phases, deliverables, milestones; detailed

budget including salaries, training, technology,consulting services; infrastructure requirements,acquisition and installation; BACoE organizationformation and initial orientation and training; andcommunications and risk management plans.

Final Words

Establish a BACoE That Executives

Love and Project Teams Trust

Establishing centers of excellence is difficult, be-cause it destabilizes the sense of balance and powerwithin the organization. Executives are required tomake decisions based on benefits to the enterpriseversus their specific functional area. Functionalmanagers are often afraid of losing their authority

and control over the resources assigned to them.In addition, project team members may be unclearabout their roles and responsibilities, and how theywill be given assignments. These ambiguities maymanifest themselves as resistance to change, andwill pose a risk to a successful implementation.Therefore, it is imperative that robust coordinationand effective communication about how the centerwill affect roles and responsibilities accompaniesthe implementation of the center. Do not underes-timate the challenges that you will encounter. Pay

close attention to organizational change manage-ment strategies and use them liberally. To standup a BACoE that executives love and project teamstrust, make the center indispensable. Providehigh-quality services and support to executives,management, and project teams rather than impos-ing requirements and constraints. Conduct the op-erations of the center and design business analysispractices using lean techniques. Follow the motto:barely sufficient is enough to move on.

BACoE Value to the OrganizationTo establish BACoE to last, you must be able todemonstrate the value the center brings to theorganization. Develop measures of success andreport progress to executives to demonstrate the


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value added to the organization because of the BA-CoE. Typical measures of success include:

Project cost overrun reduction Quantify theproject time and cost overruns prior to theimplementation of the BACoE, and for those

projects that are supported by the BACoE. Ifa baseline measurement is not available in yourorganization, use industry standard bench-marks as a comparison. Other measures mightbe improvements to team member morale andreduction in project staff turnover.

PlanningConsiderations

Description

Strategic Alignment,Vision and Mission

Present the case for the BACoE, and reference the business case for more detailedinformation about cost versus benets of the center.

Assessment Results

Include or reference the results of the assessments that were conducted:

Maturity of the business analysis practicesSummary of the skill assessmentsRecommendations, including training and professional development of BAs andimprovement of business analysis practice standards

Scope

Describe the scope of responsibilities of the BACoE, including:

The professional disciplines guided by the center, (i.e., PM and BA, just BA)The functions the center will performThe processes the center will standardize, monitor and continuously improveThe metrics that will be tracked to determine the success of the center

Authority

Centers of excellence can be purely advisory, or they can have the authority to ownand direct business processes. In practice, centers typically are advisory in some areas,and decision-makers in others. Remember, the organizational placement shouldbe commensurate upon the authority and role of the center. When describing theauthority of the CoE, include the governance structure, i.e., who or what group the CoEwill report to for guidance and approval of activities.

Services

A center of excellence is almost always a resource center, developing and maintaininginformation on best practices and lessons learned, and is often a resource assigningbusiness analysts to projects. Document the proposed role:

Materials to be provided, e.g., reference articles, templates, job aids, tools,procedures, methods, practicesServices, e.g., business case development, portfolio management team support,consulting, mentoring, standards development, quality reviews, workshopfacilitators, and providing business analysis resources to project teams

Organization

Describe the BACoE team structure, management, and operations including:

Positions and their roles, responsibilities, and knowledge and skill requirementsReporting relationshipsLinkages to other organizational entities

Budget and StangLevels

At a high level, describe the proposed budget, including facilities, tools andtechnology, and stang ramp up plans.

ImplementationApproach

Document formation of initial action teams to begin to build the foundationalelements of the center. In addition, describe the organizational placement of thecenter, and the focus initially (i.e., project centric, enterprise focus, or strategic focus).

Table 1: CoE Planning Considerations


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Project time and cost savings Track the num-ber of requirements defects discovered duringtesting and after the solution is in productionprior to the implementation of the BACoE,and for those projects that are supported bythe BACoE. Quantify the value in terms ofreduced re-work costs and improved customersatisfaction.

Project portfolio value Prepare reports for the

executive team that provide the investmentcosts and expected value of the portfolio ofprojects; report actual value new solutionsadd to the organization as compared to theexpected value predicted in the business case.When calculating cost, be sure to use the totalcost of ownership (see above).

Great TeamsYou Ne ed O ne

When staffing the BACoE, establish a small butmighty core team dedicated full-time to the cen-ter, co-located, highly trained, and multi-skilled.Do not over staff the center, as the cost will seemprohibitive. Augment the core teams efforts bybringing in subject matter experts and formingsub-teams as needed. Select team members notonly because of their knowledge and skills, but also

because they are passionate and love to work in achallenging, collaborative environment. Developand use a team operating agreement. Developteam-leadership skills and dedicate efforts to tran-sitioning your group into a high-performing teamwith common values, beliefs, and a cultural founda-tion upon which to flourish.

Figure 7: Typical BACoE Organization

Consulting

Services

Life Cycle

Governance

Manager

BA Services

Manager

BA Professional

Development

Manager

BA Standards

Manager

Administrative

Manager

BACoE

Director

Executive

Sponsor

Methods and toolspecialists tomanage:

Methods, tools,and knowledgemanagement

Performancemetrics

Processimprovement

Business andtechnologyconsultants tomanage:

Strategic programbusiness analysis

Portfoliomanagementprocess andfacilitation

Project investmentbenefitsmanagement

Senior BAs to manage:

Competitive analysis

Businessarchitecture

Feasibility study

Business case

Project investmentdecision package

Senior BAs to

augment projectstaffing:

Requirementsanalysis

V&V specialties

Workshopfacilitators

Training anddevelopmentspecialists tomanage:

Skill assessments

BA education andtraining

Mentoring andOTJ training

Team building

BA career path

Skills database

Administrativesupport to manage:

Budget analysis

Communications

Contracts

Performancereporting

White Paper Business Analysis Center of Excellence v2 2007.pdf

Documents

Transcript of White Paper Business Analysis Center of Excellence v2 2007.pdf