Business Analysis Center of ExcellenceThe Cornerstone of Business Transformation

IntroductionIn the 21st century, business processes have becomemore complex; that is, more interconnected,interdependent, and interrelated than ever before. Inaddition, businesses today are rejecting traditionalorganizational structures to create complexcommunities comprised of alliances with strategicsuppliers, outsourcing vendors, networks of customers,and partnerships with key political groups, regulatoryentities, and even competitors. Through these alliances,organizations are addressing the pressures ofunprecedented change, global competition, time-to-market compression, rapidly changing technologies,and increasing complexity at every turn. Sincebusiness systems are significantly more complex thanever, projects that implement new business systems arealso more complex.

To reap the rewards of significant, large-scale businesstransformation initiatives designed to not only keeporganizations in the game but make them a majorplayer, we must be able to manage complex businesstransformation projects. However, huge cost andschedule overruns have been commonplace in thepast.1 Looking at the numbers, our past projectperformance record is troubling:

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

• 25 to 40 percent of all spending on projects is

wasted as a result of re-work (Carnegie Mellon).

• 50 percent are rolled back out of production (Gartner)

• 40 percent of problems are found by end users(Gartner)

• Poorly defined applications have led to a persistentmiscommunication between business and IT thatlargely contributes to a 66 percent project failure ratefor these applications, costing U.S. businesses atleast $30 billion every year (Forrester Research)

• We estimate that 60 to 80 percent of project failurescan be attributed directly to poor requirementsgathering, analysis, and management (Meta Group)

• Nearly two-thirds of all IT projects fail or run intotrouble (refer to Figure 1 for the results of the 2006CHAOS Survey)—the trend is going in the rightdirection (the 2004 Chaos Report suggested thatnearly three-fourths of projects are failed orchallenged); however, we must find better methods tomanage critical business projects in the 21st century

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Abstract: The fiercely competitive twenty-first centurybusiness environment poses challenges at every turn.Both public and for-profit organizations must be flexibleand adaptable to remain competitive. It is throughsuccessful projects that organizations manage change,deliver new business solutions, and ultimately, achievetheir strategies. However, we continue to struggle tomanage complex business change initiatives.Organizations around the globe are striving to improvetheir business analysis capabilities to drive changesfrom strategic goals, invest in the most valuable

projects—those that deliver the highest value at thelowest cost and risk, and execute projects optimally toachieve business benefits from the new solutions asquickly as possible. This paper explores ourdisappointing project performance track record, thenature of 21st century projects, the need for a centralfocus on business analysis as a critical component oforganizational transformation, and the role of abusiness analysis center of excellence in organizations.

Figure 1. Project Performance Track Record – developed from TheStandish Group’s 2006 Chaos Report results

1 New York Times, 11 July 2002 “Cost overruns (totaling hundreds of billionsof dollars) for large public works projects have stayed largely constant for mostthe last century.”

21st Century ProjectsVirtually all organizations of any size are investing inlarge-scale transformation of one kind or another.Contemporary projects are about adding value to theorganization through breakthrough ideas, optimizingbusiness processes, and using information technology(IT) as a competitive advantage. These initiatives areoften spawned by mergers or acquisitions, newstrategies, global competition, or the emergence ofnew technologies. Other initiatives are launched toimplement new or reengineered business systems todrive waste out of business operations. Most of thesechanges are accompanied by organizationalrestructurings, new partnerships, culturaltransformation, downsizing or right-sizing, andenabling IT systems. Others involve implementingnew lines of business and new ways of doingbusiness (e.g., e-business). In addition to thesebusiness-driven changes, IT organizations aretransforming themselves, striving to become moreservice oriented and better aligned with the business.In the 21st century, project teams are no longerdealing with IT projects in isolation, but with theoverarching process of business transformation; whenthe reach of change affects all areas of theorganization and beyond to customers, suppliers,and business partners making the complexity ofprojects considerable.

There are various dimensions of project complexity,one or all of which can be present on large-scalechange projects. Projects today are comprised oflarge, multi-layered, geographically dispersed andmulti-cultural teams. Projects are too long in durationto be free from changing business needs. Projectsfrequently have inflexible schedules, budgets, andscope. All too often, projects have ambiguous,unstable, and poorly understood requirements. Thevery nature of projects today and their strategicimportance to the organization makes them highlyvisible, politically charged, and riddled withconflicting expectations. Large-scale organizationalchange involves inter-project dependencies, culturalsensitivity, and often unproven technology. Managingcomplex business projects requires a new kind ofknowledge, skill, and ability, and a much strongerfocus on the business versus the technology.Consequently, the role of business analysis is quicklybecoming central to successfully manage businesstransformation projects.

Emerge the BusinessAnalysis Center ofExcellenceCenters of excellence are emerging as a vital strategicasset to serve as the primary vehicle for managingcomplex change initiatives, a business support functionjust as critical as accounting, marketing, finance andHR. “A center of excellence,” as defined by JonathanGeiger, “is a team of people that is established topromote collaboration and the application of bestpractices.”2 Centers of excellence exist to bring aboutan enterprise focus to many business issues, forexample, data integration, project management,enterprise architecture, business and IT optimization,and enterprise-wide access to information. The conceptof centers of excellence (CoE) is quickly maturing in21st century organizations because of the need tocollaboratively determine solutions to complex businessissues. Project management offices (PMO), a type ofCoE, proliferated in the 1990s as a centralizedapproach to managing projects, in response to thechallenges associated with complex projects in anenvironment with low levels of project managementmaturity and governance. Industry leaders areeffectively using various types of CoEs.

Hewlett-Packard Centers of Excellence3

HP uses the CoE model when implementing large-scaleorganizational change for their clients, for example, aservice oriented architecture (SOA). SOA is abreakthrough software design technique that allows thedevelopment of smaller “services” (groups of softwarecomponents that perform business processes). Theservices are then hooked together with other servicesto perform larger tasks. The services are looselycoupled, have an independent interface to the coresystem, and are reusable. Web services, one of theimportant strategies to increase business and reducetransaction costs, are an example of SOA. SOArepresents a transformation in how businesses and ITdevelop business solutions. It is an effort to drive downthe total cost of ownership of IT systems, thus freeingscarce resources to develop innovative IT applicationsand infrastructures (Davis, 2).

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2 Geiger, Jonathan G. Intelligent Solutions: Establishing a Center of Excellence.BIReview: March 20, 2007. Retrieved from the Internet 29 March 2007.www.bireview.com/article.cfm?articleid=222and3 Davis, Mark Frederick. SOA: Providing Flexibility for the Health and ScienceIndustry. July 2006. Retrieved from the Internet 29 March 2007.http://h20247.www2.hp.com/publicsector/downloads/Technology_Davis_VB.pdf

“HP describes their centers of excellence as a criticalcomponent of large-scale organizational change. HPlooks upon their SOA CoEs as a swat team that is fullyfocused on implementing the reusable service-orientedcomponents and infrastructure.” HP sites the benefits oftheir SOA CoEs as many of the same benefits we seekfrom BACoEs, including:

• Establishing enterprise standards, procedures,governance

• Standardizing infrastructure, development methods,and operational procedures

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

• Reducing risk, complexity, redundancy, and supportcomplexity

• 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 IBM projectmanagement CoE is dedicated to defining andexecuting the steps needed to strengthen its projectmanagement capabilities. The IBM PM CoE strives tocombine external industry trends with their internalinsight to develop project management policy,practices, methods and tools. The IBM PMCoE hasexperienced such success that in 2006 IBMannounced creation of new centers of excellence tohelp customers better use information. At the centers,IBM software and service experts will develop six newsolution portfolios including: business analysis anddiscovery, master data management, business processinnovation, risk and compliance, workforceproductivity and business performance and processmanagement—all focusing in improving businessperformance. These centers will develop products andservices to better implement business analysispractices. Their goal is to help organizations transforminformation from utility for running the business to acompetitive asset.4

Business Analysis Centers of ExcellenceClearly, 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 used bythe organization to perform business analysis activitiesthroughout the business solution life wsscycle, fromstrategic planning to project initiation to solutiondelivery and benefits realization, and finally, solutiondeactivation. As the discipline of business analysisbecomes professionalized, it is no surprise thatbusiness analysis centers of excellence are nowemerging. Staffed with knowledgeable business and ITteams, these centers are fulfilling a vital need inorganizations today—providing a business-focusedhome for current business analysis practices,technologies, and emerging trends. The BACoE servesas an internal consultant and information broker toboth the project teams and to the executivemanagement team. In addition, the BACoE isresponsible for continuous improvement of businessanalysis practices. To that end, the BACoE continuallyevaluates the maturity of business analysis andimplements improvements to overall business analysiscapability.

BMO Financial Group Business Analysis Center ofCompetencyThere are several BACoEs in the formative stages. Onesuccessful implementation is at the Bank of Montreal(BMO). Kathleen Barrett, senior business consultant atBMO Financial Group and president of InternationalInstitute of Business Analysis, explained the 2003BMO Financial Group Business Analysis Center ofCompetency during her lecture “The Professionalizationof Requirements Management.”5 By October 2003, thecenter had conducted a current state assessment,developed, piloted, and released their businessanalysis process standard, and received ISOcertification; by 2005, their business analysis trainingand accreditation program was rolled out. Kathleenlists these as critical to the successful implementation ofthe BMO BA Center of Competency:

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

• Treat the CoE implementation effort like a project;create a formal project team with a steeringcommittee

• Ensure senior executive support and enforce-ment ofnew practices

• Link outcomes to performance pay

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4 Andrews, Chris. IBM Initiative to Capture New Growth Opportunities inInformation Management. 16 Feb 2006 press release. Retrieved from theInternet 29 March 2007. www-03.ibm.com/press/us/en/pressrelease/19249.wsscycle

5 Kathleen Barrett gave a presentation on the successful Bank of MontrealCenter of Competency at a Business Analysis World Conference inWashington, D.C., in June 2006. For more information on the BusinessAnalysis World Symposium Series and other events, go to www.businessanalystworld.com (accessed August 23, 2007).

• Adopt a formal approach to measure and evaluatecompliance to standards

• Involve all stakeholder areas; include everyone,overlook no one

• Adopt best practices from within the organization

• Provide process training to all practitioners and teammembers

• Communicate at multiple levels, in words that meansomething to each group

BACoE ScopeConsiderationsCenter of Requirements ExcellenceThere are several different flavors of BACoEs. Someorganizations are focused across the entire project lifecycle, while others focus more narrowly onrequirements engineering. A center of requirementsexcellence serves to improve skills required forrequirements elicitation, analysis, specification, andvalidation. This approach is often used as a first phaseof BACoE implementation. However, a trulycomprehensive BACoE is broadly scoped to include

the services, functions, tools and metrics to ensure theorganization invests in the most valuable projects, andthen delivers the expected business benefits fromproject outcomes. Refer to Figure 2: BACoE FunctionChart for a summary of typical BACoE responsibilities.

One of the critical BACoE functions is benefitsmanagement, a continuous process of identifying newopportunities, envisioning results, implementing,checking intermediate results, and dynamicallyadjusting the path leading from investments to businessresults. Therefore, the role of the enterprise BACoE ismultidimensional, including (1) providing thoughtleadership for all initiatives to confirm that theorganization’s business analysis standards aremaintained and adhered to, (2) conducting feasibilitystudies and preparing business cases for proposednew projects, (3) participating in all strategic initiativesby providing expert business analysis resources, and(4) conducting benefits management to ensurestrategic change initiatives provide the value that wasexpected. The BACoE is staffed with business andtechnology experts, who can act as a central point ofcontact to facilitate collaboration among the lines ofbusiness and the IT groups.

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Figure 2. BACoE Function Chart

Strategic BACoEA fully functioning BACoE is capable of providingservices across the gamut of business analysispractices. The BACoE mission and objectives are metthrough training, consulting and mentoring businessanalysts and project team members, by providing BAresources to the project teams, by facilitating theportfolio management process, and by serving as thecustodian of BA best practices. The strategic BACoEgenerally performs all or a subset of the followingservices.

• BA standards – provides standard business analysispractices

• Methods – defines the methodology, metrics andtools for use on all strategic projects within theorganization

• Knowledge management – maintains the centralhistorical data base of business analysis standardtools, processes and business architecturecomponents

• Continuous improvement – periodically evaluatesthe maturity of the business analysis practices withinthe organization, and implements improvements topolicies, processes, tools and procedures

• BA development – provides professionaldevelopment for business analysts

• BA career path – along with the Human ResourcesDepartment, designs and maintains the businessanalyst competency model including titles, positiondescriptions, functions

• Coaching and mentoring – provides mentoringservices to business analysts and project teams tohelp them meet the challenges of their current project

• Training and professional development – providesformal skills and knowledge assessments, andeducation and training for the professionaldevelopment of business analysts

• Team building – provides team buildingexperiences to project managers, business analysts,and team members

• BA services – serves as a group of facilitators andon-the-job trainers who are skilled and accomplishedbusiness analysts to provide business analysisconsulting support including:

• Conducting market research, benchmark, andfeasibility studies

• Developing and maintaining the businessarchitecture

• Preparing and monitoring the business case

• Eliciting, analyzing, specifying, documenting,validating, and

• Managing requirements verification and validationactivities, for example, the user acceptance test

• Preparing the organization for deployment of anew business solution

• Providing resources to augment project teams toperform business analysis activities that are under-resourced or urgent

• Full cycle governance – promotes a full life-cyclegovernance process, managing investments inbusiness solutions from research and development tooperations; provides a home (funding and resources)for pre-project business analysis and business casedevelopment

• Business program management – works withmanagement and the portfolio management team toimplement a 21st century model that transitionsorganizations from stand-alone IT projectmanagement to business program management

• Strategic project resources – provides senior-levelbusiness analysts to lead the business analysis effortfor strategic initiatives

• Portfolio management – provides processcoordination and meeting facilitation to the portfoliomanagement team

• Enterprise analysis – prepares the projectinvestment decision package consisting of thebusiness case, the results of studies, and othersupporting information that provides seniormanagement with a clear understanding of whatbusiness results are to be achieved through a majorinvestment, including the contribution from IT to thoseresult

• Benefits management – measures the businessbenefits achieved by new business solutions; facilitatesthe adoption of a shared vision of the benefitsrealization process, managing the investmentthroughout the project life cycle and after the solutionhas been delivered; ensures that the total cost ofownership (TCO) is understood and measured. TCO isthe full life cycle product cost, including the cost to buildor buy, deploy, support, maintain, and service thesolution in both the business and the IT operations.

BACoE OrganizationalAlignmentConsiderationsAlthough the BACoE is by definition business focused,it is of paramount importance for successful CoEs tooperate in an environment where business operations

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and IT are aligned and in synch. In addition, thedisciplines of project management, softwareengineering, and business analysis must be integrated.Therefore, to achieve a balanced perspective, it isimportant to involve business operations, IT (enterprisearchitects, database managers, infrastructure supportteams, service level managers, capacity andavailability managers, and application developers),PMO representatives and project managers, andrepresentatives from the project governance group inthe design of the BACoE. Indeed, your organizationmay already have one or more centers of excellence. Ifthat is the case, consideration should be made tocombining them into one centralized center focused onprogram and project excellence. The goal is for across-functional team of experts (business visionaries,technology experts, project managers, and businessanalysts) to address the full solution life cycle frombusiness case development to continuous improvementand support of the solution for all major projects.

High-Velocity Organizational ChangeOne of the golden rules of organizational changemanagement is to combine the change efforts thataffect a business process together under onecoordinated initiative. Consider the potential changesthat most contemporary organizations are undergoingconcurrently.

• The executive team may be attempting to implementor improve a portfolio management process to select,prioritize, resource, and manage critical strategicprojects. In addition, management may beimplementing a new corporate scorecard to measureorganizational performance.

• For enterprise-wide projects impacting severalbusiness units, some or all of the business units maybe implementing improvements to the same businessprocesses that will be changed by the larger changeinitiative.

• The IT application development and infrastructuregroups may be undergoing large-scale change, forexample, implementing a service-orientedarchitecture (SOA), or a different softwaredevelopment life cycle methodology, such as RUP(Rational Unified Process) or Agile development.

• The IT infrastructure support team may beimplementing ITIL, (Information TechnologyInfrastructure Library), an internationally recognizedbest practice framework for the delivery of quality IT

Service Management (ITSM). ITIL focuses oncontinuous improvements to IT processes to optimizeservice quality. ITIL is the most comprehensive andwidely used ITSM framework.

• The IT enterprise architects may be implementing anew framework to develop the business, information,technology, application, and security architectures.An architecture framework is a model that is used fordeveloping architectures, describing a method fordesigning an enterprise. The frameworks providestandards, tools, and common language, bringingorder and structure to the architectural elements. Anumber of enterprise architecture frameworks exist(e.g., The Zachman Framework, The POLDATFramework, Open Group Architecture Framework),but an accepted industry standard has not yetemerged.

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

Coordination and Alignment of Change ActivitiesClearly, these change initiatives must somehow becoordinated to optimize the return on the improvementefforts. CoEs that support centralized full life cyclegovernance provide the framework for the benefitsrealization process from the conception of projects tothe harvesting of the benefits. Centralized governancealso provides a process of progressive resourcecommitment in which resources are allocated toprograms in small increments through stage gates. Itstands to reason, then, that a centralized center ofexcellence would improve the management andcoordination of strategic change initiatives.

BACoE OrganizationalPositioningConsiderations 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 functionsof the center. The desire to set up a BACoE might haveoriginated in IT, because of the number of strategic,mission-critical IT projects impacting the wholeorganization, or in a particular busi-ness area that is

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experiencing a significant level of change. Whateverthe genesis, strive to place the center so that it servesthe entire enterprise, not just IT or a particular businessarea. Consider Figure 3, a model to centralize a CoEintegrating the project management, business analysisand quality assurance disciplines.

One of the biggest challenges for the BACoE is tobridge the gap that divides business and IT. To do so,the BACoE must deliver multidimensional services tothe diverse groups mentioned above. Regardless ofwhether there is one CoE, or several more narrowlyfocused models, the CoE organiza-tion should becentralized.

“Organizations with centralized CoEs have betterconsistency and coordination, leading directly to lessduplication of effort. These organizations configureand develop their IT systems by business process or

functional area rather than by business unit, leading tomore efficient and more streamlined systemsoperations.”6

Best-in-class CoEs evaluate the impact of proposedchanges on all areas of the business and effectivelyallocate resources and support services according tobusiness priorities.

Positioning is equated with authority in organizationalstructures; the higher the placement, the moreautonomy, authority and responsibility is likely to bebestowed on the center. Therefore, positioning the

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Figure 3. Organizational Integration for CoEs

6 2006 USAG/SAP Best Practices Survey: Centers of Excellence: OptimizeYour Business and IT Value. 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)

center at the highest level possible provides the“measure of autonomy necessary to extend theauthority across the organization while substantiatingthe value and importance the function has in the eyesof executive management.”7 In absence of high-levelpositioning, the success and impact of the center willlikely be significantly diminished. Look upon the CoE asanother shared services unit providing support acrossthe enterprise, similar to HR, Accounting, and IT.

BACoE OrganizationalMaturity andImplementationConsiderations Regardless of the CoE model, the performance of thecenter is somewhat dependent on the maturity ofpractices in the organization. The centralized CoEmodel is important, as are the effectiveness of thestrategic planning and project portfolio managementpractices; the business performance managementprocesses and strategies; the maturity of ITarchitecture, development, and support processes; andthe strength of the business focus across the enterprise.Clearly, organizations with more mature practicesachieve higher levels of value from their CoEs.

Organizations can absorb a limited amount ofconcurrent change, while maintaining productivitylevels, 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

continuum from a project-focused structure to astrategic organizational model. Please refer to Figure 4for a depiction of the BACoE Maturity Model.

Project-CentricBACoEs are almost always project-centric in their earlyformative phase. The goals of the BACoE at this stageare to build the confidence of and become anindispensable resource to the project teams. Duringthis early phase, the BACoE is building trustingrelationships with business analysts, project managers,functional mangers, and project teams. In addition todeveloping business analysis practice standards, theBACoE is providing services to the project teams, andtraining and mentoring to develop business analystsand high-performing project teams.

Enterprise FocusedAs the BACoE begins to win confidence across theorganization, it is likely that it will evolve into anenterprise-wide resource serving the entire company.At this point, the BACoE begins to facilitate theimplementation of an effective portfolio managementsystem. The BACoE is building the foundation to serveas a strategic business asset providing managementwith decision support information.

StrategicDuring the third stage of development, the BACoE isconsidered a strategic asset serving the executiveteam. At this point, it is well understood that businessanalysis has a positive effect on profitability and thatorganizations achieve strategic goals through wellprioritized and executed projects. Emphasis at thisstage is placed on achieving professionalism inbusiness analysis through the BACoE. Strategicactivities for the BACoE include:

• Conducting research and providing the executiveteam with accurate competitive information

• Identifying and recommending viable new businessopportunities

• Preparing the project investment decision package tofacilitate project selection and prioritization

• Managing expected business benefits during projectexecution and measuring actual business benefitsafter the new solution is deployed

Getting StartedAlthough there are relatively few BACoEs in existencetoday, best practices for developing organizationalcenters of excellence to manage the business analysisfunction are emerging. Through a rationale and

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7 Bolles, Dennis PMP. Building Project Management Centers of Excellence.New York, NY: American Management Association. 2002

Figure 4. BACoE Maturity Model

defined methodology, organizations are identifying therequired business analysis knowledge, skills andabilities, assessing their current business analysiscapabilities, and assembling a team to create the newentity. Based on the history of best practices for settingup various centers of excellence, there is a relativelystandard process, including the steps listed below.Refer to Figure 5 for a depiction of the BACoEImplementation Model.

1. Visioning and concept definition

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

3. Establishing BACoE implementation plans:

• Draft the preliminary scope statement for the centerin 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 session tofinalize the charter for the center and establish animplementation plan

4. Finalizing plans and creating action teams todevelop and implement the infrastructure for thecenter

Step 1: Visioning andConcept DefinitionVisioningDuring the early study phase, it is important to create avision for the new center. This is accomplished byresearching the BACoEs that have already beenimplemented in organizations, studying their costs,benefits, strengths and weaknesses, and determininglessons learned. Create a preliminary vision andmission statement for the center, and develop theconcept in enough detail to prepare a business casefor establishing the center. Vet the proposal with keystakeholders and secure approval to form a small coreteam to conduct the assessment of business analysispractices and plan for the implementation of theBACoE. Key stakeholders include:

• The executive you enlist to be the executive sponsorof the BACoE

• Directors of existing CoEs in the organization,including the PMO if it exists

• The CIO and IT management team

• Executive directors and managers of business unitsundergoing significant change

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Figure 5. BACoE Implementation Model

Executive Sponsorship and Organizational Buy-InDuring meetings with the key stakeholders, secure buy-in and support for the concept. Large-scaleor-ganizational change of this nature typically involvesrestructurings, cultural transformation, new tech-nologies, and new partnerships. Handling change canwell mean the difference between success and failureof the effort. Techniques to consider during the earlystudy and planning phase include:8

• Executive sponsorship – A center of excellencecannot exist successfully without an executive sponsor.Build a trusting, collaborative relationship with thesponsor, seeking mentoring and coaching at everyturn.

• Political management strategy – Conduct an analysisof key stakeholders to determine those who caninfluence the center, and whether they feel positively ornegatively about the center. Identify the goals of thekey stakeholders. Assess the political environment.Define problems, solutions, and action plans to takeadvantage of positive influences, and to neutralizenegative ones.

• A sense of urgency – Work with stakeholder groupsto reduce complacency, fear, and anger over thechange, and to increase their sense of urgency.

• The guiding team – Build a team of supporters whohave the credibility, skills, connections, reputations,and formal authority to provide the necessaryleadership to help shape the BACoE.

• The vision – Use the guiding team to develop aclear, simple, compelling vision for the BACoE, andset of strategies to achieve the vision.

• Communication for buy-in – Execute a simple,straight-forward communication plan using forcefuland convincing messages sent through manychannels. Use the guiding team to promote the visionwhenever possible.

• Empowerment for action – Use the guiding team toremove barriers to change, including disempoweringmanagement styles, antiquated business processes,and inadequate information.

• Short-term wins – Wins create enthusiasm andmomentum. Plan the implementation to achieve earlysuccesses.

• Dependency management – The success of thecenter is likely dependent on coordination with othergroups in the organization. Assign someone fromyour core team as the dependency owner, to liaise

with each dependent group. A best practice is fordependency owners to attend team meetings of thedependent group, so as to demonstrate theimportance of the relationship and to solicit feedbackand recommendations for improvements.

Step 2: BusinessAnalysisOrganizational andIndividual AssessmentsOrganizational Readiness AssessmentThe purpose of the organizational readiness assess-ment is to determine organizational expectations forthe BACoE and to gauge the cultural readiness for thechange. The BACoE assessment team determineswhere the organization is on the continuum from astovepipe, function-centric structure, to an enterprise-focused organization. Additionally, it is useful to gatherinformation about best practices that are already inplace in the organization that might serve as aspringboard for replication across projects. Theassessment also provides the BACoE planning teamwith information on key challenges, gaps and issuesthat should be addressed immediately by the BACoE.The ideal assessment solution is to conduct a formalorganizational maturity assessment. However, a lessformal assessment may suffice at this point.

Informal AssessmentsAs soon as the concept has been approved and thecore BACoE implementation team is in place, conductan assessment to understand and document the currentstate of business analysis practices. The assessmentconsists of interviews with functional managers,business analysts, project managers, and ITprofessionals. The goal of the assessment is todetermine organizational readiness to accept thecenter, and the current state of:

• Business analysts (BA) – The individuals currentlyinvolved 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

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8 Kotter, John P. (2002) Getting to the Heart of How to Make ChangeHappen. Boston, MA: Harvard Business School Press

• Measures of success and performance evaluation

• Business analysis practices – Formal and informalbusiness analysis methodologies and techniques

• Feasibility study process

• Business case development process

• Business architecture development standards orframework

• Requirements elicitation, analysis, specification,validation, and change management process

• Requirements prioritization and traceability

• Requirements verification (user acceptance test)methods

• Tools, templates, guidelines

• Technology – requirements development andarchiving tools:

• Powerful modeling tools

• Requirements repository and management system

• Team collaboration tools

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

• Review and approval of BA practices

• QA function to ensure compliance to BA standards

• Portfolio management team to select and prioritizeprojects

• Benefits management throughout the project andafter solution delivery

Formal Organizational Maturity AssessmentIf the organization is going to invest in a formalmaturity assessment, we recommend conducting anassessment that not only determines the state ofbusiness 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 similarto other models used by recognized standard settingbodies. CompassBA/PM™ adheres to the provenconcepts for effective change that have demonstratedsuccess for over a decade, focusing those aspects onimproving both project management and businessanalysis, thus ensuring compatibility and alignmentwith the de facto standards available in theinformation technology (IT) project improvement arena.

CompassBA/PM™ OMM is mapped to industrystandards by establishing specific business analysis,project management, and software engineeringpractice goals to be achieved to reach advancedlevels of the model. Refer to Figure 6 for a graphicaldepiction of the CompassBA/PM™ OMM. The powerof the Management Concepts’ CompassBA/PM™OMM comes from the integration of:

• The project management knowledge areas describedin the Project Management Institute (PMI) A Guide tothe Project Management Body of Knowledge(PMBOK™ Guide), Third Edition, defined by its

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Figure 6. Compass BA/PMTM OMM

knowledge requirements and outlined in terms of itscomponent processes, practices, inputs, outputs, toolsand techniques

• The key practices embodied in the InternationalInstitute of Business Analysis (IIBA) Business AnalysisBody of Knowledge (BABOK™ Guide) described interms of key practices and techniques

• Industry standard models, such as the SEI Ca-pability Maturity Model® Integration (CMMI), whichidentified process areas that represent a group ofbest practices that, when performed collectively,satisfy a set of goals considered important formaking significant improvement in that area forsoftware and system engineering, are included in themodel

Individual Knowledge and Skill AssessmentsIt 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 of yourbusiness analysts and project mangers. The assessmentresults provide the basis for determining trainingrequirements, professional development activities, andspecific mentoring and coaching needs. As with theorganizational assessment, the individual assessmentbenchmarks an individual business analyst or projectmanager against the industry standards, the PMBOK™Guide and the BABOK™ Guide.

Step 3: BACoEImplementationPlanningThe BACoE Kick-off Workshop serves as the cap-stoneevent officially launching the BACoE. All keystakeholders should be in attendance to participate inthe decision making about the new BACoE. Inpreparation for the workshop, develop a preliminarycharter and business plan for the center that describesits key elements. Conduct a BACoE Kick-off Workshopsession to finalize the charter and plans, and gainconsensus on an implementation approach. Refer toTable 1 for a detailed list of planning considerations.

Step 4: FinalizeImplementationPlanning and FormTeamsAfter the workshop session, finalize the BACoECharter, and staff the center. Form action teams todevelop business analysis practice standards, providefor education, training, mentoring and consultingsupport, and secure the needed facilities, tools, andsupplies. Refer to Figure 7 for a typical BACoEorganization. Develop the BACoE BusinessPlan/Operations Guide describing: implementationstrategy, phases, deliverables, milestones; detailedbudget including salaries, training, technology,consulting services; infrastructure requirements,acquisition and installation; BACoE organizationformation and initial orientation and training; andcommunications and risk management plans.

Final WordsEstablish a BACoE That Executives Love and ProjectTeams TrustEstablishing centers of excellence is difficult, becauseit destabilizes the sense of balance and power withinthe organization. Executives are required to makedecisions based on benefits to the enterprise versustheir specific functional area. Functional managers areoften afraid of losing their authority and control overthe resources assigned to them. In addition, projectteam members may be unclear about their roles andresponsibilities, and how they will be givenassignments. These ambiguities may manifestthemselves as resistance to change, and will pose arisk to a successful implementation. Therefore, it isimperative that robust coordination and effectivecommunication about how the center will affect rolesand responsibilities accompanies the implementationof the center. Do not underestimate the challenges thatyou will encounter. Pay close attention toorganizational change management strategies and usethem liberally. To stand up a BACoE that executiveslove and project teams trust, make the center

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indispensable. Provide high-quality services andsupport to executives, management, and project teamsrather than imposing requirements and constraints.Conduct the operations of the center and designbusiness analysis practices using lean techniques.Follow the motto: barely sufficient is enough to moveon.

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 and report

progress to executives to demonstrate the value addedto the organization because of the BACoE. Typicalmeasures of success include:

• Project cost overrun reduction – Quantify the projecttime and cost overruns prior to the implementation ofthe BACoE, and for those projects that are supportedby the BACoE. If a baseline measurement is notavailable in your organization, use industry standardbenchmarks as a comparison. Other measures mightbe improvements to team member morale andreduction in project staff turnover.

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Table 1. CoE PlanningConsiderations Planning Considerations Description

Strategic Alignment, Vision and Mission

Assessment Results

Scope

Authority

Services

Organization

Budget and Staffing Levels

Implementation Approach

Present the case for the BACoE, and reference the business case for more detailed information about costversus benefits of the center.

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

• Maturity of the business analysis practices

• Summary of the skill assessments

• Recommendations, including training and professional development of BAs and improvement of businessanalysis practice standards

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 perform

• The processes the center will standardize, monitor and continuously improve

• The metrics that will be tracked to determine the success of the center

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

A center of excellence is almost always a resource center, developing and maintaining information on bestpractices and lessons learned, and is often a resource assigning business analysts to projects. Document theproposed role:

• Materials to be provided, e.g., reference articles, templates, job aids, tools, procedures, methods, practices

• Services, e.g., business case development, portfolio management team support, consulting, mentoring,standards development, quality reviews, workshop facilitators, and providing business analysis resources toproject teams

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

• Positions and their roles, responsibilities, and knowledge and skill requirements

• Reporting relationships

• Linkages to other organizational entities

At a high level, describe the proposed budget, including facilities, tools and technology, and staffing rampup plans.

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

• Project time and cost savings – Track the number ofrequirements defects discovered during testing andafter the solution is in production prior to theimplementation of the BACoE, and for those projectsthat are supported by the BACoE. Quantify the valuein terms of reduced re-work costs and improvedcustomer satisfaction.

• Project portfolio value – Prepare reports for theexecutive team that provide the investment costs andexpected value of the portfolio of projects; reportactual value new solutions add to the organizationas compared to the expected value predicted in thebusiness case. When calculating cost, be sure to usethe total cost of ownership (see above).

Great Teams…You Need OneWhen staffing the BACoE, establish a small but mightycore team dedicated full-time to the center, co-located,highly trained, and multi-skilled. Do not over staff thecenter, as the cost will seem prohibitive. Augment thecore team’s efforts by bringing in subject matterexperts and forming sub-teams as needed. Select teammembers not only because of their knowledge andskills, but also because they are passionate and love towork in a challenging, collaborative environment.Develop and use a team operating agreement.Develop team leadership skills and dedicate efforts totransitioning your group into a high-performing teamwith common values, beliefs, and a cultural founda-tion upon which to flourish.

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Figure 7. Typical BACoE Organization

Kathleen B. Hass, PMPProject Management and Business Analysis Practice Leader

Management ConceptsWith Richard Avery, Terry Longo, and Alice Zavala

To learn more, visit www.hp.com© 2007 These materials, developed and copyrighted by Management Concepts, Inc, are licensed to Hewlett-Packard Development Company, L.P. for customer delivery.

The information contained herein is subject to change without notice. The only warranties for HP products andservices are set forth in the express warranty statements accompanying such products and services. Nothingherein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorialerrors or omissions contained herein.

4AA1-6541ENW, November 2007