Set Up Your Insights Center of Excellence in Four Steps

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Set Up Your Insights Center Of Excellence In Four

Steps
Get Your Organizational Setup Right For Analytics And Artificial Intelligence
by Achim Granzen
October 15, 2019
Why Read This Report Key Takeaways

While data and analytics technologies and their Follow A Programmatic Approach To Setting
applications are maturing, existing organizational Up An Insights CoE
structures often inhibit success. The insights Do not treat the setup of an insights CoE as
center of excellence (CoE) is becoming a leading a project with fixed start and end dates; the
organizational model to help firms transform into organizational structure of the CoE is a living
insights-driven businesses. This report outlines organism that will change with the business.
how CIOs can establish an insights CoE to ensure
Executive Sponsorship Is Key To Success
the success of their analytics initiatives and pave
Organizational change rarely succeeds without
the way to future success with artificial intelligence
executive sponsorship. The insights CoE requires
(AI) and machine learning (ML) technologies.
business and technology executives to become
joint stakeholders.
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FOR CIOS
Set Up Your Insights Center Of Excellence In Four Steps

by Achim Granzen
with Frederic Giron, Cinny Little, Gene Leganza, Nancy Lin, and Bill Nagel
October 15, 2019
Table Of Contents Related Research Documents

2 Reap The Benefits Of An Insights CoE And The Four Essential Steps To Transform Into An
Raise Your Insights Maturity Insights-Driven Business
2 There Are Four Essential Steps To Setting Organize For Digital Intelligence With Three
Up An Insights CoE Models
Step 1: Establish A Joint Vision With A Q&A: The Top Seven Questions About The
Business Executive Sponsor Insights Center Of Excellence
Step 2: Pilot The CoE Approach And Prove Its Use The Insights Center Of Excellence To
Value Orchestrate Analytics Across Organizational Silos
Step 3: Build Out Work Streams, Roles, And

Governance
Step 4: Harden The Operating Model And

Share reports with colleagues.
Add Strategic Objectives
Enhance your membership with
Recommendations Research Share.
7 Deploy A Flexible, Adaptable, And

Collaborative Strategic Program
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FOR CIOS October 15, 2019
Reap The Benefits Of An Insights CoE And Raise Your Insights Maturity
To realize continuous business value from data and analytics investments, CIOs must broaden their
view beyond the realm of technology and become the driving force behind the establishment of an
insights center of excellence. CIOs focus on technologies like AI and ML that are instrumental in
turning data into actionable insights — and rightly so. However, CIOs looking to improve the maturity
of their firms’ use of insights must do more: They must pay equal attention to organization and take a
leading role in establishing the right organizational model. Firms are increasingly turning to the hub-
and-spoke insights CoE to structurally increase their insights capabilities.1 Insights CoEs help to:
›› Foster insights-driven maturity with strategy, governance, and program management. A CoE
provides a range of strategy, governance, and program management functions that are critical to
establishing and continuously improving a firm’s insights-driven maturity.2
›› Develop skills that are crucial to becoming insights-driven. Analytics skills are hard to come
by. The CoE structure allows firms to better leverage the skills that are available while providing a
vehicle to attract and develop internal and external talent.
›› Create a language common to tech and business teams. Linking business capabilities with the
right technology capabilities to improve results works best in an environment of mutual learning
and collaboration. This also helps to reduce time-to-value by aligning on the metrics that matter
and to eliminate unactionable deliverables.3
›› Establish a lighthouse initiative in the firm’s insights-driven transformation. Ideally, the CoE
will report to a high level in the corporate structure and have the sponsorship of both business and
tech execs. The CoE will show the entire organization that the firm is serious about its insights-
driven transformation.
“When centralizing our data into a data lake architecture, we realized that we needed a centralized,
business-focused organization to leverage the richness of the data across business units and
ensure the pollination of information throughout the Astro group.” (Phuak Aik Chong, CTO, Astro)4
There Are Four Essential Steps To Setting Up An Insights CoE

To establish and then extend the leverage of analytics, AI, and ML, you must take a programmatic
approach driven by business outcomes and aligned to your organization’s overall business strategy.
Don’t take a big-bang approach to building an insights CoE; neither should you assemble one just to
deliver a few standalone analytics projects. An insights CoE is a joint undertaking of tech teams and a
pioneering business unit.5 From our work with companies that have built such strategic organizational
structures, Forrester has identified four steps that you should follow:
© 2019 Forrester Research, Inc. Unauthorized copying or distributing is a violation of copyright law. 2
Citations@forrester.com or +1 866-367-7378
1. Establish a joint vision with a business executive sponsor. The participating business unit
(BU) sets the priorities for the insights CoE, which must align with the overall business strategy.
Create a high-level charter document outlining the CoE’s approach and benefits to entice execs
to champion the CoE pilot and showing them how they will gain access to new technologies to
transform their business lines.
2. Pilot the CoE approach and prove its value. The executive sponsor from the BU taking part in
the pilot owns the use case and puts it forth as a “challenge” to the CoE team. Set up the pilot (or
nucleus) team to meet this challenge and prove the CoE’s value. The outcome must meet criteria
set forth by the line of business, and success is ultimately defined by the business executive
sponsor. One bank in Singapore initially focused on improving the ability of its consumer business
to upsell and cross-sell, which had a direct impact on the top line.
3. Build out work streams, roles, and governance. Flesh out the nucleus team with additional roles
and expertise to scale from handling one pilot case to multiple initiatives. Fill roles over time as
required by the use cases put to the team. The setup of the insights CoE is functional, meaning
that members are aligned to defined functional area or work streams.6 They collaborate in an agile
manner on initiatives or projects prioritized by the CoE leadership team.
4. Harden the operating model and add strategic objectives. Complete the scope of the insights
CoE as outlined in the original charter document to conclude the ramp-up phase. Operationalize
analytics capabilities to proceed from insular one-off analytics exercises to a state where analytics
capabilities are integrated into business processes and operational systems to generate ongoing
business value.
Step 1: Establish A Joint Vision With A Business Executive Sponsor
The participating BU sets the priorities for the insights CoE; they must align with the overall business
strategy. This puts the CIO in sync with business leaders and provides an opportunity to drive tangible
business results; this is the vision to put forward when seeking an executive sponsor for the proof of
concept/pilot for the insights CoE. Before launching the insights CoE, CIOs must:
›› Identify the right BU and executive sponsor. To get the ball rolling, you need a champion — a
pioneer who wants their BU to become insights-driven right now. Position the insights CoE as the
vehicle for achieving this and ask them to put forward a business challenge to solve to prove it.
When successful, the business executive sponsor agrees to help build out the CoE according to a
joint plan: the CoE charter.
›› Create a charter document to align all stakeholders on the approach and objectives. An
insights CoE is a team with clear objectives; it’s not a help desk, tech lab, project group, or static
business process optimization endeavor. To avoid misalignment and costly readjustments down
the line, set the right expectations with all stakeholders; that’s critical to success. Lay out the
operational model, objectives, and stakeholder map in a charter document to ensure that everyone
is on the same page right from the start and remains so throughout the insights CoE setup process.
›› Appoint an CoE lead with the right expertise. The leader of the insights CoE is a full-time role;
this person is ultimately responsible for the planning, setup, and execution of the insights CoE and
takes their mandate directly from executive sponsors. The ideal candidate will have a mixture of
technology expertise, business knowledge, and management skills — and, if possible, will have
done this work before.
›› Identify a pilot use case to put forth as the business challenge. Now that you have a champion
and a shared vision, identify and agree on one use case to demonstrate the value of the insights
CoE approach. The participating BU will define the success criteria — this is the business
challenge put to the CoE.
“A key objective of the insights CoE is to break down barriers between business and technology
people. At OCBC, we created a specific role for that called ‘analytics relationship managers’
or ‘analytics translators.’” (Donald McDonald, SVP and head of group customer analytics and
decisioning, OCBC Bank)
Step 2: Pilot The CoE Approach And Prove Its Value
It’s now time to assemble the nucleus team that will take on the challenge! Assemble the expertise,
technology, and data required for success and seek support from external consulting partners where
necessary. Assign the newly appointed insights CoE lead to:
›› Identify and appoint the nucleus team. This is the team responsible for delivering the pilot,
with the CoE lead at the helm. Team members are likely to be recruited from internal top talent,
potentially augmented by external partners who are skilled at this. Key participants include the
business analyst (the designated business stakeholder setting specific business objectives), data
scientists (with expertise in applying analytics to the business domain), data engineers (familiar with
the sources of data and how to prepare it for analytics), and support roles from IT (mainly owners of
data and operational systems) and the business (to lend additional insights into business processes
touched by the pilot use case).7
›› Assemble the required technologies and data. The team identifies the technologies and data
required to make the pilot successful. The technology platform must suit the use case — so
be careful not to engage in a tech extravaganza!8 Identify and engineer the data required data
for analytics. Be prepared for multiple iterations as discussions go back and forth between the
business, the insights CoE, and the data owners. Sometimes, the team will have to adapt the
scope of the pilot project based on the data that is available.
›› Execute the pilot use case and produce measurable, actionable results. If necessary, break
up the task into smaller, agile steps to ensure a constant feedback loop and identify and remediate
technology, data, and business process challenges early.9 Never lose sight of the business
challenge, as the pilot (and the CoE) will be judged on directly measurable results, such as an
increase in average revenue per user, the shift of a given percentage of customers to higher-value
services, or an increase in new customer subscriptions.
›› Establish new communication channels and evangelize the CoE model. You may need to
establish communication channels and trust from scratch, so ensure that all touchpoints in the
organization understand the CoE’s charter and collaborative model well. Evangelize the new
approach and seek buy-in. Formalize communication and responsibilities in the CoE charter
document as you go along.
›› Present the business results and seek agreement to continue. This is a major milestone: The
CoE journey will only proceed if it meets the success criteria from the business perspective. Have
the CoE team jointly present the business results, business process improvements, and future use
cases. Prepare for scrutiny and questioning of the results, as the team will have made mistakes and
there will be errors in the data. Fail fast, improve in the next iteration, and educate all stakeholders
about this approach.
“Business teams can be very protective about the way they operate — you must prove the
business value to gain trust. An executive business sponsor is crucial in making this happen!” (Eric
Sandosham, founder and partner, Red & White Consulting Partners)
Step 3: Build Out Work Streams, Roles, And Governance
Success breeds success, and demand for CoE involvement will increase sharply after the success of
a pilot. To meet growing demand, expand the nucleus team into a formal structure and establish core
work streams, defining the scope in the CoE charter document. Focus each work stream on a key
task and have resources from across different work streams collaborate in an agile manner on every
initiative or project to achieve its objective.10 Assign each work stream a dedicated lead; this person,
the insights CoE lead, and business stakeholder leads form the insights CoE management team.
Continue to work through business use cases and maintain the momentum. The core work streams
under the scope of the insights CoE are:
›› Analytics strategy. This work stream sets the insights CoE’s operational guidelines and priorities.
Business stakeholders, the insights CoE lead, and work stream leads define and prioritize business
cases, resource and skill requirements and allocation, technology selection, and insights CoE
management. The team is also responsible for reporting to the executive stakeholders on a regular
basis — monthly during the ramp-up and quarterly once fully operational. The insights CoE lead, all
business analysts and stakeholders, and other work stream leads are part of this work stream and
are responsible for all communication with executive stakeholders, steering committees, and other
business partners.
›› Data science development. The development of the core analytics model is part of this work
stream. Data scientists and other analytics and AI experts develop and maintain analytics models in
close collaboration with the other work streams, in particular the business analysts. Specific roles for
this work stream include data scientists, business analytics professionals, and AI and ML specialists.
›› Analytics technology platform. This work stream collaborates with relevant IT functions and
external service providers to ensure that insights CoE’s tech requirements are met. The work
stream represents the insights CoE in key technology discussions and ensures that it can meet
the objectives of the various projects and initiatives under the umbrella of the CoE. Specific roles
for this work stream include platform consultants, architects, and engineers. The work stream may
own the technology platform and parts of the data pipeline.11
›› Analytics and BT enablement. The key focus of this work stream is to enable the wider
organization to leverage the benefits of analytics and AI on an ongoing basis. Early on, it will focus
on enablement and training; the ultimate objective is to empower employees to make insights-
driven business decisions. During the ramp-up phase, this work stream may be part of the
analytics strategy work stream.
›› Data stewardship and governance. Rising consumer privacy and data protection concerns have
made this function more important. This work stream realizes data stewardship and governance
from the technology and business perspectives. Business stakeholders own their data; leadership
may appoint a chief data steward to address organizationwide matters. Specific roles for this work
stream include data stewards and data quality engineers. The chief data officer may be represented
by a delegate in this work stream, as their role would usually go beyond the insights CoE scope.
During the ramp-up phase, this work stream may also be part of the analytics strategy work stream.
“The CoE structure is not an org chart; it must be flexible to adapt to new requirements, with a core
team and the ability to scale up or down as needed.” (Ofir Shalev, chief data officer, Go-Pay [Go-Jek])
Step 4: Harden The Operating Model And Add Strategic Objectives
Finalize the setup of the insights CoE by reviewing and hardening the operating model, ensuring that
governance and metrics are in place, and adding strategic objectives for the CoE to play an active
role in the organization’s insights-driven transformation strategy. Market the success of the insights
CoE internally to spark the interest of other BUs to come on board and benefit from it. To complete the
process, CIOs and business executive sponsors must require that CoE leadership team:
›› Complete the skills matrix across all work streams. This includes analyzing previously assigned
roles for which an external partner was involved and deciding which skills to bring back in-house,
which to source internally, and which to hire (and from where). This is likely the single biggest
investment decision in the CoE setup.
›› Establish governance, metrics, and review schedules. Get the CoE fully operational by putting
the appropriate governance, metrics, and review schedules in place to ensure that the CoE’s work
is constantly validated against the business value delivered. Schedules range from daily team
standups to quarterly reviews with executive stakeholders.
›› Operationalize tech capabilities by integrating them into business processes. Business and
tech owners must continuously collaborate to integrate analytics insights into existing business
processes. Maintaining closed technology and communications loops fosters the progression
from business improvement to business innovation and transformation. This requires training and
upskilling business users and the owners of business and IT systems.
›› Engage the insights CoE in a consultative role for future technology decisions. The CoE
team’s unique blend of business understanding and technology expertise makes it perfectly suited
to play a leading role in future tech strategy discussions, ultimately owning that strategy for its area
of scope. In larger organizations, this can be part of a tech strategy review board.
Recommendations
Deploy A Flexible, Adaptable, And Collaborative Strategic Program

Regard the four steps to setting up an insights CoE described in this report as a framework rather than
a cookbook; while using the right ingredients and order of steps significantly improves the chances
of success, there may be other ways to achieve the goal.12 There is no golden path to successfully
becoming insights-driven, but considering all critical capabilities to be of equal importance helps to
chart the course. Therefore, when embarking on the journey of setting up an insights CoE, CIOs must
understand that:
›› Being prepared to continuously review and adjust is a key principle. There is no one-size-fits-
all approach to setting up an insights CoE; you must adapt it to the specifics of your organization.
Timelines depend greatly on openness and maturity of the organization. Crucially, things might
also move faster than expected when additional business units queue up to get on board the
insights CoE.
›› An insights CoE is not a help desk or shared services team. The CoE is not about addressing
user problems and streamlining ticket systems — its focus is on driving business results through
collaboration across business and technology functions and the leverage of technologies such as
analytics, AI, and ML. You must manage this expectation across all stakeholders.
›› Innovation labs are a different beast altogether. Generating repeatable and actionable insights is
very different from testing and trying out new technologies — and it’s a mistake to mix and match
these objectives. Once an insights CoE has achieved scale, it may be home to an innovation work
stream, but it should never be set up as a laboratory in the first place.
›› Attracting and retaining talent will move up the agenda. At all steps of the setup, the CoE
requires talent that is scarce and potentially not available at the outset. Therefore, the CoE strategy
must be accompanied by a talent strategy. Crucially, the insights CoE can act as a catalyst to
identify and retain top talent within the organization.
›› Leveraging external partners can lower the risk of the journey. Embarking on the journey to
becoming an insights-driven business can be daunting, especially if the technology adoption gap
is significant. Leveraging external consultancies and service partner can help to accelerate the
journey and lower the associated risk.
›› Executive sponsorship and business ownership remain key. The insights CoE will only succeed
if it generates ongoing business value. Therefore, the ultimate judges of success and thus the
ultimate owners of the CoE objectives are the executive leaders of the participating business lines.
These executive business sponsors form the board of the insights CoE.
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Endnotes
When deciding on an organizational setup for customer analytics, a hub-and-spoke insights CoE is clearly preferred
1
over other potential models such as decentralized analytics teams, and centralized analytics teams. See the Forrester
report “Organize For Digital Intelligence With Three Models.”
See the Forrester report “Use The Insights Center Of Excellence To Orchestrate Analytics Across Organizational Silos.”
2
See the Forrester report “Q&A: The Top Seven Questions About The Insights Center Of Excellence.”
3
Source: Phuah Aik Chong, “Astro’s Analytics Journey,” Astro, September 13, 2017 (https://www.astro.com.my/
4
mediaroom/articledetails.aspx?id=548&title=astro-s-analytics-journey).
Nearly all CoEs start out focusing on one line of business (LOB). Astro created its CoE in collaboration with the
5
customer LOB; OCBC set up its CoE for the consumer banking business. A large Australian government agency set
up its CoE with an initial focus on compliance. Once the CoE matures, its scope will expand to include additional
LOBs. Look for Forrester’s upcoming report on maturing an insights CoE.
CoEs set up by function — e.g., data science, platform technology, governance — are more efficient during the setup
6
phase, focusing on the best leverage of scarce resources. Once a CoE matures and grows, other setups are on table,
such as a dedicated team for each business line.
Other resources (such as operational system administrators and digital marketing specialists) may need to be added
7
depending on the use case, but they might not become part of the CoE going forward.
The technology platform will evolve over time, and the CoE has a dedicated work stream for this. However, the aim of
8
the pilot is not to prove a technology, it’s to prove the CoE model.
Limiting each step to four to eight weeks helps to trial the operating model and touchpoints with other parts of the
9
organization and refine them as needed. This decreases risk by introducing checkpoints, as in this customer insights
example: Segment customers, identify the most profitable products, determine customers’ propensity to buy high-
profit products, execute an upsell campaign, and measure results.
10
During ramp-up, the functional setup helps to realize the objectives of the CoE (the CoE charter) in a focused
approach. More mature CoEs will likely have a different organizational model.
11
The data pipeline has no clear divider where responsibility shifts from data engineering and operational teams to the
insights CoE. Data close to the business (traditionally stored in data marts) is a good candidate for CoE ownership;
operational data in billing support and enterprise resource planning systems is not. The insights CoE must have a seat
at the table when the firm establishes a data strategy.
12
Forrester lists five critical enablers for insights CoE success, all of which apply throughout the four steps of setting up
a CoE. Source: September 17, 2019, “Turbocharge Value From Data And Insights With A Center Of Excellence: Five
Critical Enablers” Webinar (https://www.forrester.com/webinar/Turbocharge+Value+From+Data+And+Insights+With+A
+Center+Of+Excellence+Five+Critical+Enablers/-/E-WEB29265).
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LICENSED FOR INDIVIDUAL USE ONLY

Set Up Your Insights Center Of Excellence In Four

Why Read This Report Key Takeaways

Table Of Contents Related Research Documents

Step 3: Build Out Work Streams, Roles, And

Step 4: Harden The Operating Model And

7 Deploy A Flexible, Adaptable, And

Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA 02140 USA

There Are Four Essential Steps To Setting Up An Insights CoE

Step 1: Establish A Joint Vision With A Business Executive Sponsor

Step 2: Pilot The CoE Approach And Prove Its Value

Step 3: Build Out Work Streams, Roles, And Governance

Step 4: Harden The Operating Model And Add Strategic Objectives

Deploy A Flexible, Adaptable, And Collaborative Strategic Program

Engage With An Analyst

Analyst Inquiry Analyst Advisory Webinar

Forrester’s research apps for iOS and Android.

Forrester’s research and insights are tailored to your role and

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