JK's Diary

Introduction

As the organization grows organically or in-organically, there will be an infusion of multiple technologies, loss of governance and a drift away from the centralized model. In some organizations where the BI environment is not robust, there will be an increased usage of MS Excel and MS Access to meet various business needs like cross-functional reporting, dashboards, etc.

When the organization is small, one can cater to the business requirements by manually crunching numbers. But as it grows, factors like localization, compliance, availability and skill set of resources make it unmanageable and tedious. Similarly, when the usage of Excel spreadsheets grow the complexity also grows along with it (macros, interlinked excels, etc.)

There are various models and frameworks for rationalization available in the industry today. Each model designed to address a specific problem and offer an excellent short-term solution. Interestingly all these industry models lack two important factors. A governance component and pillars/enablers to sustain the effort and add value to the client.

Rationalization – The piece meal problem:

When the environment slowly starts to become unmanageable, organizations look towards rationalization as a solution. Some of the factors that lead to the need for rationalization are:

• Compliance issues
• License fees consuming a large portion of the revenue
• Consolidation of operations is a bottleneck
• Data inconsistency start to creep in
• Integration post merger or acquisition
• Analysts spending more time validating the data rather than analyzing the information

Generally organizations identify what needs rationalization based on what is impacting their revenue or productivity the most. E.g. Tool license fee. Consultants are then called to fix that particular problem and move on. There are two issues here:

• First, the consultant concentrates only on the problem at hand and does not validate the environment for the root cause to fix it permanently
• Second, the framework used by the consultant fixes the problem perfectly from a short-term perspective and does not guarantee a long-term solution

The Solution:

Rationalization models in the industry today needs an update for inclusion of a governance component to help assess, rectify and sustain the rationalization effort in the long run. In addition to this, enabling components needs to be identified and included to add value to the overall exercise.

Figure 1

A typical rationalization model with governance component and post rationalization enablers would look as shown in Figure 2. This model is not comprehensive and shows only the most common rationalization scenarios.

Pre-Rationalization Assessment

A pre-assessment when conducted would evaluate if the requested rationalization is all that is required to fix the existing problems or something more is needed for a permanent fix. Typically a root cause analysis helps identify the actual reason behind the current scenario. Along with this, the existing governance maturity and value creation opportunities are also identified to help enhance the user experience, adoption, sustainability and stability of the environment.

A simple excel questionnaire should help initiate the pre-assessment phase (Contact the author if you are interested in this excel) without dwelling deep in trying to understand the intricacies in the environment. Based on the assessment findings, the course of the rationalization exercise can be altered. For example, a formal Data Governance program kicked off in parallel.

Rationalize

This is the phase where the actual rationalization takes place using customized models and frameworks. Complete inventory gathering, metadata analysis, business discussions to understand the needs, etc. is performed. At this point, the client’s need from a short-term perspective is met. Sustainability of the environment would still be questionable.

Governance Component

The depth of coverage for the governance component is to be mutually decided between the client and consultant based on environmental factors. Parameters like size of the IT team, existing processes and policies, maturity, etc. play a major role in deciding the depth required.

The governance component introduced within the rationalization framework would typically deep-dive into the system to understand the policies & standards, roles & responsibilities, etc from various perspectives to fix or find a work-around to the problem and ensure the scenario does not repeat itself.

Enablers

Post rationalization enablers have no dependency on either the rationalization effort or the governance component. This component is kicked off post the rationalization phase either as a separate project or as an extension to the rationalization phase. The enabling components though they are optional, will play a vital role in adding value to the client by sustaining the setup from a long-term perspective and user adoption perspective. On occasions where more than one enabler has been identified, it is sufficient if the key enabler is addressed on priority.

For example, if the client requests for report rationalization, there is a high probability that the data model was not flexible and hence the users were creating multiple reports or there was a training issue. This would have got identified during the pre-assessment phase and can be addressed as part of this phase by setting up something like a Global Report Shop. The governance component would have helped address a part of this issue by ensuring policies are in place to see that the users do not create reports at will and at the same time they are directed to the right team or process to meet their requirements.

Taking another example, if the client goes for a KPI and metrics standardization exercise, there is a good chance that there is a need for data model changes, dashboards to be recreated and analytic reports to be designed from scratch. This can be handled by setting up a core analytics team well in advance. If this was not identified and addressed as part of the KPI standardization project, users day-to-day activities would get hampered and result in poor adoption.

Benefits

Primary advantages of this rationalization model are:

• Maximum revenue realization in a short duration
• Helps sustain the quality of the environment
• Enhances users productivity and adoption

Conclusion

Rationalization must be seen from a broader and long-term perspective. Rationalization without addressing the governance component will not be strong and one without any supporting pillars like the enablers mentioned will not serve the long-term purpose.