Creating Funding Avenues
Acquiring funding for analytic efforts is a significant challenge that most organizations face at one time or another, often year after year. Companies of all sizes, projects small and large, all have to be able to justify a reason for their effort and a reason for any funds required for the successful development and deployment of the end solution.
Frequently, I hear from resources that are challenged with funding their projects that they have strong business needs, great plans and great approaches, but can’t get the funding. All analytics efforts have resource costs in time and money. They also require supporting infrastructure in the form of hardware and software needed to build and deploy the solution. Let’s examine some background on funding these types of efforts and come up with some techniques you can use to improve your ability to fund these valuable projects.
Why Is Funding So Difficult To Acquire?
So why is funding a data warehouse or analytics project such a challenge? There can probably be any number of reasons, so let’s try to focus on some of the more common sources.
- Reputation:Executives frequently have the experience of watching data warehouses that have traditionally been a source of great financial spend and little realization of value. It could come from experiences in other companies or internal efforts within your company. Much like what we experience in other areas of our lives, one bad experience or story can cause fear or hesitancy that will cause your effort to be voted down or shut down. Either way, this creates a potential roadblock that you must be prepared to address effectively enough that they will be convinced to start your effort.
- Financial priorities:Every organization has many different efforts that are in need of funding by the business in order to be successful. The better the plan and expertise that is shown withthe proposal, the better chance it will rise to the top.
- Leadership:Regardless of how good your story, funding comes from executive leadership. The more visible and powerful your champion, the more likely your story will be heard.
- Proven success:When certain areas or leaders have consistently seen success from business areas, specific resources, or specific technologies, they are more likely to embrace and support new proposals coming from those areas.
- Lack of a strong plan:Any proposal for funding must be accompanied by a plan that is well thought out, confidently communicated, and has frequent deliverables that show progress and value. Putting yourself in the shoes of executive leaders, none of us would want this handled any other way. Pet projects may get funding for the short term, but without hitting the key components of a sound plan, theywill eventually lack support.
Critical Success Factors
So what can you do to take that business need and sound approach forward with the right materials that will garner the attention of leadership? How can you build a proposal that will sell itself? Budgets are getting reviewed and reprioritized constantly by senior leadership. Here are a few critical success factors that you should make sure are incorporated and highlighted in your proposal:
- Executive Awareness and Support:Ioften find the great efforts, thatI have been a part of, were much easier than most because we had executive support. Yet, I enjoy responding that rarely have I seen it where technical resources walk into that solution. I have never had an executive sponsor come up to me and say they were my sponsor. Almost always we have to paint a picture that can be shared with key executive leaders that are known to deal with the problem our solution will solve. We have to find out who those leaders are and share with them why this is so challenging and why they need to be the visible point that makes this happen. Most leaders are waiting for great ideas and strong proposals that they can bring forward and support.
- Benefit Driven Proposal: Too often projects do not address specific pain points that are felt across the business. If your solution solves one problem or answers one question, that is a good start, but when it comes to gaining funding, if you can’t share how that solution can have a positive impact across the business that they can recognize, it will struggle to gain continued funding and be suspect to budget cutting.
- Cost vs Value: Tie your proposal to existing costs and show how this solution will improve the business, drive down costs, increase revenues, or increase the position of the crucial business drivers your leadership pays attention to. Leaders often focus on ROI, but many technical resources don’t realize that ROI is not just measured in dollars. Significant movement towards business drivers and going the direction the company has always wanted to go is hard to quantify monetarily, but easy to tie back to who your company says they want to be.
- What Happens If We Don’t Do This?This can often be the key slide in your deck as it shows that doing business as usual will result in increased cost, unrealized value, andprohibit the business from reaching its goals. More often than not, you can tie financials to benefits and business drivers so that it becomes a “slam dunk” decision.
- An Incremental Approach: Realize value quickly and often. Most all good sized businesses in every industry have had bad experiences with large projects that go on for a long time and deliver very little value. I could share a dozen or more project horror stories, several in the hundreds of millions of dollars that went on for years and were ultimately thrown away or carry such a negative connotation that they are the butt of corporate sarcasm. Make sure to have a plan that delivers real value, frequently. Many people write how an enterprise data warehouse is boiling the ocean. If you do not know how to plan, approach, and deliver an enterprise solution in an incremental manner, that is exactly what will happen. However, there are also several stories I could share of large scale data warehouse efforts that have been tremendously successful to the point of having a dramatic impact on the success of a company.
- Prototype/Pilot Project: After you develop a sound plan and approach, one of the first things you must do is demonstrating value quickly. Sometimes this is only a throwaway project, but it doesn’t have to be. Most of these projects should take less than 6 months andideally around 2 to 3 months. When I look back to the most successful efforts I have seen and been involved with, they all have this in common. This garners trust and support from leadership, but it also builds confidence in the team and resources that are responsible for building the solution.
Funding a data warehouse effort is rarely an easy proposition. In fact, if you find that your funding is on easy street, you either already have one awesome solution and the business is loving every minute of using your warehouse OR you best beware that if you don’t start showing significant value soon, you may very likely encounter those in leadership that want to pull that funding that you thought was irrevocable. Projects are stopped so frequently now.
Laying out a solid plan and approach, exhibiting confidence and demonstrating value will all go further to gaining funding than any strong technical acronyms or design. Sounds more like business than it does IT, doesn’t it? Many IT resources will say they are not in sales or good at marketing. Yet, if you want to initiate significant solutions that impact the business, you best align yourself with those internally and externally that can help build the type of proposal that will get you access to the funds to accomplish what you have prescribed. A good technical solution waiting for a business problem has a very small percentage of a chance at being successful and the reputation unsuccessful efforts generate will make future funding that much more difficult.
About the Author
Bruce has over 20 years of IT experience focused on data / application architecture, and IT management, mostly relating to Data Warehousing. His work spans the industries of healthcare, finance, travel, transportation, retailing, and other areas working formally as an IT architect, manager/director, and consultant. Bruce has successfully engaged business leadership in understanding the value of enterprise data management and establishing the backing and funding to build enterprise data architecture programs for large companies. He has taught classes to business and IT resources ranging from data modeling and ETL architecture to specific BI/ETL tools and subjects like “getting business value from BI tools”. He enjoys speaking at conferences and seminars on data delivery and data architectures. Bruce D. Johnson is the Managing director of Data Architecture, Strategy, and Governance for Recombinant Data (a healthcare solutions provider) and can be reached at firstname.lastname@example.org