As digital transformation and ERP consultants, we help and interact with clients daily. This give us tremendous insight into leadership attributes that exist in different forms from a variety of companies around the world.
While the term Center of Excellence (CoE) can mean different things, it is typically a sign of a forward-thinking company that recognizes the value of not static tech management. In ERP world, it is a sign that an organization it is taking its digital transformation or service-oriented architecture seriously. It can be a crucial part of any S/4HANA, Oracle ERP Cloud, Microsoft D365, or other ERP implementation.
More than anything, a CoE is a cross-functional team that helps steer a company’s ongoing dedication in all areas that touch technology. It is not your IT department, but certainly includes representatives that understand tech as well as numerous other diverse and knowledgeable individuals.
Commonly a CoE is formed before or following a major ERP project or digital transformation. The goal being to continue the process of making sure new tech is adopted, implemented, and working as intended (well after implementation). During software implementation 60 percent or less of the purchased modules are implemented at go-live, which is among many findings from our 2020 ERP and HCM Report. This is not a bad plan and usually means some prioritization has taken place. However, it becomes problematic when there is no accountability (or plan) to utilize or evaluate more modules down the road.
Some other attributes of a CoE can include:
An effective CoE also pays for itself as a repository of knowledge and people that can shepherd projects that help grow the business. It should be their only job and they are accountable and in touch with all levels of the organization. With productivity up in most sectors, and employees stretched to the limit, it may make sense to dedicate resources to this.
New technology is a big investment of time and money. And as alluded to above, the true payback may not be at go-live but as your company learns, lives and becomes comfortable with new technology and revamped processes. Whether your CoE is researching technology, modifying training or exploring new product enhancements their services will be in high demand. This means you’ll need to define the scope, purpose and design of the center as part of your digital strategy.
When you think about building internal competencies, a CoE attracts talent – whether it be from inside your organization or from the outside. Some of the considerations for a CoE to “thrive” could include:
Hopefully this blog gives you some food for thought about your CoE, or perhaps incentive to fund one. A CoE can also be very specific. For example, we know of testing centers of excellence or business intelligence. With the number or ERP failures still on the rise, we thought it timely to share our knowledge about the positive impact a CoE can have on a digital transformation initiative (before, during and after implementation).
As independent ERP consultants, our services have expanded to support CoE initiatives while helping build internal competencies at the companies we partner with. Every successful initiative must begin with an overarching strategy, and yes, we can help you define that too. We are Third Stage Consulting and our value proposition is independent and unique.