Why a Center of Excellence is Key for a Successful Digital Transformation

In this post, we’ve invited Scott Os of Synaptix Group to explore and explain what is a Center of Excellence, the needs it serves to help move you along the maturity model, and why it’s a key success factor for your Digital Transformation. Scott is the Founder and President of The Synaptix Group and draws on over 30 years of senior level experience managing the design, development, and implementation of document based solutions, with a particular focus on Enterprise deployments in public and private sector.

In a recent ValTeo blog, the DTM Maturity Model outlined the stages an organization traverses as it rethinks many of its customer interactions and internal transactions that revolve around paper-based processes.

As companies move from the nascent to the pivoted stage, there is a recognition that change is needed. This recognition may result from shrinking profits and/or the introduction of external threats, forcing the organization to rethink its legacy processes. It is typically at this time that a single individual or group of individuals emerge that are the thought leaders on how to evolve the company in order to handle this change. It is at this time that the concept of a Center of Excellence (CoE) begins to take form, though it may not be called that. During this stage, the early planning is done to prepare for how to structure and staff a CoE.

However, it is really once an organization moves from pivoted into the accelerated stage that the CoE typically begins to emerge as a force for change in many ways. This is done with an eye toward shared technologies, skills, training and knowledge transfer. The CoE is also tasked with documenting the process to assess new use cases, determine their priority and develop timelines

Whether the 4 levels of enterprise digital maturity are referred to as nascent, pivoted, accelerated, and optimized (as in the Valteo Tech’s DTM Maturity Model) or an enterprise level of maturity is characterized by the 6 levels defined by Forrester (Continue as Usual, Test and Learn, Systemize and Strategize, Adapt or Die, Transformed and Transforming, Innovate or Die), or the terms for the waypoints along the journey map to potential, formation, building/evolving, operationalized, and adaptive as in the business process management maturity model, what we have found across dozens of company experiences is that there is a consistent theme:

In order to move your organization along the maturity road, you must adopt a consistent, standardized approach to your digital transformation.

Why Have a Center of Excellence?

A recent Forrester study on business process improvement, coupled with our experience with companies of all sizes and government agencies, demonstrates that building a CoE significantly enhances the ability of an organization to meet or exceed the goals that center supports.

Source: Forrester Research, Inc. US and UK Enterprise Architecture and Business Process Management Online Survey

The key data from the above graphic is that 67 percent of respondents who were successful in bringing about change in their organizations had formal CoEs. Among those reporting failures, only 14 percent had such centers in place.

When governance, a support structure, guidance, metrics & measurements, along with shared learning exists across an organization, success is far more likely. Per above data, it’s almost 4 times more likely. Such successes support organizational, program, and specific project goals that are best aligned with company long-term strategy and bear measurable results based on agreed-upon company metrics. In fact, this level of organization and success acceleration is one of the key indicators of that organization’s achievement of the Accelerated Maturity level on the VTT model.

So, why a CoE?

  • Maximize Project Team Success
  • Reduce project risk
    • CheckpointsBest practices
  • Recognize ROI quickly
  • Maximize efficiency through reuse
  • Reference architecture for ease of maintenance
  • Harmonize Business and IT
    • Transformational role in automating processes

What is a Center of Excellence?

A center of excellence (CoE) is a team that provides leadership, best practices, support, training, and collaboration for a focus area to drive business or customer-valued results. At its core, a CoE is a governance model for guiding and managing a program across an organization.

The CoE provides visibility within the company about the idea of digital transformation, and helps the idea catch on in organizations that might otherwise be resistant to change. It is recognized as being a building block for realizing the wide-scale potential and value of digital transaction management solutions.

In order for a digital transformation to be successful, any adoption plans must address cultural, technological, and organizational elements. These are analogous to the main tenets in enterprise architecture, people, process and technology. The key takeaway here is that the concept of CoE presumes change is hard and will encounter resistance. To that end, any structure or activity defined in implementing and executing plans for a CoE is aimed to reduce the friction that often exists with the introduction of any process or technology.

How do you Implement a Center of Excellence

The great thing about a CoE is that there is more than one way to implement it effectively. We’ve seen many different successful CoE implementations over the years and what’s important is understanding how your own organization operates to build a CoE that will work well in that environment.

One of the key advantages of the CoE is that it can initially be built on a small scale, with minimal incremental expenditure starting with companies that are at the Pivoted stage of the VTT DTM Maturity Model. As its value is delivered to management, staff, and individual project teams, it can iteratively evolve and scale up its resources, services, and capabilities. The CoE model can also be a critical asset for distributed organizations, providing centralized processes, infrastructure, and reporting. This distributed model is indicative of organizations experiencing the Accelerated and Optimized level of maturity.

In our experience, all CoEs should serve the following basic needs:

  • Authority: Knowing what the CoE is responsible for and what decisions it can make is the most important element here. At one end of the spectrum, the CoE can be purely advisory. At the other end, it can be responsible for some tasks and have the power to dictate what other groups can and cannot do. The best approach depends a great deal on company culture.
  • Management: Allocating limited resources (money, people, etc.) across all their possible use is an important function of CoEs. They should ensure organizations invest in the most valuable projects and create economies of scale for their service offering. In addition, coordination across other corporate interests is needed to enable the CoE to deliver value.
  • Guidance: Standards, methodologies, tools and knowledge repositories are typical approaches to filling this need.
  • (Shared) Learning: Training and certifications, skill assessments, team building and formalized roles are all ways to encourage shared learning.
  • Measurements: CoEs makes it easier to measure the value delivered by DocuSign across the organization by centralizing and standardizing the top business metrics.
  • Support: For their area of focus, CoE’s should offer support to the business lines. This may be through services needed, or providing subject matter experts.

What Levels of CoE Exist at Each VTT DTM Maturity Stage?

The Nascent stage usually exists before organizations begin to recognize the need for CoE’s. Capabilities may initially live in functional organizations or with individuals. In the earliest stages, organizations may perhaps establish a steering committee or create initial pilot projects to begin to identify and focus skills in an organization.

Organizations begin to move to a Pivoted stage when they start viewing CoEs as an asset for project teams. With this project-centric view, they know that teams need support and are looking for a home for the deeper skills they require. Identify leaders for the CoE and other resources with the skills needed for the roles given above. CoE leadership begins to coordinate across projects, train and mentor others, help plan and set scope, and monitor the capabilities they were responsible for building.

To move to the Accelerated stage, they begin to define and document the standards and practices for their competency. By this stage, a team charter should define the center. Team members should capture best practices in a wiki or similar format and begin to more actively manage associated risk and quality. Training and reference best practices should be standardized and help to actively communicate the competencies across the organization. Many of these efforts are aimed to build a playbook or template of how the CoE should be implemented company-wide or deployed for a distributed / matrixed organizational structure.

Making the leap to the next higher level, Optimized, requires strong coordination and, therefore, strong commitment across executive levels. CoE sponsors and leaders should coach executive leadership so that organizations can gain this commitment to begin to build managed, strategic CoEs. The focus becomes across an organization with clear support for corporate plans, integrated with corporate scorecards, and an actively managed portfolio of initiatives that use their service. The true power of CoE’s begins to be unleashed as more formal career paths are created, where development and mentoring become available for the competencies the CoE supports.

In future installments, we’ll explore the structure, roles and tools a successful CoE typically employ.

About the Author

Scott is the Founder and President of The Synaptix Group and draws on over 30 years of senior level experience managing the design, development, and implementation of document based solutions, with a particular focus on Enterprise deployments in public and private sector.

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