As we learn to live in the era of unprecedented developments, organizations are embracing CoE digital transformation, and leaders thrive on the benefits of center of excellence.
A determinant factor of success during these difficult times relies upon adapting faster than the competition and holding a mindset of continued pioneering work. Although companies understand how crucial it is, surveys confirm that leaders remain notably concerned about the lack of innovation responses to operational disruptions. In fact, 57 percent of CEOs worry about not having an innovation process established.
However, the road to success hasn’t been easy, and access to expertise has been challenging. Therefore, companies aren’t maximizing their potential. Here’s where centers of excellence benefits play a leading role in helping organizations prepare and embrace the imminent digital business transformation.
Run, grow, and transform the business
Center of excellence benefits for transformation initiatives have become highly profitable for functions like IT or operations. Having a group of dedicated people in a specific area guarantees better leadership and direction in their knowledge domain, plus faster decision-making. Therefore, CoE focuses on providing training, strategic planning, implementation guidance, and resources to accomplish its primary purposes in three areas:
- Running the business. The benefits of CoE in this area can help to lower administrative transaction costs. From improving payroll and finance management to implementing IT service desk and network infrastructure.
- Growing the business. The focus is to improve productivity along with competitiveness and cost optimization. In this matter, CoEs take the form of integrated business services or internal consulting units. Sometimes they can also function as analytics services or application development centers.
- Transforming the business. Since every company is looking to be ahead in the ongoing digital race, CoEs focus on enterprise continuous transformation. Employing new strategic capabilities, markets, products, or even business models, is part of an intense innovation drive and alignment.
Other benefits of centers of excellence as cross-functional supporting units include taking responsibility for managing the execution and performance of a project lifecycle. They are essential for preparing businesses to thrive in the time of growing automation and the need for internal teams dedicated exclusively to overseeing a project’s success. Since 80 percent of companies that planned to employ AI in 2019 failed, CoEs have gained a lot more value. The role of CoEs in digital transformation also includes:
- Addressing matters of expertise in the industry to stakeholders
- Managing, selecting, and reviewing vendors
- Overseeing business processes before automation
- Advocating and recognizing areas where AI and other technologies can bring value
External and internal CoEs for business owners
Depending on business needs, leaders can decide what type of team they require. A group of experts from outside the company could be ideal for specific subjects. In other matters, an internal center of excellence can be initiated by current employees who are already experts in certain areas. These teams can also be a permanent division of the organization or function as a temporary setup. For example, an internal audit center of excellence ensures compliance with laws and regulations, helping companies keep reliable and up-to-date financial reports and data collection.
When companies are thinking of expanding their business elsewhere, they will need to outsource a temporary CoE to help them prepare and hire new workers. However, they will eventually need an ongoing CoE to train and manage these new external employees.
External and internal centers of excellence are necessary depending on the needs of each c-suite. Outsourcing an external CoE comes with many benefits since it will bring in new talent with specific skills and access to the latest technologies. Innovation will become an inherent part of the work process, following agility and cost efficiency improvements.
Types of CoEs
Different business units can benefit broadly from centers of excellence. Considering that they employ the latter’s expertise many improvements will take place. CoEs cover a wide variety of areas and below we share only a few examples that can be highly beneficial:
- Artificial intelligence (AI)
- Robotic process automation (RPA)
- The internet of things (IoT)
- Finance and accounting
- Human resources (HR)
- Agile development
- Innovation and research and development (R&D)
- Operational excellence
- Supply chain
- Quality assurance
- Business analytics
Benefits of center of excellence for transformation initiatives
To achieve a successful digital transformation, centers of excellence play a fundamental role in how the company evolves as they embrace new challenges. Undoubtedly, the operational agility and specialized capabilities of these units add value and many profits to organizations. Based on our experience, most enterprises capitalize on the following benefits of center of excellence:
- Cost: COEs empower companies to build reusable assets and streamline processes by getting rid of unnecessary practices and reducing costs.
- Resources: COEs can expand the scope of influence by engaging high-demand capabilities and knowledge across the company more efficiently.
- Quality: COEs increase the quality of products by promoting best practices across the organization plus improving customer experiences.
- Delivery: COEs accelerate delivery by analyzing pivotal business processes and eliminating bottlenecks.
Final thoughts
Although companies can experience more benefits of center of excellence, administrative support and ongoing assistance are required to succeed. Based on the maturity of each technical and functional level, the approach will depend on business needs, industry, and resources. As we still face a global pandemic and many transformation initiatives are taking place, business owners need to rise above the change and support their companies and those who work with them.
Working with industry leaders globally, we have learned that integrating a center of excellence has become the solution to cover all the bases and succeed in enterprise-wide digital business transformation. TEAM International has established specialized centers of excellence to collect unique expertise across the organization, explore new techniques, tools, and practices. Today we offer reliable software products to guarantee your IT transformation success. Contact us and learn how your business can benefit from our expertise in different subject areas.
