Centers of Excellence — Do You Need One?
According to Forrester, a Center of Excellence is “a formally appointed and documented body of knowledge and experience on a particular subject area with the goals of providing expertise, managing governance practices, and supporting projects associated with the subject area.”
Centers of Excellence (CoE) can 1) make internal operations more efficient and productive, and 2) bring the latest knowledge, technology, and solutions to customer projects, giving the company with the CoE a competitive edge in the marketplace as an innovative leader.
Most CoEs are intent on finding, or developing, and deploying new technology tools, techniques, and best practices. CoE staff work across all disciplines within a company, with a focus on:
- Providing thought leadership and direction
- Establishing and promoting best practices
- Training, education, and support (including augmented or virtual reality)
- Breaking down silos
- Fostering cross-disciplinary collaboration
- Investing in innovation and R&D
- Implementing advanced or first-in-industry technologies and resources
- Becoming subject matter experts through education and training
- Making presentations at seminars and conferences
A CoE is marketed aggressively to customers and prospective customers to promote its expertise, thought leadership, and innovative problem solving in a particular field. Presenting at seminars and conferences is an excellent way to show a company’s technology, skills, and depth of knowledge for solving design or manufacturing challenges—especially through lower costs and greater speed to market.
Benefits of a Center of Excellence
A CoE is a resource for every employee, regardless of position. This results in a more collaborative corporate culture, where employees are encouraged to share their skills and expertise from different divisions in interesting and creative ways. An effective CoE leads to an improved problem-solving culture, which builds teamwork and productivity. The CoE can bring the same skills and talents to solving customer problems in collaborative and creative ways.
According to Perficient, a management consulting firm, in addition to the above goals, a CoE can also add value by:
- Optimizing the centralization of high-demand or unique resources for wider deployment
- Improving ROI through the development of reusable assets and best practices
- Improving speed to market and reducing maintenance costs through best practices
- Eliminating inefficient business practices (for example, duplication of tasks, or inefficient workflow)
- Developing innovative processes and solutions that enhance product quality and consistency/reliability of manufacturing processes and delivery
How to Build a Center of Excellence
“Some CoEs begin as informal or self-elected bodies comprised of experienced and knowledgeable personnel from within the organization, who may split their time between CoE duties and other roles within the company, while others may require dedicated staff in full-time positions,” states Perficient. To start your own, use the following guidelines:
- Create a management team for the CoE that develops mission/vision statements, including the desired capabilities and markets served
- Determine the resources needed to establish the CoE—this includes staff, dedicated space, technology and equipment, and financial/marketing support
- Build a team of CoE employees, whether promoted internally or hired from outside the organization; leadership must be committed to investing in technology and subject matter experts with the capability to produce results across critical KPIs
- Develop a timeline: how quickly a company wants to operate as a CoE will determine how aggressively it develops its CoE talent and infrastructure
- Establish and use ongoing learning principles to facilitate innovation, continuous improvement, and informed decision-making
- Design a marketing plan for the CoE for each market served, including a brand identity and name
The most successful CoEs understand industry trends, establish procedures, and align with current thought leadership, notes Erin Aldridge, director of product development at Project Management Academy. “Individuals best suited for a position within a CoE are self-starters interested in continuous learning and improvement of their skills and expertise.”
Building a CoE also takes time—any successful endeavor requires tracking, measuring, and reporting performance. “The same is true for a CoE, as metrics are essential for demonstrating success and securing support from critical stakeholders throughout the business,” Aldridge adds. “At the beginning of a new endeavor, a CoE should draw from internal and industry-accepted key performance indicators to define what targets and thresholds equate to a successful effort.”
Are There Standards?
Any organization that seeks to achieve business transformation should adopt and implement a CoE. However, can any company announce it is a CoE?
Technically, yes, but if the company has not done the work to develop a true CoE, it will quickly fail and damage the company’s reputation if it is unable to deliver on the pledged expertise and problem solving. To be seen as a leader at the forefront of its industry, a CoE must invest in the proper training, expertise, and credentials of its members.
A lack of standardization for designating CoEs can not only prevent them from fully achieving their intended effects, but also causes confusion among customers and business partners, which dilutes the significance of the CoE label and dampens its impact, says Joan Li, a researcher at the University of Pennsylvania.
Further, she comments, given the lack of standardization in defining CoEs, “it is not surprising that outcome comparisons between CoEs and non-CoEs have shown mixed results and that it is difficult to implement a successful CoE program. Quality metrics are hard to generate and even harder to measure, and the challenges that CoEs have are symptomatic of a larger system-wide problem in defining quality.”
One way to advertise excellence as a CoE is to be certified by highly recognized agencies and associations such as the American Society of Mechanical Engineers, ISO, or the FDA (Good Manufacturing Practices). In another example, contact centers can achieve the CoE distinction by meeting stringent best-practice metrics drawn from the world’s largest database of objective, quantitative data that is audited and validated by researchers from BenchmarkPortal, a global leader in the contact center industry.
Every CoE has a unique mission statement and projected scale of operation/influence. “Some start as informal entities comprised of skilled and knowledgeable employees who work on the CoE part-time, while others require full-time staff from the beginning,” says Aldridge. “Ultimately, a CoE will profoundly impact an organization’s culture and operational performance.”