Building a Center of Excellence

Organizations are always looking for ways to sustain a competitive edge. Becoming a successful enterprise requires achieving a balance of efficiency and innovation. More corporations are establishing Centers of Excellence (COE), an increasingly popular business unit dedicated to enhancing operations throughout the organization. This article will define the Center of Excellence, explain its benefits, and offer guidance on setting one up.

In this article:

• What is a COE?
• Why create a COE?
  • The Purpose
  • The Benefits
• How to create a COE
• Conclusion

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What is a Center of Excellence?

A Center of Excellence, also known as a Competency Center, is a centralized team of employees who help develop and support an organization’s business requirements. This team is responsible for helping sustain a competitive advantage by identifying and deploying new technology tools, techniques, or practices throughout a business.

The COE is a resource for everyone in the company. In any organization, it should be the team stakeholders go to for help, no matter their position in the company. The COE should be a resource employees use to overcome obstacles and improve communication with other business units, which is especially vital in a remote work environment. A good COE team establishes a problem-solving culture, encouraging everyone to ask questions and seek answers when needed.

Why Create a Center of Excellence?

A COE is a team or employee group with a specific area of focus. They might come from outside the company or be current employees who continue to hold other business positions and work full-time or part-time. Therefore, COEs can be either an ongoing part of the business or a temporary setup, depending on the projects needing attention.

The Purpose

Businesses usually establish COEs to manage and ensure the success of specific initiatives within the organization. They can operate in many focus areas, such as the rollout of a new technology system or even establishing a Diversity, Equity, and Inclusion program.

The main goals and responsibilities of COEs include the following:

• Creating best practices
• Driving innovation and strategy
• Research and development to provide appropriate recommendations
• Empower employees through coaching, education, and training
• Eliminate silos and conflicts between departments throughout the organization
• Navigating the organization through proper resource allocation

COEs should guide their business through the successful implementation, management, and use of new technology or adapting, managing, and using a new or specific skill or concept.

For example, an organization might create a COE for project management to enhance the practice of project management across the enterprise. This COE would reshape the culture to focus on consistency in managing projects and implementing a project management process.

Another example of when a company might establish a COE is when integrating new human resources software. In this case, the COE would research and select the best software, help with implementation, and train employees on how to use the tool.

The Benefits

There are many reasons for developing a COE to support your business. They allow organizations to become more collaborative, creating an environment where employees share skills and expertise from different divisions. A COE also leverages data to solve business challenges and set the company up for success, developing best practices and disseminating them to the other departments.

Other ways a COE can benefit an organization include:

• Enhancing organizational efficiency by centralizing resources with high-demand and unique knowledge or skills and streamlining their contributions across a wide range of areas
• Maximizing ROI through the identification and development of reusable assets
• Optimizing delivery times, development, and maintenance costs by increasing efficiencies and leveraging reusable asset
• Consolidating duplicate efforts within the practice or organization
• Improving employee and customer satisfaction by delivering quality services and products
• Eliminating inefficient business practices and reducing the time required to implement new technologies and skills.

When successful, COEs are essential for measuring business success, achieving consistency, and augmenting overall efficiency and productivity.

How to Create a Center of Excellence

A successful Center of Excellence will have clearly defined principles informing its strategy. From standardizing processes and materials to tracking, measuring, and reporting results, here are six recommendations[EA1]  for creating a COE.  

1. Standardization

The central purpose of a COEis to define and create standards and best practices. This task requires developing and documenting templates, blueprints, and repeatable processes and methodologies for all significant work efforts.

Best practices should stem from industry standards and the COE’s practical experiences and successes. The most successful COEs understand industry trends, establish procedures, and align with current thought leadership. Individuals best suited for a position within a COE are self-starters interested in continuous learning and improvement of their skills and expertise.

Any materials produced will continue evolving and, at times, become obsolete to reflect the ever-changing industry standards and best practices.

2. Using Organizational Assets

The Center of Excellence should identify all the usable assets within the organization and the COE itself. Common assets within an organization include:

• People: The individuals or teams wielding specific or unique skillsets and experiences which can contribute to the COE’s efforts.
• Relationships: The individuals inside or outside the organization with influence in the industry. These personnel often have vital customer contacts, vendor relationships, or memberships with an industry group.
• Digital Resources: The organization’s program code, models, design patterns, algorithms, templates, tools, and utilities.
• Artifacts: These documents describe policies, guidelines, advice, best practices, etc.

COEs rely on these assets to simplify and augment the organization’s processes. The COE should be able to access all current and past projects and their materials to identify beneficial assets for use throughout the organization.

3. Measuring Performance

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. At the beginning of a new endeavor, a COE should draw from internal and industry-accepted KPIs to define what targets and thresholds equate to a successful effort.

Measuring performance also allows the team to improve weaker areas through training, research and soliciting expertise from subject matter experts. The COE can then display its strengths to stakeholders throughout the organization, securing further funding and support. In some cases, success can also be used in external Marketing efforts to help drive sales by demonstrating its products and publishing its documented successes.

4. Guidance and Governance

The COE cannot provide valuable input without a holistic understanding of the organization’s current or planned work. Its involvement with individual and organizational work efforts varies based on many factors. These factors include the complexity of the planned work, the previous success the organization has had with similar work, and available resources.

Guidance

Project managers must recognize the work of COE team members will not include any actual project work given the demanding deliverables. The COE should focus primarily on project acceleration and risk mitigation by guiding proven practices and reusable components.

Governance

A successful Center of Excellence team should also be able to govern work, provide guidance, and make suggestions. Given the depth of their work, COEs should have the authority to make decisions on any significant developments or methodology decisions.

5. Achieving Balance

Most COEs experience differences in the experience level of team members. This variance may cause a disparity between team members’ workload and responsibilities, reducing the team’s effectiveness and morale. Creating staff development plans that detail each member’s expertise and areas for improvement can help balance the team’s utilization, energy, and happiness.

Tracking team members’ work assignments and understanding their strengths and weaknesses will help with planning. Understanding each team member’s position will make assigning tasks they are best suited to own easier.

6. Subject Matter Experts

Because COEs often engage with stakeholders throughout the business, working closely with subject matter experts (SMEs) is vital. SMEs can cultivate support for the COE across the organization and help with projects when their specific skills and experience are relevant.

Organizations likely have SMEs who can provide valuable contributions. A few traits COEs should look for in potential SMEs include:

• Expertise in an industry, discipline, or business segment
• Eager about the opportunity to share expertise with others
• Experience contributing to the development of knowledge resources, such as white papers, seminars, POV pieces, and other content
• A proven track record for displaying thought leadership and an eagerness to learn about emerging trends and connect with other industry leaders.

Conclusion

A successful Center of Excellence will profoundly impact an organization’s culture. Every COE is different and begins at different stages in a company’s journey. 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. Although each Center of Excellence is unique, following the above roadmap will ensure it gets started on the right foot.