Strategies for Unlocking Knowledge Management in Microsoft 365 in the Copilot...
CoE Business Case
1. MARMARA UNIVERSITY
INSTITUTE FOR GRADUATE STUDIES
IN PURE AND APPLIED SCIENCES
CENTER of EXCELLENCE in
INFORMATION TECHNOLOGY
G. ERSEN CELEBI
FINAL WORK
Department of Engineering Management
ISTANBUL, 2012
ADVISOR
Prof. Dr. Neset Kadirgan
2. G. Ersen CELEBI, a Master of Science/Engineering Management student of Marmara
University Institute for Graduate Studies in Pure and Applied Sciences, defended his
final work entitled ―Business Case for a CoE‖, on 12 27, 2012 and has been found to
be satisfactory by the jury members.
Jury Members
Prof.Dr. Neset Kadirgan (Advisor)
Marmara University ...............(SIGN)..................
İSTANBUL, 2012
MARMARA UNIVERSITY
INSTITUTE FOR GRADUATE STUDIES
IN PURE AND APPLIED SCIENCES
3. APPROVAL
Marmara University Institute for Graduate Studies in Pure and Applied Sciences
Executive Committee approves that G. Ersen CELEBI is granted the degree of Master
of Science/Engineering Management in Department of Engineering Management
Program on 12 27, 2012. (Resolution no:).
Director of the Institute
Prof. Dr.
4. i
TABLE OF CONTENTS
ABSTRACT................................................................................................................................................iii
ABBREVIATIONS......................................................................................................................................v
LIST OF FIGURES....................................................................................................................................vii
LIST OF TABLES ......................................................................................................................................ix
1. INTRODUCTION ............................................................................................................................11
1.1. CoE Definition in the lecture...........................................................................................................11
1.2. Key characteristics of a (CoE):........................................................................................................13
1.3. Responsibilities: ..............................................................................................................................13
1.4. (CoE) Framework:...........................................................................................................................14
1.5. Key Performance Areas for (CoE) ..................................................................................................15
1.6. (CoE) Benefits.................................................................................................................................18
2. MOST COMMON CoE IMPLEMENTATIONS IN CURRENT IT INDUSTRY:..........................22
2.1. BPM CoE: ......................................................................................................................................22
2.2. Business Intelligence .......................................................................................................................26
2.3. PMO ................................................................................................................................................28
2.4. Test CoE..........................................................................................................................................30
2.5. Performance CoE.............................................................................................................................33
2.6. Integreation Competence Center (ICC) ...........................................................................................35
2.7. Banking CoE ...................................................................................................................................35
2.8. Finance CoE (FCoE) .......................................................................................................................36
2.9. SOA.................................................................................................................................................39
2.10. ERP CoE........................................................................................................................................40
2.11. Cloud Computing ..........................................................................................................................41
3. The Business Case: ...........................................................................................................................43
3.1. ―Decision through the opportunities and business needs‖...............................................................43
3.2. WHY CoE is Needed.......................................................................................................................47
4. COCLUSION....................................................................................................................................48
5.
6. iii
ABSTRACT
The Centers of Excellence (CoE), also known as Competency Center trend very
recently has gained traction within the IT department of large organizations. Although
the (CoE) concept itself is not quite new; however top companies in the sector are
combining (CoE) together with some other recent concepts such as BI1
, BPM2
, Cloud
Computing, SOA3
, mobile applications and services,..,etc accordingly to their marketing
strategies.
Definitions are vary in the lecture for CoE and the expected benefits, which you can
find some mixture of them as a part of this study as well but I found a lack of
information in the area of defining the conditions and drivers for an organization to
build a (CoE).
This study, aimed to shed a bit light for the questions raised above. Despite there are a
lot of sectors and the domains which may implement (CoE); this study primarily will be
focusing on IT area and IT organizations and their needs.
December, 2012 G.Ersen, CELEBI
7.
8. v
ABBREVIATIONS
(CoE) : Center of Excellence
CC : Competence Center
1-BI : Business Intelligence
2-BPM : Business Process Management
3-SOA : Service Oriented Architecture
4-BPR : Business Process Re-Engineering
5-TOC :Total Cost of Ownership
6-TOC :Theory of Constraints
7-BICC : Business Intelligence Competency Center
8-TCoE : Test Center of Excellence
9- SDLC : Software Development Life Cycle
10-PM :Project Management
11-PMO :Project Management Office
9.
10. vii
LIST OF FIGURES
.................................................................................................................................... Page
Figure 1.1 ROI for (CoE) ...........................................................................................................................12
Figure 1.2: Sample Coe Framework...........................................................................................................14
Figure 1.3: Sample CC Framework:...........................................................................................................15
Figure 1.4 Race pit stop..............................................................................................................................18
Figure 1.5 Forrester BPM Report...............................................................................................................21
Figure 2.1 Gartner Report :Top 10 Business priorities in 2012..................................................................22
Figure 2.2 Flavors of BPM (CoE) ..............................................................................................................24
Figure 2.3 BICC and BI Operating Model .................................................................................................26
Figure 2.3: Improving BI capabilities via BICC ........................................................................................27
Figure 2.4: BI Maturity Levels...................................................................................................................27
Figure 2.6: Key Interactions of CoE...........................................................................................................28
Figure 2.7 PPM CoE Corporate Relationships ...........................................................................................29
Figure 2.8 CoE: Coordinating function responsible for managing the organisation‘s portfolio.................30
Figure 2.9: TCoE Elements ........................................................................................................................31
Figure 2.10 TCoE extended capabilities.....................................................................................................31
Figure 2.11 TCoE model ............................................................................................................................33
Figure 2.12 PCoE Model............................................................................................................................34
Figure 2.13 ICC Models and comparison:..................................................................................................35
Figure 2.14 FCoe Model.............................................................................................................................38
Figure 2.15 SOA CoE Model .....................................................................................................................39
Figure 2.16 Cloud Computing Models.......................................................................................................41
Figure 2.17 Business Cloud Technical capacity View ...............................................................................42
11.
12. ix
LIST OF TABLES
Page
Table 2.1: FCoE functions and Activities ..................................................................................................38
Table 3.2 Business Units and Domains ......................................................................................................43
Table 3.3 Expenditure Formula..................................................................................................................44
13.
14. 11
1. INTRODUCTION
1.1.CoE Definition in the lecture
A center of excellence refers to a
team, a shared facility or an entity that
provides leadership, evangelization,
best practices, research, support and/or
training for a focus area.
The focus area in this case might be a
technology (e.g. Java), a business
concept (e.g. BPM), a skill (e.g.
negotiation) or a broad area of study
(e.g. health). A center of excellence
may also be aimed at revitalizing
stalled initiatives. [Wikipedia]
A team of people that promote collaboration and using best practices around a
specific focus area to drive business results. [27]
In today‘s world, the Centre of Excellence (CoE) applies to any organization who
wants to create and use excellent state of art and showcase its technological, service
and business oriented capabilities to the entire world in a competitive environment.
CoE is the combined effect of emerging business model and technologies. [53]
A Competency Centre or Centre of Excellence can be a highly effective way to
implement and sustain specialist capabilities where a consistent, expert and cost
effective service is required across organisational boundaries and where a
comprehensive view is required to ensure synergies are identified and exploited. [1]
Business competency centers are strategically placed business intelligence and IT
teams that work single mindedly to promote expertise, compliance and regulation
throughout an organization [3].
A center of excellence is a premier organization providing an exceptional product or
service in an assigned sphere of expertise and within a specific field of technology,
business, or gov-ernment, consistent with the unique requirements and capabilities
of the COE organization. [37]
Also known as a Center of Excellence (COE) or a Center of knowledge, a
Competency Center endeavors to encourage and provide business intelligence (BI)
skills, standards and best practices, which are not limited to a single project; its
benefits permeate throughout a division or organization.
15. 12
A (CoE) is essential for maximizing the effectiveness and quality of your business
and for greater success and increased value, at less cost and in less time. The end
result is of course an efficiently run business with improved technology
management, tremendous value to IT, and successful end user adoption.
A (CoE) initiates all over development- of people, technology and the entire
process. The idea is first to ensure success and later to sustain that success.
Centre of Excellence (CoE) refers to creation of assets for an organization and
reaping maximum business benefits from the usage of such assets. The objective of
creating CoE for any organization is always customer centric and is meant for
providing unique solutions to their customers. [53]
A center of excellence an organizational unit that embodies a set of capabilities that
has been explicitly recognized by the firm as an important source of value creation,
with the intention that these capabilities be leveraged by and/or disseminated to
other parts of the firm.
Centers of excellence represent a focus for a superior set of capabilities within the
firm, including tangible resources such as equipment, licenses, and patents, and
intangible resources such as knowledge and experience capabilities that are able to
create value for more than one line of business.
Figure 1.1 ROI for (CoE)
[4]
16. 13
1.2.Key characteristics of a (CoE):
Focus on a particular domain of expertise
Takes an enterprise wide view, enables reuse by identifying commonality
Provides a shared service across the enterprise
Has an End-to-End lifecycle responsibility, e.g. from requirements definition
and architecture through to operational support
Provides thought leadership, awareness of the market and how best practice can
be applied to the organisation
Communicates its activities and disseminates knowledge
Has authority for its domain of responsibility
Delivers clearly defined capabilities, boundaries, roles and responsibilities
Provides strong process, methods and governance
Dedicated small core team of highly skilled resource
1.3.Responsibilities:
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.
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 should be able to demonstrate they are delivering the
valued results that justified their creation through the use of output metrics.
Governance: 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.
17. 14
1.4. (CoE) Framework:
A COE is an organization recognized as a world leader in accomplishing its mission. In
this framework, that accomplishment is characterized via the following dimensions:
Figure 1.2: Sample Coe Framework
The framework and the approach to developing the appropriate criteria were derived
from elements of both the balanced scorecard (BSC) [Kaplan 1998] and the Baldrige
Criteria for Performance Excellence [Baldrige 2008].
18. 15
Figure 1.3: Sample CC Framework:
[1]
1.5.Key Performance Areas for (CoE)
1.5.1. Internal business process:
Has the operational work system, capacity, and capability to accomplish its
assigned mission in an outstanding manner where
o its operational work system is aligned with organizational needs as
determined by the organization and is repeatable, integrated, and
applied consistently
o it has the capacity (environment) to accomplish mission or tasks (e.g.,
equipment, facili-ties, work, and support processes exist and are in
use)
o it has the capability (leadership, both management and technical),
knowledge and skills, and an education system for all employees
exists and is in use
Consistently equals or exceeds established effectiveness and efficiency
requirements in its measured operational performance in accomplishing the
assigned mission.
Collects and uses measures to make management decisions in managing the
internal business
19. 16
1.5.2. Customer Focus:
Provides measured, customer-focused performance5 addressing customer
satisfaction
Elicits customer needs or requirements proactively and collaboratively
Responds in a timely manner to customer requests
Delivers customer-defined, high-quality products and services
Anticipates customer issues and problems compatible with the COE mission
1.5.3. Leadership:
Has proactive leadership to create and promote an environment for
empowerment, innovation, organizational agility, and organizational and
employee learning
Has senior leaders intrinsically involved with setting organization
performance goals and expectations, setting and deploying organizational
values, establishing short- and longer term direction focused on creating and
balancing value for customers, their customers, and other stakeholders
Has senior leaders who communicate values, vision, directions, key
decisions, and expectations through the leadership system to all employees
Has senior leaders regularly reviewing organizational performance for
improvement purposes and needed actions
Has senior leaders focus on sustaining and growing the organization in terms
of both the depth and breadth of its expertise
Has senior leaders who focus on finding and sharing new insights that relate
to both the problem space and solution space relevant to the COE
Has senior leaders that embody the value of ―learning is never over‖ through
their visible, continual learning in both traditional and new areas of enquiry
Has senior leaders who can facilitate appropriate interactions with leading
academic and practitioner organizations with the fields relevant to the COE
organization
20. 17
1.5.4. Innovation and Learning:
Has the demonstrated and proven ability to incrementally innovate and
improve
Has the demonstrated and proven ability to anticipate the direction of
promising solutions to address the COE‘s problems
Has the demonstrated and proven ability to introduce and gain traction for
revolutionary as well as incremental innovations
Has the demonstrated and proven ability to develop the transition
mechanisms needed to turn innovations into accepted technology
improvements
Has the demonstrated and proven ability to create and leverage the value
network needed to support introduction and deployment of innovations that
are relevant to the COE‘s customers and their customers
Has an environment that fosters both incremental and innovative learning
Develops, institutionalizes and applies leading-edge technology in the
accomplishment of its COE mission
1.5.5. Financial:
Has a financial management system that supports advocating effectively for
both incremental and revolutionary innovations, as appropriate for its
domain
Has an established financial management system that accommodates the
organization‘s needs to accomplish and improve its mission performance
Has and implements a financial management system that is sufficiently
flexible to accommo-date customer needs and changes in customer
requirements
Has a financial management system that allows appropriate differentiation of
non-recurring and recurring costs related to proposed innovations
21. 18
1.6. (CoE) Benefits
Figure 1.4 Race pit stop
The key question for many CIOs today is not whether the CoE approach would benefit
the organization, but rather how best to make the transition to the CoE model from
existing state.
Those who have followed disciplined approach towards setting –up and implementing
CoE successfully have realized many business benefits. CoE offers the means to
coordinate the effort by creating a common set of resources, models and tools to meet
the broad set of business needs—while taking advantage of existing organization
expertise, standards and infrastructure.
IT organizations of all types and dimensions are embracing the CoE model as a practical
way of consistent and continuous ally improvement of their business operations.
Industry analysts also support the move to the CoE model.
A CoE is an organization, focused on optimizing application or service characteristics
such as quality, performance, or availability. It provides management an automation
platform for processes, consulting, and support services, leadership as well as advocacy
to optimize these attributes.
In IT world, CoE acts as a central point of contact to facilitate collaboration between the
lines of business, enterprise architects, database administrators and application
developers. It helps in speed adoption, improve knowledge sharing, lower the TOC5
And broaden the reach and context of enterprise application deployment, migrations,
consolidations and upgrades.
CoE Brings together a dedicated team of appropriate domain expertise and enables the
organizations to identify core patterns of integration, share best practices, leverage skills
and standard tools across the enterprise.
22. 19
A CoE provides a central source of standardized products & services with expertise, and
best practices. It can also provide the entire organization with visibility into quality and
performance parameters of the delivered application and support functions, helping
them to keep everyone informed and keeping the applications and services aligned with
business objectives.
The strategy and roadmap for CoE are required to launch and sustain the business
needs. Without a COE, you will lack the necessary ecosystem and opportunity to
optimize resources, funding, competencies, and governance structure, hence the
ideology of the CoE should be in synchronization with the philosophy of the
organization business imperative. [53]
Providing cost-efficient support:
o Time and cost savings achieved through rationalisation and re-use of e.g.
patterns, business processes and services etc.
o Environments and supporting technologies (i.e. source control, web
hosting systems, test environments), are shared and their use maximized
leading to reduced costs and implementation time-lines.
Delivering resourceful performance.
o Greater predictability achieved through consistent estimation, process
and management controls
o Faster learning curve and lower blended rate achieved through standard
methods and approaches. Training is co-ordinated and shared across the
CoE to ensure maximum take-up. Trainers become CoE specialists and
can provide more specific knowledge of theuse and application of the
technology and methods.
Eliminating IT holdups.
o Operational efficiency and excellence achieved through the use of best
practice tools and approaches across the enterprise
Managing the technical infrastructure
o Common data models are developed which makes future integration and
reuse of rule bases possible.
Maintain and enhance business processes, methodologies, and
practices.
o Reduced rework through consistent and coherent use of processes
and methods and the implementation of appropriate quality standards
and checks
o Ability to market internally in order to be able to increase use of the
technology and grow rule development practice.
23. 20
Promote a single business standard across the enterprise.
o Consistent and appropriate sourcing decisions and service provider
management ensuring optimal cost / risk evaluation and predictable
delivery.
Promote familiarity with business knowledge across the
enterprise.
o A flexible approach to project engagement and service delivery
suitable for customers with varying levels of internal capability
Encourage development of advanced skill sets.
o A staff career structure can be developed to promote staff and improve
retention.
Provide a single point of contact for business relationships.
Decreased time to market.
o The rapid response capability of the CoE helps reduce total time for
development and servicing, resulting in faster time to market and on-time
response to business needs — all at a lower total cost.
Culture of quality
o The transition from islands of expertise to standardized quality
processes and toolsets helps focus the organization on quality issues and
speeds the evolution to a culture of quality.
High-performing companies make business process improvement a core competency.
These leading firms share a common characteristic: they continually find clever ways to
improve the process of process improvement.
As companies develop successful BPR4
projects, they‘re giving greater thought as to
how to capture, promote and disseminate the best process improvement ideas that are
created throughout their organization
As a result, high-performing companies are implementing business process competency
centers or business process centers of excellence (CoE). These committees set priorities,
create a strategy map, standardize procedures and collect best practices for business
process initiatives.
―A center of excellence provides visibility in the company about the idea of business
process improvement, and helps the idea catch on in organizations that might otherwise
be resistant to change.‖
24. 21
According to some research almost half of the enterprises that
reported clear and measurable benefits from their BPM efforts had a BPM
Center of Excellence (COE) in place; only 10 percent of the group reporting mixed
results had a BPM COE in place.
It is important to note that a COE does not compete with other industry-accepted
practices such as Lean, TOC6
, and Six Sigma, which target some of above activities.
Rather it complements and leverages any existing expertise and process initiatives in an
organization. [63]
Forrester study of BPM shows that having a center of excellence significantly enhances
the ability of an organization to meet or exceed the goals that center supports.
Figure 1.5 Forrester BPM Report.
Source: Forrester October 2007 US and UK Enterprise Architecture and Business Process Management Online Survey
25. 22
2. MOST COMMON CoE IMPLEMENTATIONS IN
CURRENT IT INDUSTRY:
Since (CoE) concept can be applied to different line of businesses, in this chapter you
can find some examples and a brief overview about them.
2.1.BPM CoE:
Figure 2.1 Gartner Report :Top 10 Business priorities in 2012
Particularly in light of today‘s volatile economy, organizations are looking to
trim the fat off their operations. In a receding market, process agility is an
objective that organizations strive for. In order to leverage business
opportunities with a short window of execution, an organization must be able to
adapt its processes quickly and efficiently.―
[BPM and Beyond: The Human Factor of Process Management, October 2008]
The most common types of actions IT executives have been recently taking to
increase IT's business orientation and cut costs through the adoption of standard
management processes, shared services, and coordinated IT governance.
To turn initiatives into sustainable programs that continuously improve and
transform processes, business process professionals must establish centers of
excellence (COEs) as quickly as the organization can support them.
26. 23
Advanced COEs in areas like ERP and BPM drive process innovation from the
customer perspective, support business transformation led by senior executives,
while also optimizing investments in process resources across the enterprise.
When implemented as a shared service, or distributed across functional units and
cross-functional processes, COEs connect business stakeholders with skilled
process pros, service suppliers, and IT vendors through five essential
capabilities:
1) clearly articulated portfolios of business process services;
2) formalized relationships with business stakeholders and suppliers;
3) effective working structures for delivering the portfolio;
4) efficient service management processes;
5) integrated quality assurance.
―Best practices and case studies show that while business process technologies,
methods, and tools may differ from initiative to initiative, mature COEs employ
similar organizational and management practices for greatest impact.‖ [57]
Regarding to experts, a center of excellence is ideal where there are multiple
players contributing to each project. A BPM center of excellence often consists
of IT and business people and serves as a formal hub to coordinate goals,
priorities and governance for process implementations.
If centers of excellence are tied to BPM success, why aren‘t more people
implementing them?
One reason might be credibility. For organizations new to BPM, it‘s a business
culture change. Justifying the value of BPM isn‘t always easy, especially
without proof.
―That‘s why it‘s often easier to implement BPM successfully on a couple of
projects first and then set up a center of excellence as phase two.‖ [66]
BPM COE (Center of Excellence) is essential to an enterprise BPM
strategy.However, positioning of the COE within the organization is a key
success factor. There are various flavors of BPM CoE that serve different
purposes and most organizations would go through some of these before
reaching the right positioning and right level of maturity. Thereare various
flavors of BPM COE – sometimes in combination, sometimes in progression:
27. 24
Figure 2.2 Flavors of BPM (CoE)
2.1.1. Competency & Resource Management: Focuses on competency
development and resource management, and formulating the knowledge
frameworks, standards, methodologies and best practices. The primary
focus being brainpower and not necessarily as a hub for all the hardware
and software requirements too.
28. 25
2.1.2. Solutions Center Model: For organizations that have a little better laid
out plan on the iniatives on BPM implementations, this model would
provide a more efficient delivery and governance around initiatives. This,
however, still resides more on Technology side due to the nature of the
projects.
2.1.3. Factory Model : This offers a better chargeback and resource usage
mechanism between the business needs and Technology capability. This
also works better for a more well-defined BPM strategy where the
definition of the projects are more tuned to the business process objectives
and enterprise strategy. This moves governance closer to business and a
better handshake is possible.
2.1.4. Business Process Centric Factory: This is driven by the process
centricity, the KPIs and the process improvement objectives. The Process
owners more involved throughout the initiatives and really help focus on
business outcomes.
High-performing companies make business process improvement a core
competency. These leading firms share a common characteristic: they
continually find clever ways to improve the process of process improvement.
Ideally, though, a CoE doesn‘t simply perform the role of process cop, but
collects the best ideas throughout the enterprise, so the skills and experience of
all employees can be leveraged.
―If you‘re doing it right, a CoE is keeping a knowledge library and being
proactive about presenting ideas for constant process improvement,‖ [26]
One study found that nearly half of companies that experienced a clear,
measureable improvement from BPM have implemented a CoE. Of the
companies that failed with BPM, a mere 4 percent have a CoE.
Various studies suggest that organizations with a Process Center
of Excellence can see benefits such as:
Increased usage of business process management practices
Increased business user satisfaction
Better understanding of the value of BPM
Increased productivity
Increased decision-making speed
Decreased staff costs
Decreased software maintenance costs
Increased operational consistency
Higher knowledge retention and faster transfer
29. 26
That is achieved by providing functions in and support for:
BPM methodology
Process engineering
BPM tool usage
Training and skill transfer
Knowledge management
Repository of reusable artifacts
In addition, a formal BPM strategy through a COE can help with
reducing the overall cost of automating business processes.
2.2. Business Intelligence
BICC7
can be defined as a team of dedicated Business and IT specialists
accountable for defining, owning and managing the execution of the company‘s
BI1
strategy and agenda. While many leaders, stakeholders, contributors,
managers, analysts, developers and user communities participate in BI1
efforts in
one way or another, a BICC7
serves as the catalyst and glue that creates,
promotes ,and holds together the overall BI1
operating model.
Figure 2.3 BICC and BI Operating Model
[50]
The BI1
program is not simply the sum of the various projects and independent
efforts, but instead reflects a comprehensive network of people, processes, and
technology working as one integrated operating model supporting and enabling
those projects and efforts.
30. 27
Figure 2.3: Improving BI capabilities via BICC
[50]
Figure 2.4: BI Maturity Levels
[50]
A company whose strategy takes a holistic approach to their BI1 program will have a
better opportunity and capability to minimize risks and maximize value. A mature
BICC7 set of capabilities (people, process, technologies) enables quick reaction to
changing business needs, including:
Better enterprise-wide decisions
Fewer information disagreements
Less effort to develop and maintain information over time
Lower long-term technology costs with better scalability
Figure 2.5: BI architecture
31. 28
[42]
2.3. PMO
A CoE can accommodate the possible mix of roles and activities related to
assurance, improving programme, PM10
capability and capacity, as well as
monitoring and controlling the departmental portfolio.
The role of CoE is to support the senior management of the organization in
achieving successful delivery of the portfolio. The activities of CoE will involve
interactions upwards to the management board, inwards to individual programmes
and projects, and outwards to external bodies, other CoEs and delivery partners.
Figure 2.6: Key Interactions of CoE
33. 30
Figure 2.8 CoE: Coordinating function responsible for managing the organisation’s portfolio.
2.4.Test CoE
When the 2011-2012 World Quality Report survey participants were asked whether
they have already implemented a Testing Center of Excellence, only four percent
indicated that their companies have a fully operational TCoE8, and an additional six
percent said that they have started the effort of establishing a TCoE8 within the past
two years.
35. 32
[39]
2.4.1. Benefits of TCoE
The benefits of TCoE can be cathegorized as quality, time and cost; and
can be achieved in timely manner.
2.4.1.1.Quality: Ad hoc test methods used by organizations are capable of
identifying 70% of the defects in average. The TCoE model uses
formal steps for test planning, execution and verification and skilled
resources to raise removal rate significantly 95% for functional
testing and 98% for regression testing.
2.4.1.2.Cost: Cost savings achieved from the reduction of overall defect
density in the SDLC79. In Most large enterprises, the IT budget is
approximately 4%-8% of the sales budget. Any savings on this is a
direct add-on to the bottom line.
2.4.1.3.Time: TCoE Model helps reduce time to market by effective usage
of automated testing tools and contunially improved operations.
Newer services can be offered to customer in shorter period of time
and with higher quality.
36. 33
Figure 2.11 TCoE model
[39]
2.5.Performance CoE
2.5.1. The business value of the Performance CoE model :
2.5.1.1.Lower costs, higher revenues: The efficiency of the Performance
CoE model helps cut the cost of test lab infrastructure and operations
while improving application performance, resulting in more satisfied
end users and competitive advantages that drive revenue.
2.5.1.2.Higher profits: The Performance CoE model delivers better
application software, more satisfied end users, faster deployment of
high-performance software-driven services, and, ultimately, increased
competitiveness and profitability.
2.5.1.3.Improved business productivity: Higher application performance
typically yields higher end-user productivity. For example, the
productivity of a clerk entering orders into an ERP system depends on
the response efficiency of the system.
2.5.1.4.Decreased time to market: The rapid response capability of the
Performance CoE helps reduce total project time, resulting in faster
time-to-market of high performance applications and on-time
response to business needs—all at a lower total cost.
2.5.1.5.Greater flexibility: Organizations can implement a Performance
CoE on a small scale, leveraging existing resources, and expand its
capabilities as the value is proven.
37. 34
2.5.1.6. Tighter alignment: By defining and measuring Key Performance
Indicators (KPIs), the Performance CoE helps keep the application
performance aligned tightly with business needs.
2.5.1.7.Career advancement: The Performance CoE model creates a
compelling new career opportunity for IT professionals, leading to
better HR, and helping the organization recruit and retain top talent.
2.5.2. Specific support services provided by a Performance CoE include:
Performance benchmarking
Performance testing
Capacity planning
Infrastructure optimization
Problem diagnostics
Examples of typical KPIs include:
Number of customers
Number of requests for service
Total number of projects
Number of references
Revenues
Gross margins
Figure 2.12 PCoE Model
[8]
38. 35
2.6.Integreation Competence Center (ICC)
2.6.1. Value system for the ICC (Integration Competence Center)
A value system is set of principles and hypotheses that enterprise
strategically adopts in order to govern materialization of the enterprise
system. Key points are:
Integration Technologies will change
Multiple Integration Technologies will co-exist
Objective of ICC is to deliver value and not ―deploy technology‖
There is lot more to Enterprise Integration Management than just
Technology
Integration Systems should be managed like an enterprise portfolio
Figure 2.13 ICC Models and comparison:
[7]
Enterprises have option of adopting a strategy that takes best of both models.
2.7.Banking CoE
Many banks and financial institutes are currently undergoing changes regarding
their IT Infrastructure and Business Applications landscape. Their challenges are
among others to increase efficiency, reduce costs and add value to their clients by
creating innovative products and services.
Banking Competence Center (BCC) addresses those challenges in a unique
way with specialists embedded in the national and international enterprise networks.
39. 36
The specific knowledge about Banking Systems coupled with a large experience
in the financial services industry makes (BCC) a strong and reliable partner to help
clients manage, migrate or host their IT Infrastructure and Business Applications.
2.8.Finance CoE (FCoE)
2.8.1. The changing FPM landscape and a growing need for Finance
Centers of Excellence
To understand why an FCOE makes sense for companies with a full-
function FPM solution in place, or for any company looking to add to the
FPM solution they have, it‘s important to look at how the financial
performance management landscape is changing. In the past, FPM was the
purview of the CFO and finance organization — with very little executive
or organizational involvement. Finance gathered up as many spreadsheets
as possible and accessed static, historical data and created enterprise plans,
budgets and forecasts — sometimes collaboratively with business. They
typically looked at actuals and decided on a percentage increase for
earnings, revenue and products, or a percentage decrease for expenses. This
has never been the ideal way to go about FPM. We learned that expense
reduction was not at the top of most CFOs‘ agendas [―IBM 2010 Global
CFO Study‖]. Instead, CFOs ranked ―providing inputs into
enterprise strategy‖ as their most important priority. CFOs indicated that
their role as strategic advisors is broader and more important than ever.
More than 70 percent play a critical role in enterprise risk mitigation,
business model innovation and selection of the key metrics
linking performance to strategy execution. The pressure to help
the business make all manner of decisions better, faster and with more
certainty is intense. As we have learned in the last few years, the global
economy is unpredictable, prone to substantial and sudden highs and lows.
To keep a competitive edge, companies must be prepared to make
decisions in compressed time frames compared to the last half of the 20th
century, responding quickly to changing business and marketplace
demands. As a result, a comprehensive FPM initiative— one that assures
that a company‘s success will not be a flash in the pan, but long-term —
can now connect operations and finance for continuous enterprise planning.
2.8.2. What is an FCOE and what does it do?
As organizations realize that FPM is more than a tool, they have begun
investing resources to help manage performance more effectively and gain
competitive advantage. To approach FPM as a strategic asset, many
organizations are combining IT staff and FPM users into coordinated
teams. These emerging organizational structures bring together people —
with interrelated disciplines, domains of knowledge, and experience—with
well defined processes, standards and technology. The goal is to achieve
greater business efficiency on a foundation of trusted information, and
deliver more effective decision-making across the enterprise. These teams
form the foundation of an FCOE because, to paraphrase the multiple
40. 37
definitions available, a center of excellence is a group of people who
collaborate to promote best practices in a specific focus area and
drive successful business outcomes.
2.8.3. What benefits come with a Finance Center of Excellence?
To ensure that you can support your organization‘s long-term performance
agenda, you need a managed, repeatable approach. An FCOE can help your
organization define the knowledge, standards and resources that can wring
more value out of your FPM solutions and technology. An FCOE
is essential to the strategic deployment of FPM technology because it:
Maximizes the efficiency, use and quality of FPM everywhere in
your business
Drives end-user adoption by streamlining integration with routine
planning and analysis workflow
Encourages alignment between IT, finance and business areas
Increases your enterprise‘s understanding of performance
in finance terms (the ―Financial IQ‖)
Reduces organizational overhead associated with
maintaining budget, plan and forecast consistency and use
Increases the success of FPM solution and technology deployments
by helping them deliver more value, at less cost and in less time
Helps you base your strategies on business priorities for maximum
ROI and added value
Improves business agility and technology management, which in
turn drives business efficiency.
The finance center of excellence consists of a team of four people
who support the enterprise planning, budgeting and
forecasting functions in a variety of ways:
Bottom-up budgeting and forecasting templates — standard and
customized
Support for identifying business drivers and key metrics,
particularly with a new business or line of service
Development of the majority of the planning applications
Review of models built for solutions that planning application, even
at the metadata level to ensure consistency
Planning and forecasting education:
Twice annually, an update on the planning system — what it does,
how to work through a monthly forecast and/or budget
Assistance with standard and ad hoc reporting across the year for
business and for management
42. 39
[23]
2.9.SOA
SOA is a way to design software for distributed computing environments that
involves the use of independent services, or activities that provide a certain business
function, to support the needs of a business. Not only are these services used to
exchange information and support business processes, but they can also be reused
by other applications.
Given that SOA implementations can have a huge impact on IT and the organization
as a whole, experts advise setting up some sort of governance and best practices
effort to help ensure a successful migration. For many, part of that effort will
include creating a COE to gather information about SOA implementations and to
leverage best practices within the organization.
The center of excellence can act as the governance body for an SOA
implementation, overseeing what goes into a new architecture that the organization
is creating and ensuring that the architecture will meet the current and future needs
of the organization,
"It's a shift from being project oriented to building out an architecture with long-
term assets that are going to be used in future projects," he says. "That requires a
central group." [22]
Figure 2.15 SOA CoE Model
43. 40
2.10.ERP CoE
ERP is a long term commitment. Without a center of excellence approach,
employees take undocumented knowledge with them when they leave. Dependence
on consultants leads to cost overruns.
An ERP COE will de facto have to establish goals, measure performance, and
demonstrate the value to the organization.
To be successful, the goals of the ERP COE must be aligned with the goals of the
business. Therefore, IT must understand what they are. This is different from the
sundry, ad hoc, and ad infinitum requests of LOB managers. IT management must
seek to understand not only the company's short- and long-term goals, but also its
strategies, culture, politics, policies, and values.
An ERP COE can be mutually beneficial to both IT and its brethren LOBs. If the
ERP COE can help to solve problems, be prepared when issues arise, and contribute
to the growth and/or betterment of the organization, it will become a valuable tool
and IT may come to be held in higher esteem.
44. 41
2.11.Cloud Computing
Enterprises require a host of custom applications to manage day-to-day business
processes. Historically, this means supporting three IT layers: (1) the
Applications themselves; (2) the Platform needed to develop them; and (3) the
underlying infrastructure; each with its own support and maintenance costs.
More and more organizations these days are looking to shift this IT paradigm by
building business applications quickly, using off-the-shelf capabilities without
worrying about application upgrades or infrastructure scaling. The advent of
‗Cloud Computing‘ has provided businesses with such a lightweight alternative.
Almost all well known global IT and Consultancy firms have already built their
(CoE) in different areas on the world which specified in Cloud Computing
technologies.
Figure 2.16 Cloud Computing Models
[69]
45. 42
Figure 2.17 Business Cloud Technical capacity View
[74]
It is possible to extend the list of the implementation areas above (e.g. Software
Development, Enterprise Architecture) though, however it is not needed in this context;
please see the recommended readings section for further details.
46. 43
3. The Business Case:
3.1.“Decision through the opportunities and business needs”
This is the core part of this study to clarify, why an organization decides to build an
(CoE) while there are vary of concepts to improve the efficiency, productivity and
quality also reduce the cost such as Lean, Six Sigma,…,etc.
For instance most of the symptoms identified by BPM and BPR as mentioned earlier
would lead an organization to consider whether a (CoE) is needed or not.
It is very common that corporate organizations continuously review and restructure their
processes in order to optimize the ultimate benefits. Although such initiatives add value
in holistic approach and could be considered as a success from process engineering
perspective; however by the time either by nature of the business itself or based on the
changing market needs these processes may cause some disadvantages for specific
business domains and it may not be efficient to redesign all the processes for the sake of
one business domain or unit. Actually this the reason why (CoE)s by definition response
to needs of a specific Business Domain/Unit.
To be more specific I will be referring to tables below to explain how some business
domains could feel the impact more than the other ones.
Table 3.1 Processes
Process Time Cost
Project Man. X C1
Software
Development
Y C2
Change Man. Z C3
Security
Man.
Q C4
Hosting (Inf.
Man)
W C5
Support T C6
Test Man. S C7
Performance
Man.
R C8
Table 3.2 Business Units and Domains
Business Unit #Domain # Hosting
Services
Expected
#Projects 2011
Expected
#Projects 2012
A 20 400 50 250
B 30 500 120 40
47. 44
C 40 1000 100 60
D 30 600 90 70
Sum 120 2500 410 420
For instance IT department that providing hosting, consultancy software development,
project management, security, change management, performance, test and support
services of a corporate, which have different business units and domains. As you can
see the figures above in the Table 3.1 and Table 3.2 IT department could achieve a huge
financial success by making major cuts for C5 and W in 2010-2011 due to high number
of the hosted services for all the business units even with minor reduction for the rest of
the processes.
When Business unit A completes the financial analyses for 2012 may find out that it
won‘t be financially effective to work with internal IT department for the new projects.
The reason is not very complicated and self explanatory once the programme budget
formalized as in the following table for 2011 and 2012.
Table 3.3 Expenditure Formula
Expenses of Business Unit A Year
[400 * {(W *C4)+ (Q*C5) + (T*C6)} ]+ [50 * {(X*C1) +(Y*C2)
+(Z*C3)+(S*C7)+(R*C8)}]
2011
[400 * {(W *C4)+ (Q*C5) +(T*C6)} ]+ [250 * {(X*C1) +(Y*C2)
+(Z*C3)+(S*C7)+(R*C8)}]
2012
As described in the Table 3.3 and Table 3.2 the total number of the projects has not
been increased significantly for 2012 but there has been a significant increase in terms
of number of the project for business unit A.
Because the previous improvements on the IT processes haven‘t been as successful as
the Infrastructure Man., Security Man. and Support for the other processes (it may not
be targeted at all) now IT department might be losing certain amount of business.
Probably business can sign a contract with an external company to deploy all the
projects for 2012.(Business may still want to keep hosting the services internally)
This is the reason why (CoE) also called as Competency Center. Now might be the right
time to consider build an internal (CoE); in order to response to the business needs with
a skilled group of people and deploy all the projects in a way that business unit A would
find effective, meantime IT organization gain some benefits on top of keeping the all IT
business functions and resources utilized as well. Main decision point here should be;
whether the (CoE) meets with the corporate strategy or not.
One of the reasons for business to choice internal (CoE) instead of a 3rd
party is
basically ultimate benefits, which would be reached possibly by the extension of the
similar needs to other Business Units and Domains.
48. 45
This approach can also be considered as creating a SME in the organization since most
of the time for such a case competitors are (focused on a specific business domain)
small or medium size enterprises. The advantage of SMEs is capability of acting and
delivering fast solutions for the customers without loosing too much effort and time due
to internal processes. Another advantage of an SME is holding necessary skills for the
business.
Very similar to case above enterprises also can build (CoE)s for the external customers
in order to deploy a specific product suit and/or technology such as BI, CRM, ERP,
Cloud Computing,…,etc.
Before explaining any other benefits of (CoE) for the Business Unit A in the same
scenario above, we can focus on another case, out of business environment to
emphasize the benefits in a simple form.
One of the most common project management case for all human beings is planning a
holiday. You can see the parallelism between following scenario and the one above.
Consider that you are planning a 2-3 weeks long holiday in a trans-Atlantic or trans-
Pacific country(s) that you haven‘t been before. What are the challenges that you need
to consider while you are planning your trip?
1. If you need a visa for the country(s)
a. How to apply
b. How long does it take to receive the visa
c. How much does it costs
2. Flight tickets:
a. How much does it cost?
i. Which airlines are flying
ii. Different dates different prices
iii. Any special discount that you can have.
b. Direct and transit flights
c. Comfort
3. Accommodation
a. Hotel, pension,…,etc
b. Standards & Price
c. Compliance to destinations in scope
4. Places to visit
a. You may lost in the number of the places that you can visit
b. How to find the most common advises
5. What to do
6. What to eat
a. Different tastes and (un)expected results
b. Quality of the foods
c. Prices
7. Health and insurance
a. What to do in case of emergency
b. What kind of insurance and preventative actions you may need.
c. What are the common issues and solutions.
49. 46
8. Entertainment
a. What to do?
b. When.
9. Security
a. List of the not to do(s).
b. Warnings.
10. If you are planning the trip for a group of people you need to optimize all the
possible combinations to fit for everyone‘s taste.
Of course we can extend the list with much more details but it is not needed at the
moment. If you go trough financial approach to find cheapest flights and
accommodations you can reduce the costs but you may not cover all the fun or you may
spent more time on the way, you may first find out (due to visa obligations) when you
can fly earliest,..,etc. Missing any important detail can cause a fail that your holiday
turns out a disaster.
To plan such a trip successfully may take too much time and also too much risk. What
about a travel agency which offers an end-to end service including visa application,
flight tickets, hotel bookings, guided tours and one price for all?
First of all you can get a better overview on the whole trip and you can try to plan very
similar trip yourself (or via another agency as well) and compare the price, quality and
time to decide.
This is exactly what expected from a (CoE) as well. A (CoE) should be guiding to
customer as a single point of contact, providing end-2-end overview on the requested
service and within competitive price, quality, time range. With different words
centralization is one of the benefits of (CoE) for the corporate.
Usually when you compare the prices, the one offered by agency should be much better
than you can get yourself. The reason behind it is the same with the example we had as
IT department; ―Business Case‖. The agency should have been identified the destination
for expected number of clients and booked flight tickets, hotel rooms accordingly
months ago with much lower prices than you can get.
Again referring to previous chapters probably one of the most important factors which
implies your decision to choose your agency for the trip would be their experience on
this destination (in case of equal budgets offered more than one agency) which is
actually in parallel with the maturity level for the (CoE).
50. 47
3.2.WHY CoE is Needed
Creating a CoE is a proven, yet flexible approach to obtain the strategic benefits of
business in all its forms, while maintaining control on costs, quality and operation.
CoE can bring tremendous benefits to an organization, by creating the necessary
state of art to provide service and product excellence to their valued customers and
users. CoE is used to provide the best technical solutions to the challenging,
complex, and evolving business needs of customers.
There are various reasons for organizations to create CoE and the most common are
as follows:
To keep pace with technologies and their impact on how business is conducted,
Organizations create dedicated Centers of Excellence (CoE) in various
technologies.
Creating a CoE addresses the need of organizations to maximize the usage of
hardware, software and highly skilled personnel to provide solutions to the
customers, partners or end users.
A CoE enables to centralize technology as well as create a repository of
solutions, and reusable components, sharing best practices and knowledge base.
Reuse of technology in some cases can be leveraged across different segments of
business.
It provides timely information, measures, KPI‘s to the users and senior
management throughout the organization enabling them to take appropriate and
timely decisions in competitive advantage.
If CoE is created for providing services and products then enterprises can
rapidly realize the benefits of a CoE by leveraging service and product expertise
with the help of consistent methodology and industry knowledge.
CoE for some organizations is meant for Implementing the most optimal
technologies, architectures, and frameworks to provide best-of-breed solutions
and services to the customers and Clients.
Some organizations use CoE to enable implementation of all needed regulatory
requirements.
A CoE enables collaboration across business units to ensure consistency and
integration of value stream, business data and governance models.
CoE can provide a governance framework that enables open participation
from every business unit, business partner, IT and other key
stakeholders.
It provides a clear mapping between business models and IT modeling
paradigms that can be used to clearly communicate business
requirements to IT.
51. 48
Create a focal point where business strategy can be translated
into operational reality.
4. COCLUSION
Current industrial environment is pushing all the organizations to review their
processes for improvement either in order to gain competitive advantage or just to
survive.
As explained CoE is one of the most powerfull tool or concept that helps to any
organization to achieve some specific benefits and improvements.
One of the most valued component for all the organizations in today‘s world, is
time. One of the purpose of this study is also helping the readers to find out if the
CoE is not the right choice for them to avoid wasting their time with try and fail
approach.
Basically what you may have achieved by reading this study is: ―if the CoE is the
right concept for your organization to adopt‖
I believe that you could find what benefits to expect and what is the purpose of
building a CoE.
In short the decision is depending on the expectations and the circumstances of the
organization and the business.
Decision makers should consider all the parameters, benefits and needs before
taking the final decision. It is not quite possible to establish a framework or
desicion support system based on a couple of standard questions or parameters to
answer this question . In contrary minor details can be quite significant for any
organisation when they are evaluating the necessity of a CoE.
52. 49
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57. 6. About the Author
Adı Soyadı : Goksal Ersen Celebi
Doğum Yeri ve Tarihi : Istanbul, Turkey. 1977
Yabancı Dili : English, Czech
E-Posta : ersen.celebi@dhl.com
Öğrenim Durumu (Yüksek Lisans öğrencileri son satırı silmelidir.)
Derece Bölüm/Program Üniversite/Lise Mezuniyet Yılı
Lise Fenerbahce Lisesi 1994
Üniversite Computer Science
Engineering
Istanbul University 1998
İş Deneyimi (Eklenecek bir bilgi yoksa silinmelidir.)
Yıl Firma/Kurum Görevi
2006- DHL ITS Production Services
2003-2006 Bizitek Technical project Manager
7. RECOMMENDED READINGS