What makes a successful Center of Excellence (CoE)? It’s a discussion that has taken place for years amongst enterprise buyers. Done right, CoEs can prove to be a valuable central resource that accelerates adoption of new technologies and approaches, delivering value. Done poorly, they can drain resources and create friction with other teams.
That’s the topic of a new joint study between process mining vendor Celonis and Fraunhofer FIT, which surveyed 214 customers earlier this year, across a range of industries and regions. The study’s aim is to better understand what makes a successful CoE, to provide best practice tips for other companies pursuing a similar operating model.
What’s interesting about the findings is that the Celonis customers getting the best return on their CoEs are the ones recognizing the importance of the human factors involved, rather than the technical ones.
But before we dive into those, it’s worth highlighting why a CoE can be valuable, particularly within this context of process mining. The data from the survey found:
92% of customers achieved greater transparency with a CoE
72% said that a CoE results in better and more impactful use cases being prioritized and implemented
75% agreed that a CoE delivers higher cost savings
Almost 60% said that a CoE results in greater speed of automation efforts
50% said that a CoE results in more effective decision-making in real-time
What’s most noteworthy, however, is that customers with a CoE were almost nine times more likely to have a positive return on their investment from their process mining initiatives.
However, it’s also worth pointing out that the study found that achieving a positive ROI was much more likely as process mining matures across the organization, with more processes, teams and business functions being connected. The critical tipping point seems to be at five processes connected, with 85% of customers achieving this point stating that their CoE investment had paid for itself.
Keys to success
One can infer from the above that a successful CoE, one that manages to scale process mining across an enterprise, combining a number of processes, is more than likely going to pay for itself. Which prompts the question of: how can a company make its CoE a success? Where success is a mature process mining operation.
The key point, the report states, is:
Most respondents agree that it’s the ‘human factors’ of a CoE, rather than the technical ones, that either make it a success and generate fast value, or hinder progress.
The most crucial success factor for a CoE, according to the customer results, is having an executive sponsor - with 94% of respondents stating this is key. The Second most crucial factor - according to 63% of customers surveyed - is having a committed and highly qualified team.
The report states that there is a strong and direct link between executive sponsorship and CoE success. Celonis notes that the best executive sponsors in this scenario:
Communicate often and over multiple channels
Formulate clear value targets
Use their position and influence to build a coalition of support
It’s that last point that we see time and time again when speaking with customers that have adopted a CoE model. The ones that are most successful are the ones that invest time speaking with multiple teams, understanding their core paint points, and connecting them with the CoE to offer quick win solutions. Building that trust and garnering support enables a better chance of success over the long term.
Another ‘human element’ identified by the survey is that 90% of customers said that having a change management plan in place, which is communicated across teams, where success stories are shared, is critical.
And in terms of common barriers to CoE success, customers cited:
A lack of executive sponsorship
Low engagement and support from the business
A lack of clear strategic narrative for the CoE
The report notes:
Again, these reasons relate to the human versus technical aspects of implementing a process mining CoE, which is why we consider having a proactive change management plan as a best practice.
Helpfully, the survey looked at what makes a successful CoE team, specifically in terms of team members. As noted above, it’s the quality of the team that’s important and matching the size of the team to the stage of process mining adoption in the company.
Teams can start lean, with less than five full time employees (for one to two processes connected for one department), building up to almost 20 full time employees (for five or more processes connected across five or more departments).
In terms of the make-up of a successful CoE team, the survey notes:
Obviously, at the beginning of a CoE journey, the role of the CoE Lead is critical. When advising customers on CoE setup and resourcing, Celonis recommends a CoE Lead who is not only technically competent and experienced in agile project management, but who is also a great networker, a strong advocate for change, and who can position process mining as a critical technology for strategic process transformation.
Ideally, the CoE lead is an entrepreneur within the company and proactively promotes process mining both vertically and horizontally throughout the organization.
In addition to the CoE Lead, a successful CoE will need technical and data-driven roles such as data analysts and data engineers. Customers confirmed that when a CoE grows and company-specific applications are created, IT application owners also become important members of CoEs in order to drive innovation for those applications.
Once set up, and the first use cases have been implemented, in order to scale, having access to dedicated subject matter experts becomes another best practice approach for achieving scale across the enterprise. These subject matter experts should “bridge the gap” between the CoE and the operational units, with the aim of understanding processes deeply, including pain points, and strategic objectives for the process.
But, as the report states:
The most important factor is to search for process experts who challenge the status quo and therefore are intrinsically motivated to drive efficiency.
Whilst this study is focused on CoEs that support process mining across an organization, the findings and best practice examples ring true with what I see when I speak to customers. It’s not enough to establish a CoE in isolation and adopt a ‘build it and they will come’ approach. What’s required is an outward looking, engaging team that is able to demonstrate value and understand multiple pain points. The study is worth reading in full if you’re looking to create a CoE internally.