At its core, a Center of Excellence (COE) is team of knowledgeable and experienced business process management, customer relationship management, and business domain experts equipped with an arsenal of best practices and tools. At its most mature state, it is a highly formalized and self-directing entity that is responsible for supporting business users and shepherding even the most complex projects to successful completion. The COE promotes the use of business process management as means of linking an organization’s strategy to their day to day operations.
The purpose of a Pega COE is to maximize the benefits of the Pega solution via a consistent, enterprise level strategy. It works to increase the success of all project teams while optimizing re-use programmatically across an organization.
The COE enables projects to share practices and assets and improves project quality. It provides best practices, knowledge transfer, expertise, experience, guidance, and re-useable assets to improve the success of project teams and the enterprise as a whole. In addition, the COE supports application development across the lifecycle of each initiative, from evaluating projects to providing guidelines, standards, and best practice for application design and implementation.
The COE typically focuses on the following areas:
- Project Evaluation
- Best Practices, Standards, and Methodologies
- Resource Development
- Project Staffing
- Project Monitoring
- Class Structure and Use Case Re-use
- Hardware and Software Environment
- Re-useable Software Repository
Many business transformation efforts begin as individual, loosely connected (or entirely disconnected) projects. Today’s operational landscape demands scalability and enterprise wide adoption – which means joining Pega projects together in a consolidated program and harnessing the full benefits of the Pega technology. There are three COE operational strategies that customers have undertaken, with varying levels of strategic impact and benefits
A Community of Practice (COP), while it has the least strategic impact, is the starting point for bringing Pega implementations from individual efforts within project teams to a more extensive discussion about linking processes and artifacts across the organization. The COP is defined by the following characteristics:
- It grows organically
- It has a volunteer structure and informal charter
- It’s goal is to share, educate, collaborate with fellow practitioners on projects
- It leverages internal libraries and discussion forums
A Competency Center (CC) achieves step function improvements that require more formalization and dedicated resources than the COP. A CC is defined by the following characteristics:
- It has a more formal organization with diverse skill sets
- It has a focus, momentum, processes and standards
- It resolves day to day activity challenges
- It achieves short to mid-term incremental improvements
- It serves as the foundation for a COE structure
A Center of Excellence (COE) is the most effective structure for achieving strategic benefits for your organization; however, it also demands the most investment. A COE is defined by the following characteristics:
- It has a very formal organization that combines different specializations into a common field of knowledge
- It addresses a short, medium, and long term roadmap
- It is closely integrated into the business
- It has a more aggressive business model
- It makes the most strategic impact an organization
The COE manages your knowledge sharing, your infrastructure, and your project execution so that you can reduce project costs, reduce project time to value, and reduce project risk.
As our customers reached a degree of maturity with their COE, they have realized significant results in areas such as organizational effectiveness, cost savings, speed to market, and product quality.
- JPMC saves hundreds of hours on each new project because of COE foundational and reusable assets. Guardrail scores are much higher because of increased design and build governance.
- UHG realizes a 10:1 return on investment performance for strategic investments. They are able to go from initial concept to launch in 6 months thanks to their more efficient processes and shared artifacts. And the company’s NPS score and employee satisfaction scores are higher, which they attribute to more comprehensive tools and ease-of-use.
- Bank of America’s COE drives realization of the target state architecture strategy, and their shared infrastructure enables consistency and an environment for projects to start more quickly.
- Jabil’s delivery time of enterprise applications is half of what it was prior to its COE. They also have seen an increase of 75% in first pass yield due to DCO.
- Wells Fargo attributes new alliances forged due to the sharing of case studies and lessons learned. They also note increased awareness of the value proposition and current state of the organization.
The benefits of a COE continue to grow as you become more agile and improve your processes over time. Successful COE’s are focused on and accountable for helping organization’s achieve their goals.
Regardless of its structure and resources, there are external elements that can pose challenges to your COE. The most obvious, perhaps, is change management. Driving change in an organization can be quite difficult for a number of reasons; two of the biggest ones are emotional and psychological:
- Status quo bias – people generally prefer to keep things the same because the status quo is less intimidating than the unknown
- Loss aversion – there is a tendency to prefer avoiding losses more strongly than acquiring gains
Having clearly defined objectives, goals that seem attainable, and supporting metrics help fight against the resistance to change. The more detail around the future state that you can provide, the better. People want to be able to envision the change before it happens so they are more comfortable buying in.
Another challenge is getting the right people. There is a limited ecosystem of Pega resources that can get you off the ground, so you’ll need to select an internal group of people who have the desire and ability to do the work. As we’ve said before, it’s critical to find team members who are open to and will promote change in the organization.
One of the biggest challenges COEs face is finding adequate, consistent funding. The cost of a COE is high and can quickly grow as you scale and acquire additional resources. An executive sponsor is extremely valuable when you’re looking for funding from top management and is vital to any COE’s success. The COE needs a champion from the executive tier who understands the COE’s purpose and value within the organization. He or she will socialize and advocate for the COE as the delivery team for business process management across the enterprise.
COE Benchmark Results (Part 5)
In 2014, Pega conducted a Benchmarking Survey of the COE community. Here Paul Roeck and Kate Lepore discuss the results related to the most common challenges facing COEs and the keys to success.
Most COEs we see are funded through a chargeback model, while others are mature enough to have a line item in the annual budget. Each COE will have a unique funding arrangement, but here is an example of one that matures over time.
- At the start, the COE is funded solely by the CIO office.
- As it grows, fixed costs continue to be covered by the CIO, but variable costs are cross billed. The COE is in effect charging individual business units for their projects. The variable costs are recognition of the benefits gained through the use of the COE, also considered a COE “tax” in exchange for resources (assets, guidance, reviews, and shared infrastructure).
- The organization over time demonstrates the ability to successfully and repeatedly deliver individual projects; as this happens the need for a point-to-point funding model diminishes, and a single consolidated funding model emerges. Projects without funding can propose a business case and apply for funds.