Centers of Excellence: Strategies, Types, and Best Practices

A Center of Excellence (CoE) is a team of skilled knowledge workers who work with the mission to provide the best practices around a particular area of interest within an organization. It can be understood as an entity creating special interest groups for thought leadership on a particular focus area.

Center of Excellence’s (CoE) purpose is to focus on finding and sharing best practices with other departments, rather than performing operational tasks. The process enables the Digital Center of Excellence to help other departments improve their performance and efficiency.

A Center of Excellence should also be distinct from a business department or center.

Types of Centers of Excellence

Center of Excellence (CoE)s can be classified into four major types as mentioned below.

Best Practice Centers

This type of digital CoE aims to disseminate data and foster collaboration. The nucleus of a best practice CoE often begins with idea evangelists that coalesce to mature and push innovative strategies into an organization.

For example, a recently formed best practice center can help provide mature ideas around test-driven development within an organization. So, the simple measures of success for the organization include reduced cycle time and improved product quality.

DevOps Centers

This type of CoE delivers a specific service to the organization. Consolidation of the service increases consistency when converted into a shared service and provides a platform for improved governance. DevOps centers generate demand through governance, pushing services by controlling who can perform them over time.

They can also act as a highly structured training ground when included as a step in a job rotation program. Simple measures of success for this type of CoE include utilization metrics regarding the number of shared services used versus the ones that remain unused.

Competency Centers

This CoE adopts and refines processes and frameworks that can be leveraged across organizations. Salesforce uses the term “guide” to describe competency centers. They generate demand for their services by consulting and selling ideas.

As this type of CoE evolves, it generally becomes a mixture between a think tank and a process laboratory, which can lead to the next level.

Simple measures of success for this CoE include framework and process adoptions and other internal consulting requests.

Digital Innovation Centers

Change is perceived to be a constant process in most organizations. Innovation CoEs develop or mine the industry for new and innovative approaches to continuously modernize products and improve the cash cycle team concept.

Simple measures of success for this type of CoE include the number of experiments performed and ideas inculcated into other portions of the organization.

How to Create a Center of Excellence

Organizations must have clear components including an overall vision and strategies that fall in line with it to host successful technology centers of excellence.

The steps to rolling out the CoE include the identification of team members, scheduling regular meetings, setting goals and timelines, and creating a resource hub for sharing helpful resources.

Here is a breakdown of the steps to create and implement a Center of Excellence (CoE) within an organization.

• Define Vision and Strategy for the Digital CoE

This stage involves conducting assessments to conceptualize the Center of Excellence (CoE) and establish its feasibility.

If the scope is broad, the CoE will have difficulty making an impact. On the other hand, if the scope is narrow enough, the CoE may find it easier to justify its existence. So, it should be focused enough to make a real impact on the organizational functionalities.

It is important to appoint an interdisciplinary committee that will be responsible for envisioning the center to develop a clear vision and strategy for the CoE. This team will assess the availability of requirements, such as financial resources, leadership support, and organizational culture.

Furthermore, they will also craft a working mission and vision statement. Finally, the team will conduct a study to assess the need for a CoE, determine the services it will offer, and ascertain its financial viability.

• Describe the CoE’s Function and Role Categories

A Center of Excellence (CoE) works efficiently with a responsible and reliable team. If an organization has a team full of experts in their field who need to be more organized and work well together, the CoE will struggle to succeed.

On the other hand, if a team of average performers exists in the organization who are extremely well-organized and work well together, the CoE is more likely to be successful.

Therefore, building a team structure that allows individual and collective success is important for CoE implementation processes. The most convenient way to do this is to create teams with a mix of experts and generalists.

The experts can provide deep knowledge in their respective areas, while the generalists can help connect the dots between them and ensure everyone is on the same page.

• Assemble a Strong Digital CoE Team with the Right Attitude

The key to success is having a team that is excited about innovation and willing to take risks. Innovation is impossible without risk and an organization cannot have a team that is willing to take risks without instilling confidence in them.

Technology can be learned by anyone, but it is the natural risk-takers that will be the true game-changers for a particular company. This requires the ability to take risks and subsequently share and learn from mistakes.

Team members, especially within a digital centre of excellence, can work more vigilantly to improve processes and deliver better results by learning from failures.

Fast failure can lead to continuous improvement and a more successful team. It further helps bring integrity and energy to the team, with a sense of ownership in joint successes.

• Complete and Commercialize the Center of Excellence (CoE)

This is the last step in creating the CoE. Once the design and development plan is submitted and approved, the CoE moves from the blueprint stage to construction and the final launch. Later, it falls under the greater organization’s strategic management framework, which includes standard planning, implementing, and evaluating processes and activities.

All these elements enable the CoE to operate proficiently and achieve its goals of driving excellence within a company.