ARTICLE

Center of Excellence (CoE): Source of Value Creation

Most Read
Organisation
Technology
Digitization
Education
Center of Excellence (CoE): Source of Value CreationCenter of Excellence (CoE): Source of Value Creation

A Center of Excellence is not an invention of the automation industry, but it is an important building block. Anyone who reads up on process automation these days cannot avoid one term: the Center of Excellence (CoE). Everyone sings the high song of the CoE as the savior of successful, scalable process automation. So it's no wonder that the Center of Excellence is becoming increasingly popular among automation-savvy companies, and more and more organizations are working on building a CoE. Gartner predicts that by 2022, 50 percent of companies with more than three AI projects will have a CoE. One could get the impression that the Center of Excellence is an invention of the automation industry, specifically to help Robotic Process Automation (RPA) get on its horse sustainably and on a grand scale.

Center of Excellence (CoE)

Center of Excellence

Centers of Excellence are not new. Already in the last decades, CoEs - often also referred to as Knowledge Centers - have been used for various purposes to share accumulated knowledge in different fields such as pharmaceuticals, automotive, telecommunications or in areas such as innovation, technological improvements and R&D. So even before RPA and the automation hype, centers of excellence were used to handle specific complex business tasks efficiently and effectively. CoEs are made up of individuals with specialized expertise in specific areas of expertise such as marketing, finance, HR, R&D, and IT, or with particular expertise in areas such as business process management, customer relationship management, or quality assurance, who work together to develop and promote best practices for specific areas. CoEs are stand-alone units designed to provide expert guidance to the rest or to deliver specific business services. CEOs who invest money and time in a Center of Excellence are sending a clear message that they want to drive a strategically relevant issue. This is more relevant than ever in 2021, when you consider the huge and often criminally neglected potential of process automation.

Essential for scalable automation implementation

Providers and consulting firms quickly recognized the opportunities and value of a center of excellence for the sustainable establishment of process automation solutions and adopted them for themselves. After all, the complexity of RPA and the like only becomes apparent when several bots have already been implemented and those responsible notice that their operation is not running smoothly and cannot be scaled. In the context of process automation, a Center of Excellence today therefore takes on the task of implementing and testing initial RPA solutions as if in a test lab, developing standards for the development and implementation of automation solutions, implementing the company-wide rollout of RPA and Co. and also scaling sophisticated projects and leading them to sustainable success. The Center of Excellence is, so to speak, the contact partner for "best services" throughout the company when it comes to holistic and effective automation.

Center of Excellence as enabler of intelligent automation

This is all the more important because this technology will continue to develop dynamically in the direction of Intelligent Automation. An established Center of Excellence simplifies the further development and implementation of automation technologies, such as Robotic Process Automation or automation with a so-called Integrated Platform as a Service (iPaaS), and accelerates the provision of advanced, AI-driven technologies and continuously increases the level of automation. CoEs manage the entire automation lifecycle from a central location - from process identification and evaluation of suitable processes for automation, to the development of standardized processes for implementation and maintenance, to the management of an automation ecosystem with a large bot landscape.

Centralized, Decentralized or Hybrid Center of Excellence?

CoE: Centralized, decentralized or hybrid?

It is not possible to make a general statement about the best location for a Center of Excellence. The form in which a Center of Excellence is embedded in an organization also depends mostly on the organization of the company and the goals it is pursuing with a Center of Excellence. Strongly centralized organizations will rely on a centralized Center of Excellence to achieve the greatest benefit and impact, while regionally distributed, decentralized organizations will also prefer a decentralized CoE.  

Decentralized CoE

A decentralized Center of Excellence is characterized by its proximity to individual business units. This is why there will generally be several CoEs. Since process knowledge is particularly pronounced here, rapid success can be achieved in this constellation. The close intermeshing simplifies the transfer of knowledge and enables a high level of actionability and flexibility. A decentralized Center of Excellence is ideal if there are unique requirements in the departments. However, the decentralized structure goes hand in hand with fewer central control options and makes it difficult to achieve cross-company transparency and the scalability of RPA across different business units. In addition, a decentralized center of excellence can lead to complex automation silos with inevitable duplication of effort and higher costs.

Centralized CoE

Central CoEs are usually attached to IT or act as shared service centers. All automation projects are bundled in a central location, which increases transparency, enables central governance and facilitates the scalability of RPA across the various business units. Setting up a central CoE does require more effort in planning and requires more internal coordination. However, centralized location simplifies the operation and maintenance of automation solutions and the standardization of automation processes, and reduces costs. However, the success of a centralized CoE stands and falls, among other things, on maintaining contact and good internal communication with the business units as internal customers.

Hybrid CoE

Hybrid CoEs offer the best of both worlds. For example, a larger CoE acts as a central hub that controls decentralized CoEs docked to the business side. Despite centralized control, this approach offers room for individual solutions and is suitable for organizations that have individual business units with particularly high automation potential.

Make or Buy?

Not only the question of locating a CoE in their organization drives many people when it comes to setting up a Center of Excellence, but also the general question of setting up a CoE themselves or purchasing it as a specialized service from an external provider. The idea of leaving the establishment and operation of a CoE to an external provider stems from the notion of being able to centralize the set-up at reduced cost, since standardizing the work for many customers usually means that the market price is lower than the internal personnel and operating costs.

While understanding the economic motivations, it is important not to overlook the fact that an external provider will not share the vision of a business model, nor will it understand the organizational and strategic nuances of the company and, faced with hundreds of different customers, will not be able to adapt its service to the business-specific requirements of a single customer. The identification and loyalty that an in-house CoE inherently brings to the table argues against outsourcing a CoE, as does greater transparency. In addition, the automation results and insights gained are based on a deeper understanding of business processes and business data, enabling optimized delivery. The direct, delay-free communication between the CoE and the business units as clients of an automation solution facilitates problem solving and is not influenced by the fear of upsetting the customer in the long term in the event of possibly unpleasant information and results, with the consequence of losing the customer.

Center of Excellences cost money

A CoE requires financial resources for the necessary technical resources, operations and the salaries of qualified employees to guarantee smooth operations. To put it in a simple formula: CoEs are supposed to continuously change processes and workflows through automation from the point of view of effectiveness and efficiency. But change costs money. Economically poorly designed CoEs can end up costing more money than they benefit. The question of a solid financing structure for the CoE is therefore of central importance. For management, this means deciding whether to run the CoE as a cost or profit center. In doing so, it must always keep in mind that in many cases a CoE increases costs in favor of using knowledge and experience to reduce overall costs.

Cost Center

In a cost center, a CoE is given a budget that is to be used as sensibly as possible to fulfill its task or certain services. This means that automation projects that appear to make sense are implemented regardless of the costs. In this way, even small projects have a chance of being implemented. However, since working profitably is not at the forefront of the CoE as a cost center, it can sometimes lead to a CoE operating at a loss. To prevent this, the management could decide to make the cost-benefit aspect the sole and decisive criterion for the realization of automation projects.

Profit Center

Managed as a profit center, the CoE must achieve certain sales, productivity and profit targets or maximize performance accordingly. A Center of Excellence is managed as an independent and autonomous unit that has a great deal of freedom, but is measured by results and is ultimately financed through profit. As long as a CoE operates profitably as a profit center, management has created a cost-neutral opportunity for company-wide process automation. However, the freedom also includes the fact that external sales can be generated in addition to internal company sales. However, the high degree of market proximity and the compulsion to make a profit are associated with the risk that the CoE will prioritize external orders over internal projects because of the higher market price that can be achieved, or that it will look for other sources of funding such as training and consulting services for other companies or corporate partnerships.

Existing resources determine the size

The heart of a CoE is the team of experts. The size of the team ultimately depends on the size of the company and the scope and goals of the planned automation. A CoE can consist of a small team of only two or three people, or of more people. It can be set up for just one specialist department or for different departments. The only important thing is that all relevant core competencies needed for a successful RPA rollout and operation are represented. Before implementing a CoE, it is important to consider which competencies and experts are already available in-house and whether they can be inspired for the Center of Excellence. Depending on the resources available, however, roles and responsibilities can also be bundled and assumed by one person, depending on how the company is structured internally.

Building Competences in Automation

Competence can be built up

However, a lack of automation expertise in the workforce is no reason to bury the idea of a CoE again. Automation Academies such as Bots & People offer competent training, education and continuing education to prepare employees for the various roles, to impart broad know-how in the area of process automation and process mining as well as a corresponding digital mindset.

Overall, the three main areas

- RPA Development - responsible for process identification and validation, process documentation and optimization, RPA development,

- RPA Operations & Support - responsible for RPA infrastructure & operations, performance management, technical support,

- Communication & Training - responsible for internal communication, change management & training

should be covered with appropriately qualified personnel.

In order to complete the tasks in a CoE, the Automation Developer, the Automation Strategist, an Automation Architect and the Automation Change Manager work closely together. Ideally, each department also has an Automation Champion who is very familiar with the operational execution of the respective departmental processes in order to identify the processes in his department that can be automated and to make suggestions for process automation. In general, employees look forward to a potential internal career as an Automation Specialist.

The Automation Sponsor

At its best, the Automation Sponsor is a leader who understands the transformative forces of automation technology and has the authority to legitimize and drive the investment of time and money with a compelling value proposition and visionary business case.

The Automation Strategist

The Automation Strategist knows the latest relevant automation and process mining technologies. He wears the hat for all automation projects of the business department and closes the gap between the business department and a Center of Excellence as the executing organization of automation within the company.  

The Automation Developer

The Automation Developer is a trained RPA developer with extensive automation understanding, ranging from RPA development - building software bots - to cloud automation and API development (interface programming). He implements the automation of the processes.

The Automation Architect

The Automation Architect designs the necessary IT infrastructure for the automation projects and keeps an eye on the costs for tools and technologies. This requires a deep understanding of the entire spectrum of IT operations to ensure the availability, efficiency and performance of the IT infrastructure processes and services.

The Automation Change Manager

The Automation Change Manager carries the change initiatives from the CoE to the business departments and helps the business departments with the transformation. Depending on the size of the CoE, the team may also include an RPA Infrastructure Engineer, an RPA Supervisor and/or an RPA Service Supporter.

Observe stumbling blocks

Even if setting up a CoE looks very promising at first glance, don't be fooled by the fact that there are a number of challenges that can cause the CoE project to fail. One very important reason is complexity. After all, a CoE is a combination of people, processes and technology. This starts with process selection, which is often not executed cleanly because employees and staff push to quickly automate processes they don't like, regardless of whether it makes sense or not. Often, managers also focus solely on FTE reduction and completely lose sight of defining clean KPIs for process performance, business benefits and ROI calculations. Starting an RPA project without the backing of appropriate management buy-in, i.e., without a high-level RPA sponsor, will fail because RPA impacts the entire organization. Often the projects are too demanding, too time-consuming and too maintenance-intensive, or there is simply not enough critical mass of projects to be automated to deliver convincing results. Haphazardly rushing ahead without a roadmap often ends in chaos and even greater inefficiency. It is also important to find the right balance in discussions with the IT department. On the one hand, it provides the necessary RPA infrastructure; on the other hand, it can have fatal consequences to deal only with the IT department, since it lacks the detailed understanding of a process at its smallest level (working instructions), including all exceptions.  

Scaling requires high-level support

On the strategic side, the challenge is not the implementation of an automation solution, but its scaling. Synergies must be found and, for example, a successful automation process must also be established in other areas. This requires not only appropriate RPA experts, but also a clear corporate vision supported by a sponsor who drives the initiative forward. To ensure that the project is established as a company-wide strategic priority and that resources are bundled in this regard, the sponsor should occupy a high-ranking position. This is because he or she is a co-sponsor of strategic decisions and the interface to corporate management.

Keeping an eye on tomorrow's technology

Another challenge is that many RPA tools cannot solve more complex, cognitive tasks. This requires not only flexibility from a CoE, but also foresight to look beyond the current technological horizon and extensive automation expertise to ensure a transition to the next generation of RPA. After all, it is functions such as artificial intelligence (AI) and machine learning (ML) that make it possible to automate a variety of complex tasks. From a purely practical perspective, it also requires a professional IT support team to immediately address the potential difficulties that may arise during implementation. Only if the CoE deploys scalable, appropriately sized solutions can it keep pace with future requirements.

Too many processes are also not healthy

In addition to quality, the number of automation processes also determines success and failure. Just as too few process candidates can be automated, too many identified processes can also become a problem. How many automation projects are implemented depends decisively on the available resources. However, assuming the necessary quality and the corresponding automation potential, it is often not possible to automate all the processes in question at once. It is therefore advisable to prioritize the selected processes. Two questions have proven to be very helpful. What is the importance of the problems to be solved by automation within the framework of the business strategy? What benefits can be achieved by automating the process? In this way, a prioritized overview of the processes to be automated is obtained - presented in an easy-to-grasp heat map.

Conclusion

A Center of Excellence is an organizational entity that embodies a set of capabilities explicitly identified by business leaders and managers as an important source of value creation, with the intention that these capabilities are used by and/or passed on to other parts of the organization. It facilitates the work of other business units and contributes to the progress of the entire organization. This also makes a CoE a component to be carefully planned when building a robust RPA or automation program, but there is a lot to consider and think about. Companies implementing RPA or considering it should especially consider how a CoE can take advantage of the ever-expanding scope of intelligent automation products to ensure sustainable and future-proof operations.

Want more?
Dig in!

Top 6 Future Automation Trends and Technologies
Technology

Top 6 Future Automation Trends and Technologies

Digitization
Organisation
AI and Automation: All You Need To Know
Technology

AI and Automation: All You Need To Know

Digitization
Top 7 German Tech Podcasts About Automation, Trends & New Work
Technology

Top 7 German Tech Podcasts About Automation, Trends & New Work

Organisation
Digitization
Automation Mindset - Avoid The Fear Of Automation
Organisation

Automation Mindset - Avoid The Fear Of Automation

Digitization
Education
The Perfect Process Recording: Key to Success 🔑
Organisation

The Perfect Process Recording: Key to Success 🔑

Digitization
Education
A Fully Automated Company: A Future Story
Organisation

A Fully Automated Company: A Future Story

Education
Technology

Check out our
Success Stories

Case Study

Placeholder Text. Do not edit. Slides will get generated based on content from CMS.

Placeholder Text. Do not edit. Slides will get generated based on content from CMS.Placeholder Text. Do not edit. Case Studie Slides will get edited via CMS.Download E-book

Placeholder Text. Do not edit. Case Studie Slides will get edited via CMS.

Placeholder Text. Do not edit. Case Studie Slides will get edited via CMS.
Case Study

Frankfurt Airport (Fraport)

Fraport joined forces with Bots & People and took part in a training at the Automation Academy. The goal was to educate Fraport employees on Process Automation and Artificial Intelligence.

Download E-book

"We got exactly what we wanted. It was strongly practice-oriented and that is exactly what I appreciate so much about Bots & People. For me, that's what sets it apart from other providers."

Sebastian Fay
Project Manager Process Automation in Finance | Internal Control System | FRAPORT AG
Case Study

T-Systems

Automation Pioneer Program: jointly organized by T-Systems International, RWTH Business School and Bots & People. The aim was to train technology consultants and sales staff in the field of process automation in order to build up in-house expertise.

Download E-book

We particularly liked the comprehensive content coverage of the topics and technologies relevant to us as well as the inspiring lecturers in the virtual classroom as well as in the video. Our colleagues were provided with a holistic view of the topic of hyperautomation, giving them the opportunity to discuss their challenges together with the experts and work out possible solutions.

Dominik Ohl
Squad Lead | Learning & Development | T-Systems

DOnt be shy.
Hit us up!

NO MORE BORING
NO MORE BORING
NO MORE BORING