Every year around the middle of May several thousand people converge on Orlando, Florida. It is the annual ASUG/SAP SAPPHIRE Conference. Amid the keynote sessions, the education sessions, and the product demonstrations, it becomes clear it is important to be in attendance. Before the conference began, ASUG conducted several one-day workshops for its members. One of these pre-conference sessions – “Delivering Value from Your Center of Excellence (CoE) Today Wh8le Preparing for Your Digital Tomorrow” – focused on topics important to a company thinking about establishing a CoE or one that has had a CoE for 20 years (and anything in between).
As part of the audience, I learned the importance of several things. Let me explain.
The Importance of Networking and User Groups – Andreas Ockzo
Mr. Ockzo, the Deputy Chairman of the German-speaking SAP User Group (DSAG), opened the day highlighting some of the activities undertaken by the group over the past year. At first glance, the connection to a CoE may not be obvious. However, what really began to stand out was the importance of networking among others within the user group and how this can assist in resolving problems faced by a Center of Excellence.
While it may not be completely practical to contact users in Europe or in the German-speaking world – it makes a lot of sense to contact other like-minded users in the Americas. It is likely that someone somewhere has faced the issue you are currently wrestling with. Even if you find your issue is unique, it helps to be able to bounce ideas off others just to gain a different perspective. After all, this is what the ASUG organization is all about. It is important to be involved in ASUG. It is important to be part of the CoE Community within ASUG. It is important to be a member of the SAP Services & Support Special Interest Group (SIG). While some of the specific topics may have seemed a bit arcane, they drove home the importance of networking and being an active
participant in the various user groups.
The Importance of Maturity – Michael Doane
Far too many times the implementation of SAP is viewed as the end of the journey. A close look at many project implementation methodologies depicts “go live” as the end. As a matter of fact, “go live” is really the beginning of the journey. If one takes this perspective the primary ambition in a post-implementation world is to drive solution maturity along with business process improvements to drive process excellence. In a single word, this is ’maturity.’ In an Enterprise Maturity Model, Mr. Doane described 5 levels of maturity (Core Enterprise Implemented, Core Enterprise Stabilized, Excellence Defined, Excellence Managed, and Excellence Evolving). These 5 levels are views through 4 key perspectives. These are:
- Business / IT Dynamic – providing leadership of the efforts led by the business
- Enterprise Applications – to fulfilling / improving the business processes
- End Users – the people executing the processes
- Value Management – measuring the business results
It is important to measure maturity across each of these 4 perspectives.
Mr. Doane made one point regarding the people inside the CoE. He stated the need to abolish the ‘hyphenated’ roles in the organization. The ‘hyphen’ relates to the designation of roles such as FI-CO, MM-PP, SD-MM, etc. Too often there is a differentiation between roles having configuration knowledge (System Analysts) and roles possessing business process knowledge (Business Analysts). In order to be most effective – and to drive overall maturity – the objective from the very beginning should be to combine these capabilities into a single Business Process Expert role. Combining these skills sets into a single role begins to blur the lines between IT and business. They become one and the same.
The Importance of Executive Alignment – Luis-Pedro Recinos and Mario Tarrago
CMI Group is a privately-held company based in Guatemala with a variety of business units. As they began their transformation journey they realized it was necessary to look at the post-implementation world differently. Leadership from all of the business units needed to be involved to ensure everyone was properly engaged. This is an important point for executive governance: get everyone involved.
CMI presented their approach on how they got all its leaders engaged and aligned. It started by explaining the view of the post-implementation world to leadership. By their own admission, the explanation did not start well. It became evident there was a wide view of perspectives. Gradually, the conversations began and the alignment between the executives began to take place. It was important to have these discussions and to have the questions be asked (and answered).
CMI made clear what the CoE was expected to be. The CoE would:
- Act as a business process improvement network
- Manage organizational change
- Measure continuous process improvement
- Encourage best practice adoption
- Develop long-term implementation roadmaps
CMI also defined what the CoE was NOT, which is just as important as what the CE is. For them, the CoE was NOT:
- An application support model
- A shared services project
- An IT project
It was critical for CMI to change the mindset of the entire organization to view the CoE as a strategic partner by changing from an IT perspective to a business perspective. Executive education in this area becomes extremely important, beneficial, and powerful. The launching of a successful Center of Excellence takes time, patience, and enthusiastic executive agreement.
The Importance of Figuring Out Who You Are – Jose Gonzales
Tesoro Corporation had been on SAP for many years but determined moving to a ‘green field’ HANA environment was the best way to achieve a business, technology, and organizational transformation. From an organization point of view, the CoE was the preferred route. Yet, this time around there was an opportunity to get everybody on the same page at the very beginning.
Tesoro started their journey by understanding the business objectives of the entire company (not just for the HANA implementation). Next, the leadership determined how their activities, their organization, and their processes were going to help achieve these business objectives. It was important for them to figure out who they were and what they needed to accomplish before they set off on their CoE journey.
Once the vision of the CoE had been defined, the operating model was the next step. The operating model identified the relationships between the various groups both within IT and the business customer. The operating model helped highlight areas needing improvement from the current model. In addition, the services necessary to accomplish the vision were also reviewed in detail to ensure these were going to be in line with what the organization needed to achieve. As with the operating model, some items came to light that needed to be changed in the new organization.
Once these items had been determined, Tesoro had the details needed to move forward with the transformation of their Center of Excellence. It was important for them to determine who they were and who they needed to be before setting out on their journey.
The Importance of Company Culture – Doug Shuptar
Three common question asked by customers beginning a CoE are: “How many people do I need?” “What skills do these people need?” “What should the organization structure look like?” Mr. Shuptar stated these are valid questions but not necessarily the FIRST valid questions to be answered. The first question should be, “What is the mission / vision for the CoE?” Three follow-up questions are: “What services need to be offered to achieve the vision?” “How do the services need to be delivered?” “How should the services be governed?” Once these questions are answered, many of the organizational questions will sort themselves out.
As for the organization structure, just like snowflakes, no two companies are alike. As a result, the organization that fits best will be unique to that company. Bits and pieces may be applicable to customers but one cannot (should not) simply copy one structure into another without considering the company culture. It WILL make a difference.
What happens if the CoE desires to be broader than SAP? Mr. Shuptar made the point the CoE is often considered as an operating model in these circumstances. The operating model defines the relationships and the interactions between the various roles and groups. In this case, the relationships with the business customer become even more important but so does the governance structure used to govern processes and priorities. It is the various layers of governance that hold the operating model together.
However, just like the CoE focused on SAP, it is important for an enterprise-wide CoE should have an organization structure that works within the culture of the organization it serves.
The Importance of Keeping Score – Masahito Ninagawa
Loblaw Companies of Canada knew they needed CoE from the very beginning. However, they decided early on they were going to use CoE certification efforts to drive business benefits wherever possible. A key part of this effort was using available tools to keep score and to keep track of their progress along their CoE journey.
One of the things they came to recognize was SAP knew more about the tools than they did. Although it took a while, they finally listened to SAP and used the tools in the proper fashion and for the proper things. Loblaw used the Innovation Control Center (ICC), the Operation Control Center (OCC), and Solution Manager to drive improvements in their operations. As a result, total cost of ownership for SAP dropped by 30%!
In some areas, Loblaw measured the skills / capabilities necessary to run / support where the business was going. There were able to identify the skills that were lacking and build a staffing plan to increase the skills / capabilities of its resources. From these two items, they built personalized training for each CoE role. As the staff saw the investment being made in their knowledge base and caught a glimpse of the future, the enthusiasm grew. As a result, Loblaw experienced a phenomenal retention for their CoE resources.
For Loblaw, the OCC became the driver for ‘cheaper, better, faster’ in their IT operations area. The ICC drove increased use of standard functionality resulting in less custom code. Amazingly, when the CoE / ICC / OCC were working together, the number of incidents decreased by 30% in a short three-week time span.
The Importance of Value – Danelle Brady
Historically speaking, 65% of the overall IT costs are tied up in people costs. When looking for TCO improvement areas, this is the place to look. Value can always be found in process improvements within the IT area. It is simply a matter of looking in the right places.
Ms. Brady highlighted some of the areas where customers should look to increase the overall value of the IT services and the organization. Areas such as:
- Removing historic garbage
- Focusing on tasks according to their value to the business
- Setting up operations, projects, and reporting based on KPIS and benchmarks
- Moving IT closer to the business users
In summary, three important ways to generate value from IT for the enterprise is to:
- Become agile and innovative
- Build KPIs to show the value of IT
- Put the business user at the center of everything you do
The Importance of Preparing for the Transformation – Lourdes Carvajal
Today’s IT organization must get used to operating in the ‘flat-to-down’ environment. This is an environment where costs are expected to be flat or lower than the previous year. How does an organization go about transformation in such an environment? ExxonMobil has had to operate in this environment over the years. They believe it is important for a company to always be preparing for the transformation. To this end, the CoE at ExxonMobil has instituted the characteristics they believe help them thrive in such an environment. These characteristics are:
- Ensure best practices are adopted
- Implement processes to run effectively without disruption
- Conduct cost-effective / modification-free implementations
- Remain knowledgeable of technology trends and SAP roadmaps
Their CoE has developed a number of constants that remain in place regardless of circumstances. Over time some may have evolved but, by and large, they have stayed the same. In spite of organizational changes (and they have had several), these constants are still in place and provide the foundation for their transformation. Based on circumstances, the focal point may be different, but the constants allow the flexibility to achieve what is needed at the moment. In the early stages of their CoE, it was about quality. Later on, transparency and single source of truth was emphasized. In later times, integration was key followed by agility. In recent months, the idea of transformation and the introduction of new technologies has been out front.
Regardless of the theme, the underlying constants and their characteristics have guided ExxonMobil’s CoE to handle whatever is being thrown their way. It is important to develop these same characteristics in your organization to help provide the stability of purpose regardless of what is swirling around.
The Importance of Education – Bernd Welz
The digital transformation is upon us. It is being announced everywhere about the need to be involved in the digital revolution. One can spend countless hours defining what digital transformation means and how it will impact your company. One thing is certain; a real digital education gap exists within customers today. Dr. Welz highlighted key skills necessary for the digital business:
- Business Skills – business model innovations and the incubation of ideas
- Technology Skills – hyper-connectivity, machine learning, cloud computing, in-memory data, and cyber-security
- Application Skills – the digital core (i.e. S/4 HANA), employee engagement, supplier collaboration, customer experience, internet of things
- Analytics Skills – data sciences
Digital education needs to begin with the development of technical savviness in each individual. Rather than waiting until technology is deployed (or just prior) to get trained, it is more important to have each individual continuously up-skill in the digital area through proactive investment in the skills and continuously analyzing the learning needs. The emphasis at this point is to make the learning easier to consume for the individual. At the same time, the goal is to make the learning journey as personalized as possible. Dr. Welz believes this is one of the ways the digital education gap will be reduced over the next several years.
Hopefully you can see the ASUG CoE Pre-Conference session was full of important information each attendee was able to take away from the day. It was important for people to be there. But, this is not the end. It is only the beginning. There are several more CoE days scheduled through the summer in several cities across the United States and Canada (Toronto, Chicago, San Antonio, Houston, Seattle, Palo Alto, and Newtown Square). Please check the ASUG website for specific dates and locations. Better, yet become part of the CoE community and get involved in the sharing of knowledge.
If any of the topics from the sessions above hit home and you’d like to discuss them further, please contact me at email@example.com to get additional information or to continue the conversation on how to improve your Center of Excellence. It’s important.