Business Units = Value Generation, Support Function = Process Excellence
Many of today’s businesses are functioning in more than one dimension, from providing range of services to producing / handling different product lines. In any such enterprise, there are different elements contributing to the success of whole organization. While the BU heads are responsible for generating value out of the business lines they are handling, the process owners on the other hand have to pursue process excellence across the concern to support smooth business operations.
Information Technology Division: One Organizational Unit for two types of Functions
The IT Division has to support both – the Business Units as well as the Business Processes. To provide the required support, IT departments require tools (from technical solutions and platform to an organization) capable of handling complex businesses. While SAP, being a top-notch enterprise software, provides businesses with comprehensive list of solutions by lines of business (Finance and HR for instance) and industry (Airlines & Technology for example) in addition to providing central solution lifecycle management platform (Solution Manager), it also guides its customers in establishing COE to maintain their technology investments and to optimize their business processes for better ROI.
Center of Excellence as a Solution & Services Provider
The CoE, which typically is an application unit within an IT organization, is seen by business as a sole solution provider – being a solution integrator and a custodian of major business processes. Now how best it serves the business depends on the organizational model it has in place to support the productive systems, enhance existing solutions and to manage the complete solution portfolio. To be able to support business with its needs, the CoE needs to have expertise in specific 1) industry solutions used by individual business units and 2) domains to support relevant processes, in addition to process integration, technology and development related skills. These skills could be best used if managed appropriately which requires 1) splitting various functions of a COE into day-to-day support from projects, and 2) engaging the team in right activities at right time.
CoE: From general support to innovation
By providing regular support, from resolving issues & fixing root-causes of problems to administering change requests & new business requirements, the CoE ensures the technology (individual applications) remains a solution to business needs. In addition, it guides its internal customers (the business units) with functionalities through which processes could be further optimized (including new-dimension products, upgrading / migrating to advanced solution offerings) to support business in running better. It works in parallel with other IT functions to make sure Business Units as well as Support Functions are given the support they need to generate value and bring process excellence.
An Example: Business Unit to Support Function to Center of Excellence = Contributing to Value Generation and Process Excellence
As an example, let’s assume there are 4 business units of an organization and also 4 support functions. The business units are concerned with the value they generate, while the support functions need to run efficient across the organization regardless of the financial situation of each SBU. While the IT division is supporting both types of hierarchies, it’s application unit (the SAP CoE) provides specific applications to support individual functions, such as HCM solutions for HR business function.
Now for instance, one of the business unit is executing a project to support its business and it needs temporary workforce for the undertaking. Apparently its contact point for HR needs would be HR support function. The HR is using SAP Solution. It could navigate through its talent pool to find out suitable candidates and suggest to the respective business unit. However, let’s say the selection criteria given by the BU is very complex and the standard report doesn’t produce the desired outcome. Now in such case whom should HR look at? The technical solution provider, of course, which in our scenario is the SAP CoE. The CoE, for having in-house technical capabilities, builds a new query providing all the parameters thus at one side supporting HR in completing its job and at other side providing support to the business unit.
Obviously the maintenance / support requests by business units and support functions are addressed by CoE through some system, the above example is given to illustrate how a SAP CoE is continuously supporting businesses in generating value and bringing process excellence.
I was having some discussion with a colleague of how a CoE operates in an organization and plays a central role in many of its operations. The above explanation describes our discussion in some structured way. I hope it’s clear.
For details on a CCOE moving toward innovation, follow the series on subject by Laura, CCOE – Laying the foundation for a future safe IT (Part 1), being part 1.