In many of my recent technology-driven transformation projects, the design and implementation of a technology Center of Excellence (CoE) has been considered as a solution to ensure clear ownership of expertise. However, in some cases, the implementation of the Center of Excellence was sub-optimal, resulting in a group that struggled to deliver on its full mission. The reason is that the needed expertise goes beyond technology, and this is often not considered in the design or in the implementation phases.
Accenture has found that over 65 percent of senior executives say that they are struggling to realize the expected benefits of cloud transformation. The complexity of the required organizational transformation as well as the lack of specialized skills and new behaviors are cited as the leading causes for lack of performance.1 CoEs are often created to address a lack of cloud skills and capabilities, through development of new approaches and tools, pooling of key resources, and prioritization of resource allocation across different cloud projects. The CoE is then expected to drive common practices and ways of working across the organization.
But for an effective CoE the design and implementation must answer these questions as well: “Who will be accountable for the new capabilities that the transformation aims at building? How will we ensure that employees are enabled to leverage an ever-evolving system? What connections are needed to make sure that new processes are used to solve relevant business problems? What operating model do we need for this new ecosystem?”
To answer these questions, focus both on clarity of design and pace of implementation.
First, ensure clarity in the initial strategic intent for the design. For example, in a large bank, the cloud transformation was intended to build a client-centric, omnichannel distribution organization. At a pharmacy retailer, the intent was to expand the service offering to include health services, while reinventing the client relationship. At another financial services institution, the intent was to build common practices, tools, and data governance for advanced analytics. Each of these sets of capabilities requires a different organizational solution, even though some of the underlying technologies will are quite similar.
Clarifying the capabilities that the cloud transformation is to deliver helps to contextualize the design of the CoE. And it allows for a plan that reflects the reality of implementation. For example, in the case of the client-centric, omnichannel distribution bank, success required sales and product teams to collaborate more seamlessly to the benefit of the client. Because of that clear ambition, design of the CoE went well beyond focusing on solution development and training services. In addition, the design established a governance mechanism to help drive collaboration between the new partners by including a monthly forum where tensions between the roles were addressed. That governance mechanism was linked to a learning mechanism so that lessons learned in the first phases of the development were capitalized upon and transferred during subsequent phases.
In this way, strategic clarity led to a clear set of technology and non-technology capabilities that could be executed together to deliver on the expectations of the cloud CoE.
Second, recognize that implementation may move at different speeds for the technology and non-technology capabilities in the CoE. IT teams, partnering with a cloud vendor providing industry best practices, are often able to quickly move forward with objectives largely in their control, such as modern engineering and product management. Business, operations, and HR leaders may be focused on longer term, complex roadmaps for non-technology changes, such as agile and DevSecOps teams development, digital talent, and program and project governance that require deep connections across business.
As a result, the service catalog can end up ahead of the ability of the CoE to execute. Business leaders may become frustrated when members of the cloud CoE focus on technology solution design, development, and deployment, with business teams being left to figure out the best way to leverage the new assets, ways of working and the new tools they are provided with.
One way to solve this is to ensure business and function leaders are active members of the project governance. Steering committee overview of business case helps clarify drivers of business value. This not only helps manage the pace of implementation but ensures executive buy-in. For instance, creating a process of prioritization based on business value in the case of common practices, tools, and data governance for advanced analytics, allows for multi-speed projects. In the end, better project governance helps adapt the pace of the program to business priorities and facilitate investment in required resources.
1 Source: 2019 Accenture Expectation vs Reality Global Survey of 200 senior IT executives across 200 companies having revenues in excess of $1 billion annually