Typical business process management (BPM) projects span an organization’s people, departments, and systems, and planning strategies for success and managing change is critical. Learning from past BPM initiatives helps a new BPM project deliver on expectations—especially when that knowledge is encapsulated in a Center of Excellence (CoE). A CoE is an organizational structure that promotes collaboration and propagates best practices to deliver on business results. Ultimately, it is responsible for answering the questions that justify BPM: What impact has BPM had on the enterprise? How do you quantify that impact? Did the BPM implementation deliver on the organization’s expectations and goals? Organizations that have an established CoE have a much greater chance for a successful BPM implementation.
Creating a CoE
A CoE consists of core team members from across the organization, including business and information technology (IT) leaders, who provide leadership, consulting, and advisory and support services that enable the enterprise to succeed in implementing cost-optimized solutions across the organization. The primary objectives of a CoE are to:
- Deliver strategic business value through technical and process excellence. Doing so involves prioritization of projects at the enterprise level based on business needs, setting milestones at the individual department level, providing executive-level sponsorship for each project, providing guidance on budget and resource estimation, and being accountable for the success of the implementation across the enterprise.
- Provide a coordinated approach toward program and change management, the migration process, project methodology, and adoption and standardization of the technology used in the enterprise.
- Be an enabler for achieving high-quality development, productivity, and excellence.
- Establish architectural guidelines, policies, and best practices and to ensure successful adoption. Partners and vendors participating in the solution should conform to and comply with these standards and policies.
- Ensure that reusable assets are identified and leveraged. The CoE provides knowledge sharing and seamless communication among teams As well as improving economies of scale.
- Provide overall guidance and support for enterprise-wide deployment of the BPM project. The CoE serves as an encyclopedia of past success and failure; it provides expertise on demand as well as functioning as an advisory committee.
- Be accountable for a successful BPM project.
Why is a CoE necessary?
Organizations adopt BPM with the expectation of identifying core business processes as assets for management and optimization. The goal of the BPM implementation is to improve organizational efficiency and effectiveness by optimizing these core business processes. For the first few business processes that are at the departmental level, this promise is often made a reality, and organizations identify benefits and begin to see returns on their BPM implementation after a few months.
However, the reality of BPM often does not match the expectation when it is extended beyond individual departments—interdepartmentally, spanning multiple people and systems within and outside the organization. When BPM projects fail, it typically because of a lack of:
- Management buy-in across the enterprise.
- IT buy-in across groups.
- Project, budget, and resource prioritization across departments.
- Motivation, communication, and clear leadership across groups.
- Communication at the technology level, with no clear definition of interfaces between legacy systems and resources.
As a result, BPM projects are often not initiated because of these early roadblocks or, when they do start, they never make it to completion. Those projects that do make it to completion may not meet expectations in terms of performance or budget estimates. In addition, there is no clear visibility or establishment of standards and best practices, and no single body is accountable for their enforcement. If no one is held accountable for the success of a BPM implementation, that project will fail, resulting in dashed expectations, lost time, squandered resources and budget, and lowering of employee morale. The organization may be left in a worse position than where it was prior to the BPM project.
Without a central repository of knowledge, organizational units that were not part of the initial decision-making process may adopt suboptimal use of the technology that was acquired. These groups will lack the overall perspective and understanding of why a certain decision was made, often being left to spin their wheels over the same decisions and reinvent the wheel.
When are you ready for a CoE?
An organization is ready for a CoE when it begins its first BPM project—even at the departmental level. Often, lessons learned on a smaller scale will still be relevant when expanded to a larger scale, and the experience gained from every implementation is precious knowledge that needs to be maintained and disseminated.
The challenge is that at the small-scale intradepartmental level, a CoE does not bring as much value, and the benefits of establishing it and the lessons learned are not realized until the business processes are expanded to the interdepartmental level. As a result, creation of a CoE is typically undertaken when the organization begins to feel the lack of such a repository—typically at one of the following stages:
- The business processes are scaled to cross boundaries within the organization, especially at a time of mergers and acquisitions.
- The scale of the business process is large in terms of the number of systems and people it touches within the organization.
- Larger-scale business processes that span departments are automated.
- A larger number of business processes are automated—often parallel implementations happening simultaneously.
Building a CoE
When building a CoE, the organization must decide on the CoE’s membership, its structure, and who will manage its IT components and knowledge.
The CoE should be a committee that is neutral and business-oriented—one that sets priorities, settles conflicts, and establishes best practices. It should consist of a range of people: visionary line-of-business (LOB) managers, IT leaders, and BPM program managers who work on day-to-day operations of the project. The organization’s Chief Information Officer (CIO) and executive heads of the affected business areas involved should also be there. Every department in the organization should be represented.
The CoE should come together to form a steering committee consisting of the relevant people in the group for every business process project. Each steering committee should have an executive sponsor as well as one point person who will be held accountable for the success of the project (other than decision-makers whose business units will be directly involved or affected by the upcoming business process).
The role of the steering committee is to know the details of the project at hand and assist in overseeing activities of the project on behalf of the CoE. The steering committee will be held accountable for the success of the project. Specific tasks include:
- Maintaining an IT strategic plan for the project that is aligned with the business goals.
- Serving as project champion; coordinating priorities and flagging issues at the global level.
- Maintaining continuous contact with the project and assuming accountability for its success.
- Approving vendors and enforcing best practices and standards at the project level.
- Approving budgets, priorities, standards, and procedures at the project level.
The following roles are critical in the steering committee. (Different organizations may use different names for these roles.)
- IT line manager. This person supervises the resources and activities specific to the IT function of the department. The manager coordinates services within the department and reports to senior IT management on plans, projects, and performance. He or she coordinates daily activities, monitors production and adherence to schedule, and enforces corporate policies and controls.
- Business unit manager. This person aligns with the business goals of the project. The functions of this role include ongoing communication on business needs and strategy within and outside the group, establishing processes, ensuring compliance with policies, project prioritization, funding, and business continuity planning.
- Customer representative. This person brings the user perspective to the project. The responsibility is for bringing subject matter expertise to the project and accurately representing user needs to the project team as well as validating deliverables and communicating with the customer community on the project as it develops.
Other than these three roles, which are hands on and execution related, the team should consist of stakeholders who will be in an advisory role. The team will also have an executive sponsor and will be accountable to the CoE, meeting on an ongoing basis to communicate on the project.
Getting off on the right foot
The first step after selecting the team members is to organize a workshop in which the members can come on board with ideas, discussing the philosophy of a CoE and what it should achieve. The goal of the workshop should be to educate the members on the value of the CoE as well as to get collective buy-in on commitment to the CoE. Working on decision-making and arbitration as part of the CoE will require time, and members need to be made aware of this.
Making it work
As a follow-on to the initial CoE workshop, the CoE will create a pipeline of projects prioritized by business justification. This pipeline will be fed by individual department heads based on internal project prioritization. It will also be fed into by leaders of the organization based on business needs at the interdepartmental level. A threshold should be set for intradepartmental projects entering the global IT pipeline. This threshold could be based on scale—the number of man hours the project requires, the number of external systems and people involved, etc.
The following parameters must be established for every project entering the pipeline. The prioritization of the pipeline will be based on these primary parameters:
- Business justification
- Budget, resource, and time estimate
- ROI/cost of ownership/payback period
- Scalability, reliability, security (this will allow managing expectations)
Project prioritization based on these parameters should map to the organization’s strategic initiatives over the next five years. A closed-loop communication mechanism should exist that informs all parties of which projects are selected, and project plans should be based on these priorities.
Each project in the pipeline should have these additional parameters defined:
- Project management best practices (triple constraints: scope, schedule, and budget)
- Defined rules and expectations
- Project leader/manager who is accountable for the success of the project
- Project developers
- Review points at stage gate exits
- Steering committee
- Executive sponsor
- Risk and jeopardy process defined (communication indicators based on three levels—high, medium, and low—and how project schedule, budget, and resources are affected. The goal should be zero surprises.)
- Closing parameters (Project finish should be defined with a plan in place for follow-through on continuous improvement. This plan will involve proactive monitoring, recording enhancements, determining root cause, and implementing corrective actions.)
In addition to the annual prioritized plan, new needs will constantly arise within the organization. These new requirements will have to be evaluated on an ongoing basis and will alter the pipeline. A weekly cycle within each department on any new requirements should feed the CoE, which should then meet to evaluate pipeline reprioritization. Any alteration to an existing project that is in development should be carefully considered for repercussions. Management by committee, with all hands on board through the CoE model and continuous communication, will ensure that there are no surprises and provide the optimal plan for proceeding.
Organizational change management
One of the challenges with BPM is that it can affect organizational structure. Automation of business processes, for example, may require loss of personnel, which can cause turmoil in the minds of people involved in the project. Another issue could be challenges around adoption of the change, especially in an environment where a different way of order has been the norm for several years. Conflict resolution is a third area that could pose challenges, as parallel roles in different departments get involved over their individual priorities and personnel. All through the process, a feeling of inclusiveness through continuous communication and goal setting at all levels will help with the success of the project. The CoE will enable this. Members of the CoE should feel empowered to act during change. Continued training on managing change and conflict resolution—allowing them to draw from previous experiences—are ways to enable success.
BPM has the power to turn organizations around by rewiring the core business processes for efficiency and optimization. However, when BPM needs to scale to meet the demands of the business, it can fail, leaving behind a trail of unmet expectations, wasted resources, and squandered budget. A CoE can serve as a governing body that has the power to turn things around.