The concept of an SAP Center of Excellence (CoE) has been around for a long time. Over the years, there has been no shortage of definitions of what a CoE is and what role it should play. This confusion is due, in part, to the fact that the role of SAP has changed inside most organizations. The changes in the SAP footprint and its purpose have prompted some lively discussions about what a CoE should look like now and in the future.
For some organizations, a CoE is merely the center of support for a company’s SAP users, whether that’s day-to-day trouble-ticket support or supporting training, maintenance, and upgrades to the system. While these functions are important and worthy of attention, they’re increasingly less central to the ultimate goal of an SAP CoE. Just keeping the lights on for SAP software is a sure way to sub-optimize what should be an increasingly valuable and strategic asset.
Redefining the CoE: A Job Posting Tells It All
A recent job posting for a director-level SAP CoE position at a major pharmaceutical manufacturer tells a much different story—and it takes 1,100 words and over two pages to do so. Highlights include:
- Design and implement business processes for SAP and “supporting systems.”
- Ensure data consistency based on Master Data Governance policies.
- Work with business partners to ensure business functions are prioritized and supported and process integration is “best in class.”
- Lead business analysts and other project team members “in the delivery of critical projects, which require end-to-end process and technical expertise.” (My personal favorite.)
- Lead career development and success management, and mentor professional and technical development.
These highlights are in addition to the usual project management and execution, business analytics and reporting, QA, training, and ITIL functions typically associated with a “traditional” CoE.
Do CoE Right
My read of this job description—and the hefty salary range that goes with it—is that this posting comes from a company that knows how to do an SAP CoE the right way. That starts with an explicit acknowledgment that its SAP systems, and non-SAP systems, are truly critical to this company’s business success, not just the successful use of its SAP software.
The posting also highlights the need for continuous engagement with the lines of business about increasing the role of SAP in business success, especially in landscapes that include non-SAP applications and data formats. The job description also acknowledges that evolving the use of SAP to meet business needs requires an evolution of the company’s talent pool.
These are all crucial differences between “classic” CoEs and the concepts behind a modern CoE. Being merely successful at using the SAP system as installed is a worthy goal in and of itself, but a CoE that does only that operates counter to the concept of a modern enterprise and its relationship to technology.
Technology as Force for Change
That technology-business relationship has become hypercritical in a global economy in continual flux, battered by an utterly overwhelming crush of geopolitical and political crises, supply chain perturbations, personnel issues, changing business models, and the like. More and more companies are looking for creative, cost-effective ways to navigate this complexity. That requires using technology as a dynamic force for change, not just a static resource only used as initially implemented many years and global crises ago.
It's important to add that technology in general—and the growing SAP portfolio in particular—is as dynamic and susceptible to changing micro- and macroeconomic factors as the economy as a whole. SAP spent 18% of its 2022 revenue, over $5 billion, on R&D, independent of its product engineering teams’ efforts to bring new software and services to market. Those two efforts combined represent a lot of change for customers to potentially understand and, hopefully, put to good use.
Modern CoE Value
This is the real value of a modern SAP CoE: Help a customer leverage a continually evolving software portfolio in a global economy that is continually changing. As such, a CoE provides a home for the collection, curation, and distribution of a company’s tribal knowledge about how its business uses SAP. It also should provide a virtual—if not in-person—center for a company’s business and SAP experts to come together and carve out technological solutions to the never-ending challenges that companies of all sizes, industries, and geographies face.
Imagine if you had a life insurance policy that paid you a premium every month and helped you lead a more productive and healthy life along the way. That’s what a modern CoE can do. Your organization can certainly forge ahead without one. But that’s a perilous journey worth avoiding, especially as the alternative offers such an important payback in so many ways.
The past, present, and future of CoEs will surely be up for discussion at the ASUG Best Practices: Center of Excellence (CoE) and Enterprise Architect (EA) Conference. To learn more, visit https://www.asug.com/events/asug-best-practices-coe-and-ea.
Joshua Greenbaum is the Principal of Enterprise Applications Consulting.