While there are many different paths technology leaders can take toward establishing a Center of Excellence (CoE) for their organizations, the benefits of doing so are clear—especially for those in the midst of digital transformation.
According to ASUG research conducted in collaboration with SAP Signavio in 2023, organizations with CoE teams in place to provide leadership, best practices, research, training, and support for technology modernization are generally further ahead with their SAP technology implementation initiatives.
45% of organizations with CoEs are already live on SAP S/4HANA, compared to just 29% of organizations without CoEs, according to research that surveyed 148 ASUG members about the role and benefits of CoEs at organizations pursuing business transformation. This marks ASUG’s second year of collaboration with SAP on research around this topic.
Organizations with CoEs are more likely to be in the later stages of their business transformation journeys, according to the research, which also indicated the importance of CoEs to the effective implementation and utilization of complex software solutions, including the SAP Signavio suite for business process transformation.
While 47% of ASUG member organizations surveyed have CoEs, the research reveals that organizations take diverse approaches to establishing them. ASUG members also identified key steps to consider in establishing a CoE, such as:
- Forming a team by first identifying existing expertise within the organization, then looking externally to address any skill or knowledge deficits.
- Aligning the goals of the CoE with the overarching transformation goals of the business.
- Continuously making improvements to the CoE as further business needs are identified.
- Ensuring collaboration across the organization.
Wide-ranging teams by design, CoEs are most likely to include SAP analysts, subject matter experts (SMEs), SAP solutions architects, process owners, and SAP Basis or database administrator (DBA) leads. Given how diverse the roles represented within an organization’s CoE can be, based on business needs, our research indicates that success is all about finding the right people, rather than the right titles.
ASUG research also offers insights into the benefits organizations have realized from establishing CoEs:
From operational efficiency to improved customer satisfaction and user productivity, CoEs contribute multifaceted advantages to SAP business process transformation. Of note: 77% of respondents indicated the importance of a CoE serving as a central point of contact for all SAP-related matters, unifying various technology modernization efforts throughout an organization.
Broader business challenges can prevent organizations from effectively establishing a CoE, according to ASUG research into top obstacles encountered during modernization initiatives. As in other technology initiatives, staff shortages (55%) and budget concerns (45%) present hurdles to establishing a CoE. Other challenges include the existence of too many manual workarounds (35%), an abundance of broken or flawed business processes (35%), and a lack of company-wide commitment/prioritization (34%).
Such challenges emphasize the need for effective change management and resource planning when embarking on business transformation journeys. Addressing these challenges requires a holistic approach that combines technology, processes, and people. But the research shows that benefits of establishing a CoE are compelling and help organizations navigate the complexities of potentially transformative technologies.
Marissa Gilbert is Director of Research at ASUG.