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Enterprise Applications
Center of Excellence
A Maturity Model
Michael Doane
META Group
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Why an ERP Center of
Excellence?
 An optimization of business
processes that drive business
benefit continually
 An optimization of end user
competency and employee
fulfillment of business processes
 Continued coherence and
integration of functionality and
data through all process chains
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Center of Excellence Functions
Business
To Be
Prepare the company for
transformational change
(all the time)
Continuous
business improvement
As Is
Optimization of current
system usage
Maintenance and support
of ERP and related
functions (ERP/CRM/SCM)
IT
Parameters: Business Applications Span (ERP is the backbone)
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 It is imperative to link
end users to profit & loss
 Without measurement,
you cannot begin
 Business process
improvement is the
source of measurable
business improvement
 IT also has its ‘business
processes’: reduction of
IT costs applies to this
value chain
Profit & Loss
Key Performance Indicators
Sample Business Performance KPI’s
Return on sales
Return on assets
Net sales per employee
Ratio of Assets/Liabilities
Business Process Drivers
Sample Major Business Processes
Order Fulfillment
Process
Procurement
Process
Production
Process
SAP User Competency
Software
The Enterprise Applications Value Chain
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Foundation of Organization Planning
 Two aspects of “IT”
Business-specific activities = the Center of Excellence
Infrastructure/support ~ “Foundation Services”
Center of Excellence
IT Resource/
Governance
Infrastructure/
Operations
•
•
Architecture
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Enterprise Program Management
Remote
Process Owners
Process Oversight
Users
Users
Users
Users
Users
Users
Users
Users
Help Desk
Continuous Education
Functional Oversight
Continuous Education
Finance
Sales
Logistics
Production
Software Configuration & Support
Custom Applications
Custom Applications
Integration Management
(Functional, Cross-Application)
Integration Management (Technical)
Production Control/Change Management
Multi-site Virtual CoE
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META Group Maturity Modeling
Levels 1-5
Elements or best practices (weighted)
Up to 10 per maturity level
Categories
METAmap (META Group Maturity Assessment Program)
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Center of Excellence Maturity Model
Level
1 Core ERP
2 Stable ERP
3 CoE Defined
Business/
IT Alignment
Enterprise
Applications
End
Users
Infrastructure
There is a link between
business and IT for
configuration updates.
ERP is not overly
customized; core
implementation is complete
Basic end user training is
complete.
ERP infrastructure is
adequate.
The role of business in ERP
evolution is defined.
ERP is the backbone of
enterprise applications.
Applications interfacing is
complete.
End users fulfill ERP
functions without excessive
help desk or support.
ERP infrastructure is stable.
Business has active
ownership of business
processes. Current KPI is
measured.
The applications portfolio is
inventoried.
End users receive periodic
refresher training
ERP infrastructure is flexible.
Apps data is generally
synchronized.
The applications portfolio has
been rationalized.
End users are trained to
business processes and
continuous training is in
place.
Enterprise applications
infrastructure is flexible.
The applications portfolio has
been optimized.
End user job performance is
linked to business process
performance
Enterprise applications
infrastructure is adaptive to
applications changes.
KPI measures and targets are
in the system. EPMO directs
4 CoE Managed
business process
transformation.
5 CoE Evolving
Business process change is
guided by KPI performance
and configuration is in the
hands of business.
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The Consequences of Implementation
Concerns Pre Implementation
Mistakes Noted After Implementation
•Scale 1=Unimportant, 5=Very Important
Source: The State of ERP Services Multi-Client Study, META Group 2003
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Do you have some form of a CoE?
1.Yes
2.No
21
1%
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Level 1 Core ERP
 ERP is at the center of an applications portfolio
 The elements for this level are generally identical to
those of a successfully completed implementation
 It is imperative to keep the project team intact and
ready for transfer to the Center of Excellence
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Level 2 Stable ERP
 Most new ERP installations take 3 to 4 months to
achieve a state of stability
 In this period, project staff transitions to the Center
of Excellence
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Level 3 CoE Defined
 After stabilization of ERP, the Center of Excellence is
functional
 Attention turns to measures & benefits
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Level 4 CoE Managed
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Level 5 Evolving CoE
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End Users
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Business/IT Alignment
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Infrastructure
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Enterprise Applications
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Results by Maturity Elements
Results by Category
Overall Results
METAmap (META Group Maturity Assessment Program)
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Of those who have a CoE, which
level have you attained?
1.
2.
3.
4.
5.
Core ERP
Stable ERP
Defined CoE
Managed CoE
Evolving CoE
0%
0%
0%
0%
0%
1
2
3
4
5
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Keys to CoE headcount control:
1. Support given to Business Process Owners
2. Direct software configuration by CoE (business-led)
3. Active competency management/continuing knowledge transfer
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Conclusion/Recommendations
 The CoE must be led by business staff
and business concerns (measurable)
 A CoE will be sustained if measurement
and business benefit are at the
foundation
•
People/processes tend to decay
through time
 Maturity is accelerated when benefits are
achieved