Author: Param Dhar

The Evolution of the Automation CoE Model – Why Many GBS Centers Are Adopting the Federated CoE Model | Blog

Automation CoEs in Global Business Services (GBS) centers or Shared Services Centers (SSCs) have evolved over time. Mature GBS adopters of automation have made conscious decisions around the structure and governance CoEs, evolving to extract maximum value from their automation initiatives. Some of the benefits they have hoped to gain from the evolution include:

  • Faster scaling
  • More efficient use of automation assets and components, such as licenses and reusable modules
  • Better talent leverage
  • Greater business impact

The typical CoE model evolution

CoE models generally evolve from siloed model to centralized and then to a federated:

Siloed model – kick starting the journey

Most GBS centers start their automation initiatives in silos or specific functions. In the early stages of their automation journeys, this approach enables them to gain a stronger understanding of capabilities and benefits of automation and also to achieve quick results.

However, this model has its limits, including suboptimal bot usage, low bargaining power with the vendor, lower reusability of modules and other IP, limited automation capabilities, and limited scale and scope.

The centralized model – building synergies

As automation initiatives evolve, enterprises and GBS organizations recognized the need to integrate these siloed efforts to realize more benefits, leading to the centralized model. This model enables benefits such introducing standard operating procedures (SOPs), better governance, higher reusability of automation assets and components, optimized usage of licenses and resources, and enforcement of best practices. This model also places a greater emphasis on a GBC-/enterprise-wide automation strategy, which is lacking in the siloed model.

However, this model, too, has limitations, suffering slow growth and rate of coverage across business units because the centralized model loses the flexibility, process knowledge, and ownership that individual business units bring to the bot development process.

The federated model – enabling faster scaling

The federated model addresses both of the other models’ limitations, enabling many best-in-class GBS centers to scale their automation initiatives rapidly. In this model, the CoE (the hub) handles support activities such as training resources, providing technology infrastructure and governance. Individual business units or functions (the spokes) are responsible for identifying and assessing opportunities and developing and maintaining bots. The model combines the benefits of decentralized bot-development with centralized governance.

The federated model has some limitations, such as reduced control for the CoE hub over the bot development and testing process, and, hence, over standardization, bot quality and module reusability. However, many believe the benefits outweigh the drawbacks.

The three CoE models are described in the figure below.

The table shown below shows how the three models compare on various parameters.

Why GBS organizations are migrating to the federated model

There are several reasons why GBS centers are moving to the federated model, as outlined below.

  • The federated model helps to better leverage subject matter expertise within a business unit. With bot development activity taking place within the BU, the federated model ensures better identification of automation opportunities, agile development, and reduced bot failures
  • The federated model leads to efficient resource usage. Centralization of support activities ensures: efficient use of resources, be they human, technology, reusable modules, licenses, etc.; standardization; and, clear guidance to individual business units
  • The federated model facilitates development and sharing of automation capabilities and best practices, which helps in the amassing of standardized IP and tacit knowledge important for rapid automation scaling

Federated model case study

A leading global hardware and technology firm’s GBS center adopted the federated CoE model, which houses the CoE hub, in 2017. In the three years since, it has grown to over 400 bots across more than 20 business units in a wide variety of locations, and saved more than $25 million from automation initiatives. The CoE hub has also successfully trained over 1,000 FTEs from technical and business backgrounds on bot development. As a result, firm-wide enthusiasm and involvement in the GBS center’s automation journey is high.

Transitioning to a federated CoE model has helped many GBS programs scale their automation initiatives rapidly. For more details, see our report, Scaling Up the Adoption of Automation Solutions – The Evolving Role of Global In-house Centers or reach out to Bharath M  or Param Dhar for more information on this topic.

Is Your Shared Services Center Driving Automation Across Your Enterprise? | Blog

Over the past few years, automation has become an integral part of Shared Services Centers’ (SSCs) growth and evolution. Whether large or small, whether onshore, nearshore, or offshore, SSCs – what we refer to as Global In-house Centers (GICs) – have made strong progress in adopting automation solutions.

Some have only dipped their toe into basic RPA. Others have moved ahead with more advanced automation technologies like machine learning and artificial intelligence. And a handful have started emerging as key strategic and revenue-generating entities for their parent companies. These GICs have built scaled delivery teams with strong domain knowledge around the implementation of automation solutions. There are multiple instances of GICs housing the global automation Center of Excellence (CoE) and driving initiatives across the enterprise. Aggressive adopters have moved beyond automating processes within the center and are now supporting process automation across locations and businesses. And they’re increasingly leading the design and execution of automation strategy, and are influencing decisions on go/no-go opportunities.

Everest Group’s recently published report Scaling Up the Adoption of Automation Solutions – The Evolving Role of Global In-house Centers discusses the key adoption trends and challenges in the GIC and automation space.

Let’s take a quick look at the four key trends.

Solutions and support

Some mature GICs have developed multiple offerings to support different businesses. Typical offerings include advisory support, platform or infrastructure support, and end-to-end implementation support. For instance, the India GIC of a leading European insurance firm provides bot infrastructure support to the company’s Singapore entity. With this set-up, the Singapore-based team didn’t have to invest in its own infrastructure to gain full access to the bots’ capabilities.

The talent ecosystem

From developing in-house automation talent to managing vendor resources, SSCs are making major strides in the talent management space. As part of their talent management strategy, many best-in-class GICs are investing heavily in building in-house talent, especially for AI-based solutions. This includes developers, data scientists, and project managers. These GICs are also investing significantly in upskilling/reskilling programs for their resources, and are strongly emphasizing education and awareness of automation’s capabilities and benefits. Some GICs are also training their business/operations resources on automation skills; this helps them scale-up faster.

CoE roles, governance mechanisms, and structures

Many GICs are upgrading their CoE model, roles, and responsibilities as they progress along their automation journey. Many successful centers are moving towards the federated hub and spoke CoE model, wherein the GIC houses the CoE hub and the functions have their own automation team (spokes.) The federated model enables rapid scalability and better opportunity identification than centralized CoEs. But, with either model, there are some pitfalls to avoid. Our blog titled Four Reasons Enterprises Aren’t Getting Full Value from Their Automation CoEs details what they are.

In-house automation platforms

Building on their understanding of automation capabilities, some mature GICs have started exploring the use of custom-built in-house platforms to run automations. While in most cases these are for attended RPA bots, some best-in-class SSCs have developed platforms using advanced technologies such as interactive virtual assistants (IVA) and machine learning. There are even a few examples of GICs adopting a 100 percent in-house development model, meaning no third-party vendor support. While we expect GICs to continue exploring in-house automation tools, we don’t expect that these will replace the use of third-party vendor products in the near future.

What GICs have accomplished over the past few years in scaling up the adoption of automation solutions across businesses and locations is just the tip of the iceberg. Going forward, they are likely to build on this foundation and penetrate deeper into the enterprise with ever more complex automations.

To learn more, please read our report — Scaling Up the Adoption of Automation Solutions – The Evolving Role of Global In-house Centers – or contact us directly at Bharath M or Param Dhar.

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