Tag: CoE

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.

Four Reasons Enterprises Aren’t Getting Full Value from their Automation CoEs | Blog

As we mentioned in our Enterprise RPA Pinnacle report, there are multiple benefits of having an automation CoE:

  • Facilitates best practices and skill development, which eventually help in faster scaling-up
  • Provides structure and governance to the automation program, e.g., clarifies roles and responsibilities of various teams involved
  • Enables optimization of software and license costs
  • Fosters sharing and pooling of resources
  • Develops strong cross-functional collaboration among stakeholders.

While many enterprises have established CoEs to overcome challenges and accelerate their automation journeys, not all have been able to extract value from them. Here are some common pitfalls that limit the true potential of an automation CoE.

4 reasons not getting full value automation coe

No Enterprise-level Mandate to Drive all Automation Initiatives through the CoE

Automation CoEs work when there is a clear mandate from enterprise leadership. This directive helps ensure that the operating procedures and governance mechanisms are standard across the enterprise. Lack of it could result in the enterprise driving automation initiatives in pockets, leading to potential cost increases, lower license utilization, lower reusability of automation assets, and increased governance challenges.

Lack of Relevant Capabilities within the CoE

In its true sense, a CoE represents an entity with the capability to drive automation initiatives across the enterprise independently, with minimum oversight from outside. In many enterprises, however, automation CoEs lack the relevant skill sets – such as developers, project managers, solution architects, and infrastructure support staff – that are critical to driving these initiatives. Successful CoEs typically have three focus areas: day-to-day delivery, operational/tactical decision making, and strategic decision making/providing direction. Each layer, or focus area, has a unique set of roles and responsibilities that are critical to a smooth functioning CoE. Successful CoEs have an intentional focus on developing and nurturing in-house talent to strengthen the capabilities across the three layers. Many CoEs also bring in third-party specialists to accelerate learning. Our blog titled Driving Success in Your Automation Center of Excellence provides more details.

Loosely Defined CoE Roles and Responsibilities

The role of an automation CoE goes beyond just deploying bots into production. CoEs in best-in-class adopters of automation have evolved from executing solutions to empowering businesses across locations to drive initiatives on their own. For instance, the automation CoE in a financial services firm has established standard operating procedures (SOPs) for driving automation initiatives which include a well-defined approach for process selection, evaluation of ROI, talent impact, access to a library of reusable assets, etc. The CoE has created a platform through which business leaders can access these SOPs to evaluate opportunities on their own, and provides necessary governance and execution support, including talent and infrastructure.

As highlighted in Everest Group’s Smart RPA Playbook, the typical roles and responsibilities of automation CoEs include:

  • Providing training and education to develop talent
  • Approving all automation procedures before they are put into production
  • Assessing suitability of Smart RPA versus other Smart IT tools for use cases
  • Ensuring quality and compliance through well-defined standards, procedures, and guidelines owned and developed by the CoE
  • Driving the roll-out and implementation of Smart RPA projects, and ensuring coordinated communication with relevant stakeholders
  • Defining the roles, responsibilities, and skills sets required for driving automation across the enterprise, and regularly reviewing and optimizing them
  • Tracking success/outcomes in collaboration with operational teams so they can build, review, and refine the business case for scaling up.

Disconnect between Automation Strategy and Broader Digital Transformation Objectives

Outcomes achieved through automation initiatives are best realized when these investments are in line with the enterprise’s broader digital transformation objectives. Factors such as investments in other digital technologies (e.g., ERP transformation), changes in leverage of Global In-house Centers (GICs) or shared service centers, changes in vendor roles, etc., can have an impact on automation strategy. Automation CoEs need to closely align with enterprise strategy to realize maximum value.

Pinnacle EnterprisesTM – which we define as companies that are achieving superior business outcomes because of their advanced capabilities – have mastered each of these four requirements for successful automation CoEs. To learn more about how they’re maximizing value from their automation CoEs, please see our Enterprise RPA Pinnacle report.

Feel free to share your opinions and stories on how your automation CoE is evolving in its journey directly with me at [email protected].

Enterprises Leverage Global In-House Centers (GICs) to Create Centers of Excellence to Drive Innovation, Digital Transformation | Press Release

Growing GIC Center Segment Now Accounts for One-Fourth of $185 Billion Global Services Market—Everest Group

Enterprises are increasingly leveraging global in-house centers (GICs) as strategic partners; GICs are playing a significant role in enterprises’ digital transformation journeys as they move from a “arbitrage-first model” toward a “digital-first model.” According to Everest Group, GICs are perfectly suited to serve as Centers of Excellence, driving innovation for their parent companies. One key way that GICs are accomplishing this is by collaborating with the external ecosystem, such as nimble tech startups.

Three models typically adopted by GICs to engage with external innovation ecosystems comprise:

  1. Startup evaluation: The GIC identifies and shortlists startups for the parent organization. No infrastructure or financial support is offered to the startups, but the GIC typically helps the startups in building domain knowledge.
  2. Project-based engagement: The GIC evaluates startups, which are then hired as technology vendors on commercial terms to implement turnkey solutions. This model offers higher predictability in deriving tangible benefits from the engagement.
  3. Incubation and acceleration: The GIC acts as an incubator and runs the accelerator program: Typically, the GIC engages with three to five startups for a dedicated period, offering infrastructure, technology, financial support and mentorship. This model allows experimenting with future technologies and the bringing in of disruptive innovations.

“GICs typically have an enterprise-wide perspective, deep domain and process experience, and access to niche skills at a favorable cost, and so, for these reasons, GICs are often in a unique position to foster innovation and serve as Centers of Excellence for their parent companies,” said Sakshi Garg, practice director at Everest Group. “Leading GICs are adopting several best practices for fostering innovation, such as dedicated investments for innovation, special recognition for thought leadership, and driving customer centricity to grow beyond the service delivery mindset.”

The global sourcing market continued to evolve and grow rapidly in 2017 to cross US$185 billion, and the global in-house center (GIC) model remains an integral component of this evolution, accounting for one-fourth of the market, according to Everest Group.

The GIC market saw a 10 percent increase in 2017 over 2016 in the number of new GIC setups by companies from technology and communications, manufacturing, healthcare, and energy and utility verticals. The market has grown consistently with more than 2,800 centers set up across leading offshore and nearshore locations, compared to approximately 2,100 about five years ago.

The research supporting these findings is summarized in “Global In-house Center (GIC) Landscape Annual Report 2018 – GICs Emerging as Innovation CoEs for Global Enterprises,” a report recently published by Everest Group. This report provides a deep dive into the GIC landscape and a year-on-year analysis of GIC trends. The research brings out key insights into the GIC market across locations, verticals and functions, and concludes with an assessment of the role played by GICs to drive innovation for the enterprises.

***Download a complimentary abstract of the report here.***

Have a question?

Please let us know how we can help you.

Contact us

Email us

How can we engage?

Please let us know how we can help you on your journey.