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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 Optimization of current system usage Maintenance and support of ERP and related functions (ERP/CRM/SCM)
IT

As Is

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

Profit & Loss Key Performance Indicators Sample Business Performance KPIs 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

IT costs applies to this value chain

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

Infrastructure/ Operations

IT Resource/ Governance

Architecture

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Remote

Process Owners Process Oversight Users Users Users Users Users Help Desk Continuous Education Functional Oversight
Finance

Users

Users

Users

Continuous Education
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
Business/ IT Alignment There is a link between business and IT for configuration updates. Enterprise Applications ERP is not overly customized; core implementation is complete End Users Basic end user training is complete.

Infrastructure
ERP infrastructure is adequate.

1 Core ERP

2 Stable ERP

The role of business in ERP evolution is defined. Business has active ownership of business processes. Current KPI is measured.

ERP is the backbone of enterprise applications. Applications interfacing is complete. The applications portfolio is inventoried.

End users fulfill ERP functions without excessive help desk or support.

ERP infrastructure is stable.

3 CoE Defined

End users receive periodic refresher training

End users are trained to business processes and continuous training is in place. End user job performance is linked to business process performance

ERP infrastructure is flexible. Apps data is generally synchronized.

KPI measures and targets are in the system. EPMO directs 4 CoE Managed business process transformation. Business process change is guided by KPI performance and configuration is in the hands of business.

The applications portfolio has been rationalized.

Enterprise applications infrastructure is flexible.

5 CoE Evolving

The applications portfolio has been optimized.

Enterprise applications infrastructure is adaptive to applications changes.

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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 2 1%

1.Yes

2.No

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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

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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%
1

0%
2

0%
3

0%
4

0%
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