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Enterprise Applications Center of Excellence

A Maturity ModelMichael DoaneMETA 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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Parameters: Business Applications Span (ERP is the backbone)

Maintenance and support of ERP and related

functions (ERP/CRM/SCM)

Maintenance and support of ERP and related

functions (ERP/CRM/SCM)

Optimization of current system usage

Optimization of current system usage

Continuous business improvement

Continuous business improvement

Prepare the company for transformational change

(all the time)

Prepare the company for transformational change

(all the time)

As Is

To Be

Center of Excellence FunctionsBusiness

IT

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The Enterprise Applications Value Chain

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

Order Fulfillment Process

Order Fulfillment Process

Sample Business Performance KPI’sReturn on salesReturn on assetsNet sales per employeeRatio of Assets/Liabilities

Sample Business Performance KPI’sReturn on salesReturn on assetsNet sales per employeeRatio of Assets/Liabilities

Procurement Process

Procurement Process

Production Process

Production Process

Sample Major Business Processes

Business Process Drivers

Key Performance Indicators

Profit & Loss

SAP User CompetencySAP User Competency

SoftwareSoftware

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Foundation of Organization PlanningTwo aspects of “IT”

• Business-specific activities = the Center of Excellence

• Infrastructure/support ~ “Foundation Services”

Architecture

Infr

astr

uct

ure

/

Op

erat

ion

sIT

Reso

urce/

Go

vernan

ceCenter of Excellence

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Continuous EducationContinuous Education

Multi-site Virtual CoE

FinanceFinance SalesSales LogisticsLogistics

Enterprise Program ManagementEnterprise Program Management

ProductionProduction

UsersUsers

Continuous EducationContinuous Education

UsersUsers UsersUsers UsersUsers

Integration ManagementIntegration Management(Functional, Cross-Application)(Functional, Cross-Application)

Custom ApplicationsCustom Applications

Software Configuration & Support

Help DeskHelp Desk

Production Control/Change ManagementProduction Control/Change Management

Integration Management (Technical)Integration Management (Technical)

Process OwnersProcess Owners

UsersUsers UsersUsers UsersUsers UsersUsers

Functional OversightFunctional Oversight

Remote

Custom ApplicationsCustom Applications

Process Oversight

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META Group Maturity Modeling

Levels 1-5Levels 1-5

Elements or best practices (weighted)Up to 10 per maturity level

Categories

METAmap (META Group Maturity Assessment Program)

Hosted byCenter of Excellence Maturity Model

Business/ Enterprise End

IT Alignment Applications Users Infrastructure

1 Core ERP

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.

2 Stable ERPThe 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.

3 CoE Defined

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.

4 CoE Managed

KPI measures and targets are

in the system. EPMO directs

business process

transformation.

The applications portfolio has

been rationalized.

End users are trained to

business processes and

continuous training is in

place.

Enterprise applications

infrastructure is flexible.

5 CoE Evolving

Business process change is

guided by KPI performance

and configuration is in the

hands of business.

The applications portfolio has

been optimized.

End user job performance is

linked to business process

performance

Enterprise applications

infrastructure is adaptive to

applications changes.

Level

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The Consequences of Implementation

Concerns Pre Implementation Mistakes Noted After Implementation

Source: The State of ERP Services Multi-Client Study, META Group 2003

•Scale 1=Unimportant, 5=Very Important

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21%1

1%

Do you have some form of a CoE?

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

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Overall Results

METAmap (META Group Maturity Assessment Program)

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0% 0% 0% 0% 0%

1 2 3 4 5

Of those who have a CoE, which level have you attained?

1. Core ERP

2. Stable ERP

3. Defined CoE

4. Managed CoE

5. Evolving CoE

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Keys to CoE headcount control:1. Support given to Business Process Owners2. Direct software configuration by CoE (business-led)3. Active competency management/continuing knowledge transfer

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Conclusion/RecommendationsThe 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