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Enterprise ApplicationsCenter of Excellence

A Maturity Model

Michael DoaneMETA Group


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Why an ERP Center ofExcellence?

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 supportof ERP and related

functions (ERP/CRM/SCM)

Optimization of current

system usage

Continuous

business improvement

Prepare the company for

transformational change

(all the time)

As Is

To Be

Center of Excellence Functions

Business

IT


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The Enterprise Applications Value Chain

It is imperative to linkend users to profit & loss

Without measurement,

you cannot begin

Business processimprovement 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

Sample Business Performance KPIs

Return on sales

Return on assets

Net sales per employee

Ratio of Assets/Liabilities

Procurement

Process

Production

Process

Sample Major Business Processes

Business Process Drivers

Key Performance Indicators

Profit & Loss

SAP User Competency

Software


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Foundation of Organization Planning

Two aspects of IT

Business-specific activities = the Center of Excellence

Infrastructure/support ~ Foundation Services

Architecture

Infrastruc

ture/

Operations

ITR

esource/

Governance

Center of Excellence


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Continuous Education

Multi-site Virtual CoE

Finance Sales Logistics

Enterprise Program Management

Production

Users

Continuous Education

Users Users Users

Integration Management(Functional, Cross-Application)

Custom Applications

Software Configuration & Support

Help Desk

Production Control/Change Management

Integration Management (Technical)

Process Owners

Users Users Users Users

Functional Oversight

Remote

Custom Applications

Process Oversight


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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

Business/ Enterprise End

IT Alignment Applications Users Infrastructure

1Core 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.

2Stable 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.

3CoE 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.

4CoE 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.

5CoE 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 ImplementationConcerns 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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2

1%

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 tothose 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, whichlevel 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/Recommendations The CoE must be led by business staff

and business concerns (measurable)

A CoE will be sustained if measurementand business benefit are at the

foundation

People/processes tend to decaythrough time

Maturity is accelerated when benefits are

achieved

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