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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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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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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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