Door with caution tape.

Good or Bad?

Functional Centers of Excellence (COfE) are a fact of life in many organizations.  When used correctly, which is easier said than done, functional COEs deliver value.

  1. COfEs support building expertise for a skill set/discipline within an organization.  The implementation of new skills or disciplines within an organization need the community and protection a COE can generate.  
  2. Once a critical mass for skill set/discipline is established, a COfE provides a framework for an organization to use the skill set effectively. This approach is typical in a shared service approach for deploying people with special skills. COfEs act as both implementation and maintenance vehicles.  

The value delivered by a COfE in both of these scenarios to generate the impetus for adopting new practices and then protecting the nascent practice is high.  COfEs are a great tool until they are not.

Value of consolidating expertise is reduced when a COfE does not evolve or stays in start-up mode too long, which stifles innovation and evolution. When COfEs don’t evolve as fast as the organization, boundaries will be formed which stop protecting the growth of the COfE but rather begin to enforce orthodoxy.  New knowledge and expertise stop being created and the COE will become an enforcement arm for how things are done today. For example, early in the growth of agile methods, project management COfEs often fought tooth and nail to hold on to older practices and most importantly their staffing levels.  All COfEs should be formed with an expiration date and/or a goal to embed their knowledge into teams or programs so they can quietly disband and become communities of practice.

A second way the concept of a COE is reduced occurs when term COE is used as a code word for outsourcing types of work.  Testing COfEs are often created by organizations that decide that testing is not a core skill. Calling the outsourced testing group a center of excellence is typically a rationalization for not wanting to create cross-functional teams.  Outsourcing work is typically done for financial reasons rather than to foster a capability to develop a competitive advantage such as DevOps (or DevSecOps).

A thirds value sapper occurs when a COfE is used to manage “resources.” This problem occurs when an organization does not have enough of a scarce skill and believes the problem to be a utilization issue.  This approach to managing skill nearly always turns into a bottleneck. COfEs need to actively spread their knowledge and expertise outside their ranks to avoid being a bottleneck.

In all three cases, COfEs that are focused on developing a capability need to begin life with the goal of transferring their knowledge into the teams they support.  They need to take down the ring fence as soon as the COfE can stand on its own two feet. An excellent practice is for the COfE to evolve into a community of practice.  COfEs used to put a happy face on outsourcing will almost never be integrated back into the organization. Stop using the term and call them partner or outsourcing group.