Across all industry sectors, organizations are facing mounting pressures due to rising inflation, labor shortages and supply chain disruptions. To address these challenges, the focus should be on improving their technological and workforce capabilities. Whether it’s stagnant productivity, the rapid pace of technological advancement, or the ongoing challenge of retaining top talent, companies are struggling to keep up. In fact, Forbes reports that 70-80% of digital transformation initiatives fall short, and inefficiencies in processes and technology implementation are costing enterprises up to 30% of their operational budget—and for some organizations this amounts to $16 million per year.
This is exactly where Centers of Excellence thrive. These are specialized teams and units built to tackle specific challenges by contributing a wealth of expertise and provide businesses with the know-how needed to overcome specific business hurdles. Once implemented correctly they can solve immediate concerns and become a blueprint to prevent those issues from coming back in any other initiatives.
What is a Center of Excellence (CoE)?
A Center of Excellence (CoE) is more than just a team of subject matter experts; it is a strategic framework that centralizes specialized knowledge, streamlines workflows, and fosters continuous improvement across key functions. Acting as a catalyst for innovation, CoEs ensure that business processes align with the organization’s long-term goals, enhancing optimization and scalability.
The implementation of CoEs is largely driven by a company’s unique needs and can vary significantly from one organization to another. Each department can gain many advantages from the focused resources and expert-driven initiatives that CoEs provide. Common areas where CoEs are frequently established include:
- Artificial Intelligence and Machine Learning
- Digital Transformation
- Cybersecurity
- Research & Development
- Human Resources
- Data Analytics
- Project Management
- Customer Experience
Why organizations need CoEs when using AI and advanced technologies
Because AI has quickly become a major force in innovation, many businesses are attempting to integrate and increase AI projects. The complexities surrounding AI implementation—from managing data and governance to ensuring compliance—demands a more structured approach.
CoEs dedicated to AI can provide a structured framework for growth in new technological areas for organizations to harness while mitigating the challenges that come with it. Here’s why CoEs are particularly essential for AI and advanced technological initiatives:
Consolidating AI expertise
AI is a highly specialized field comprised of many disciplines and is ever evolving. Currently it encompasses everything from machine learning and data science to natural language processing and computer vision. By establishing an AI CoE, organizations can consolidate expertise, ensuring that projects are consulted and steered by experts who understand the intricacies of technology and can share insights. This in turn enables faster innovation, reduces redundancy, and creates a knowledge hub that other departments can tap into.
Standardizing AI best practices
The implementation process for AI can be rather inconsistent if left to individual teams or departments, leading to inconsistent levels of success. An AI CoE can establish clear guidelines along with best practices, to ensure that AI projects throughout the organization are consistent and in line with business goals. This structured approach reduces errors, promotes scalability, ensures reliable quality and achieves desired outcomes.
Driving innovation with focus
Due to the speed in which AI continues to evolve, the demands for continuous research, experimentation, and development are endless. A CoE enables organizations to prioritize long-term AI strategies to liberate resources for dedication towards innovation without disrupting day-to-day operations. By establishing an AI CoE, companies can stay in the lead of industry trends, explore new applications, and maintain a competitive edge in their AI pursuits.
Mitigating risks
AI projects often involve complex algorithms, large datasets, and regulatory considerations. CoEs can help reduce these risks by making sure projects are well-governed, adhere to applicable laws, and uphold ethical standards. With dedicated oversight, organizations can better manage potential consequences of AI use, such as data privacy concerns or biases in learning models.
How to effectively incorporate CoEs into your organization
While centers of excellence are highly appealing, their success hinges on several key factors: a shared understanding of business goals, clear definitions, effective communication, and precise execution. Without the right planning, leadership, and structural foundation, a CoE can easily become an isolated unit, disconnected from the organization’s broader goals and incapable of delivering real value. Here are key aspects that businesses should follow when setting up CoEs.
1. Clear vision and goals
A CoE must have well-defined goals that align with the broader organizational objectives. Whether the focus is on AI, cybersecurity, or digital transformation, the CoE’s goals should be specific, measurable, and actionable, enabling the unit to continuously track and demonstrate value. Leadership buy-in is essential to ensure the CoE's objectives are prioritized across the organization.
2. Governance and structure
Clear governance frameworks are essential for CoE success. This involves establishing roles, responsibilities, decision-making processes, and accountability mechanisms. CoEs should have dedicated leadership, often a mix of technical experts and business leaders, to guide the unit in both innovation and alignment with organizational goals.
3. Cross-departmental integration
To avoid siloed CoEs, organizations need to integrate these specialized teams with other departments and business units. Encouraging cross-functional teams and fostering communication between different areas of the business helps ensure that discoveries of innovations and processes are adopted and adapted by other departments, increasing overall efficiency and impact.
4. Sustained investment in talent and tools
The effectiveness of CoEs depends on the quality of individuals and tools at its disposal. Businesses must nurture and appropriately invest in ongoing skill development and upskilling opportunities for members of the CoE, while also ensuring they have access to the latest technology and resources. This enables the CoE to remain at the cutting edge of industry trends and advancements.
5. Measurement of value
CoEs must be constantly evaluated by tracking key performance indicators (KPIs) that tie back to its mission and goals. This could involve measuring cost reductions, process improvements, time-to-market acceleration, or innovation impact. By continually assessing its contribution, the CoE can make necessary adjustments to stay aligned with organizational needs.
Success story: transforming operations through a Center of Excellence
A prime example of a successful CoE) can be seen in the world’s largest brewing company, Anheuser-Busch InBev (AB InBev), and its Belts Program. Named after the Six Sigma certification levels, this program focuses on empowering employees to enhance their expertise in process management and quality improvement.
Through the Belts Program, AB InBev has trained over 2,500 employees in Lean Six Sigma methodology. This initiative enables leaders within the organization to tap into a robust internal network of consultants, who span various functions and locations. These trained individuals are embedded throughout the company, allowing AB InBev to continuously improve processes, optimize resources, and maintain high-quality standards. By leveraging this community of internal experts, AB InBev demonstrates how a well-executed CoE can transform operational efficiency and create a culture of continuous improvement.
Start implementing CoEs today
Modern enterprises are facing new challenges stemming from breakthroughs in AI which are in addition to ongoing concerns about persistent disruption, workforce shortages, and growing prices Unfortunately, these difficulties are not going away anytime soon. To prosper and stay competitive, organizations must create structures that encourage creativity, efficiency, and teamwork. A well-implemented Center of Excellence can serve as the cornerstone of your AI efforts.
We at Alithya believe that the time to act is now. By identifying areas where artificial intelligence can have the most immediate impact and starting with small, focused projects, your organization can begin to see transformative results. With over 30 years of experience as a global provider of digital transformation solutions, we are equipped to address your company’s immediate challenges and set you up for long-term success. With the right strategy, vision, and leadership, your Center of Excellence can achieve new levels of productivity and innovation for your organization. Contact us today for help with agile and/or technology training to begin building your own CoE or engage with our experts to start planning your AI integration roadmap now.