Center of Excellence (CoE) vs. Center of Enablement (C4E) Posted in Strategy Kristopher Sandoval July 7, 2021 The modern IT and business environment utilizes standard terminology to express intent and purpose. Two common terms used when discussing business-logic-driven development are Center of Excellence and Center for Enablement. But what do these terms actually mean? Are they just marketing jargon? And more specifically, which strategy is best suited for driving digital innovation? Today, we’re going to define and compare these two concepts. We’ll look at what each focuses upon and consider an example for driving digital innovation. What is a Center of Excellence? A Center of Excellence, or CoE, is a method of organizing resources and expertise to leverage resources towards creating and supporting unique solutions. The easiest way to think of CoE is to think of it as a team of specialists and experts who are laser-focused on one domain. For instance, if an API focuses on creating a better payment processing system, a Center of Excellence would include all of the experts, the resources, the knowledge, and the skillsets to focus entirely on this particular aspect. The Project Management Institute defines it as follows: “A Center of Excellence (CoE), and sometimes called a Center for Excellence (C4E), is a group of people with specialized skills and expertise whose job is to provide leadership and purposely disseminate that knowledge within your organization.” CoE is generally summarized as having a predictable set of characteristics localized around the business that the product is being developed for. The CoE will typically drive success in the relevant organizational unit wherein the product is being developed. In other words, the payment processing CoE will focus on success in the eCommerce side of the company, the user experience CoE will focus on the Consumer Support side, etc. The CoE is typically clearly defined and delineated by the organization as a discrete “unit” of resources. Perhaps most important, however, is that the CoE, despite working on a specific organizational focus, should provide this expertise globally to the business. The CoE may be designed to deliver on a specific product or function, owning those processes and resources. Still, the core expectation is that the CoE will also create value for the larger organization aligned with the business logic used to create it. Example Let’s assume we are building an eCommerce platform. We’ve seen some great successes early on, but we’re starting to see many uncommitted purchases; users add items to their cart but don’t complete their purchases. Unlocking this part of the flow could improve our sales significantly. In this case, we could build a Center of Excellence to identify the core issues, what we need to support, and what we can do to improve our performance against our metrics and goals. In this case, we might create a CoE containing user experience, eCommerce, and processing experts, all of whom can weigh in on the situation and create novel solutions. The CoE would have a singular domain focus, but the expertise driven by this process could inform the rest of the business, the business logic, and the APIs and systems developed from those elements. What is a Center of Enablement? A Center of Enablement, or C4E, is an alternative model. By contrast to the centralized repository of knowledge, skills, and resources represented by CoE, C4E hinges on enabling success through federated teams and non-centralized knowledge and ability. According to CloudWave: “The Center for Enablement (C4E) is an IT business model that enables organizations to create reusable resources, accumulate APIs, and improve best practices and knowledge to enable independent service and delivery in organizations and faster deployment of new solutions.” If CoE is akin to Oxford University, C4E is closer to Wikipedia. In a C4E structure, organizations create knowledge centers that are shareable and extensible throughout multiple projects and systems; in essence, C4E establishes a framework and resource center by which things can be developed rather than engaging in and driving the development by itself. C4E also differs from CoE in that the C4E is not necessarily located in the organizational unit that it’s relevant to. C4Es are designed to be highly mobile, independent, and transferable, and as such, their focus is on enablement of development rather than overseeing development. All resourcing and knowledge is decentralized and moves away from the idea of each challenge, product, etc., being a discrete core “project”. Examples Let’s revisit our example concerning an eCommerce platform. Adopting a C4E model, instead of creating a specific project-oriented team and process to drive success, we’d instead make a team to develop best practices. These best practices, APIs, and systems will be universally applicable to any system. After all, the user experience learnings for our eCommerce functions can still inform our user experiences across multiple ingress points. In building our C4E implementation, we should first understand what domains we are attempting to tackle. From here, we can start to improve systems and generate best practices to guide them. Perhaps people are not buying from their cart because the cart is not apparent enough within the buying workflow. Maybe people forget there are items there. Maybe, as we dig in, we find that the price quoted on the site changes radically with shipping costs, tax, etc., and people abandon their buying flow because of the radical price change. All of this can be fixed and used as a case study for other cases. For instance, the change in cost that annoys some users may be emblematic of an incorrect focus for all user-facing products. In a C4E model, improvements made to the eCommerce could also result in improvements in other products, enabling excellence without creating discrete projects solely for the application at hand. However, one should note that this avoidance of creating a project-driven solution only extends to thinking about each problem as a discrete one. C4E is actually quite heavy on the product mindset, considering the sum total of products and offerings as a product that has consumers with specific needs across the platform. Leading Digital Transformations Given that we have two very different options between C4E and CoE, what is the best strategy for leading digital transformations? Let’s summarize the core elements of each and see what we can glean. A Center of Excellence (CoE): Typically addresses a specific problem area with novel solutions. Leverages resources in a centralized way. Facilitates the success of a specific product or project. Conversely, a Center for Enablement (C4E): Addresses a problem by creating extensible and shareable best practices and solutions. Leverages resources in a decentralized way. Facilitates baseline success across the org and considers the use of these practices, assets, and guidance to be a true success metric. For these reasons, the specific implementation that will function best will depend entirely on the nature of what’s being innovated and evolved. Let’s consider our case from above — we have an eCommerce-driven platform that is lacking sales. Looking at this through two different lenses can start to show what each result may be. If we adopt a CoE process, we may be able to solve the immediate process issues. But what if the problem is wider than just the cart issue? What if the issue is more systemic than first suspected? A CoE-driven process may require creating evermore projects to address each systemic problem rather than addressing the issue as a whole. In some cases, this may be appropriate — for instance, if you have a single API that does a single business logic-driven function, a CoE would be best. But in this case, we have a systemic problem that is pervasive, wide, and varied. Within this lens, it’s clear that a CoE would be too narrow a focus. With a C4E implementation, however, we might be able to solve our core problem while facilitating greater success across the platform. Using a decentralized system that provides extensible best practices and solutions, we can solve our initial situation and drill down into possible core issues driving the actual user experience failure. More to the point, we can expand our problem-solving into new areas and adopt these processes to increase the value of the business as a whole. Conclusion Both CoE and C4E are solid contenders for leading innovation and digital transformation but within particular use cases. Accordingly, the “best” option will depend highly on your specific use case, your specific business logic, and most importantly, the needs of the organization and the nature of the problem being solved. While Centers of Excellence are great solutions for very specific and limited problems, they naturally create a somewhat myopic view. On the other hand, Centers for Enablement create much more general solutions and best practices to deal with many issues, but may not be best suited for relatively limited situations. What do you think about these options? Are there any better IT business logic models that we’ve yet to cover on Nordic APIs? Let us know below!