EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
Recent Searches
Centres of Excellence (CoE) are hubs for innovation and expertise, improving efficiency and performance in specific functional areas.
In brief
- Organizations increasingly leverage their Global Capability Centers (GCCs) to set up in-house Centres of Excellence (CoEs), aiming to enhance and deliver sustainable business value.
- GCCs are strategically positioned to drive CoE establishment, offering cost-effective implementation while harnessing specialized expertise within the GCCs to promote innovation and operational excellence.
As organizations seek sustainable business value and operational efficiencies, Centres of Excellence (CoEs) have emerged as vital knowledge hubs, fostering innovation and ensuring high-quality outputs. Comprising domain-specific experts, CoEs streamline processes, tackle challenges, and expedite decision-making, contributing significantly to the attainment of strategic goals.
Evolving into global solution centers, CoEs facilitate 360° excellence, serving as adept business partners. By streamlining processes, accelerating ideation, and facilitating innovation delivery, they enable comprehensive organizational excellence.
Factors influencing the CoE setup
The establishment of Centres of Excellence (CoEs) within organizations is driven by a multitude of factors that stem from the need for strategic alignment, operational efficiency, and sustained growth. In today's dynamic business landscape, organizations are confronted with evolving challenges, technological advancements, and changing market dynamics, prompting the recognition of CoEs as essential enablers of success. Companies typically establish Centres of Excellence (CoEs) for several key reasons. Firstly, to manage operations by minimizing transactional activities, driving best practices, and enabling informed decision-making. Secondly, to expand operations by facilitating capacity building, driving expansion initiatives, monitoring performance, and delivering results. Lastly, to transform operations by driving innovation initiatives, assessing emerging technologies, fostering collaboration, and promoting cross-functional alignment.
Core components of a CoE
Centres of Excellence (CoEs) are designed to be adaptable entities within organizations, capable of evolving alongside shifting business landscapes. CoEs adopt an incremental approach, grow gradually, aligning their capabilities with evolving organizational needs. This incremental approach allows for flexibility and responsiveness, ensuring that CoEs remain relevant and effective in transformational environments.
Furthermore, by gradually building upon initial successes and insights, organizations can tailor CoEs to address specific challenges and seize emerging opportunities, thereby maximizing their impact over time. Depending on organizational needs, the size of the CoE varies. The core components of CoE are:
GCCs are best placed to drive CoE setup
Global Capability Centers (GCCs), with their global coverage, access to skilled talent, cost efficient infrastructure, and access to partner ecosystems, are uniquely positioned to drive Centres of Excellence (CoE) setup and deliver operational excellence and innovation leading to sustained growth. 54% of GCCs in India have either set up or are focusing on setting up technical and non-technical CoEs1.
GCCs offer strategic alignment by closely adhering to organizational goals, ensuring overall synergy. Additionally, GCCs provide access to specialized talent with new-age skills and competencies across various functions and technologies. Their cost-effective setup, located in low-cost regions with scalable infrastructure, helps reduce overall expenses. An integrated setup enables seamless collaboration, improving overall performance. GCCs also accelerate setup by leveraging their existing knowledge base, process documents, and frameworks to fast-track CoE implementation. Lastly, they benefit from a robust partner ecosystem, facilitating rapid innovation through access to industry consortia, academia, and start-ups.
Below are a few examples of certain established and emerging CoE setups by GCCs
Key considerations for CoE setup
To ensure accelerated and successful implementation, GCCs must proactively address certain key pillars. First, GCCs need to establish clearly defined focus areas, such as process improvement, innovation, knowledge management, and risk mitigation. Executive buy-in and sponsorship are also crucial. GCCs must also secure leadership support and business case sponsorship.
A clear roadmap is essential to achieve the CoE’s target objectives, including toolkits and accelerators to meet desired goals. Metric-based delivery and team structure should be in place, with specific metrics to measure performance and effectiveness, and a clear team structure defining roles, responsibilities, and reporting lines. GCCs’ ability to evolve is critical, hence it requires an operating model that promotes collaboration and an organizational design agile enough to adapt to changing business needs must be ensured.
Accelerate your CoE setup journey
EY’s multi-functional expertise and cross-sector focus has enabled organizations and GCCs to streamline and accelerate their CoE setup. EY has helped several organizations accelerate their CoE setup journey and deliver sustainable value. Here are a few recent examples:
Case studies
US-based FMCG firm
Sought to establish its automation CoE in India. EY collaborated closely with the firm’s stakeholders and the IT team to set up the CoE, identify potential automation opportunities and streamlined business requirements. As a result, the firm successfully delivered over 80 high-quality automation bots, releasing 65,000 person-hours.
Multinational beverage and snacks company
Partnered with EY to build Generative AI capabilities aimed at enhancing sales. By implementing this technology, the company significantly reduced its manual workload by over 30 times and achieved a three-fold improvement in accuracy for product artwork validation within their sales applications.
Global agribusiness firm
Engaged with EY to set up and transform its ESG (Environmental, Social and Governance) capabilities. EY conducted a thorough gap analysis, engaged cross-functional stakeholders to assess the materiality of ESG topics, and developed a roadmap to address high priority regulatory requirements and finalized a robust ESG reporting framework.
Way forward
Global Capability Centers (GCCs) are particularly well-suited for spearheading CoE setups due to their strategic alignment, access to specialized talent, cost-effective infrastructure, and robust partner ecosystems. This unique positioning enables GCCs to deliver organizational excellence through streamlined processes, accelerated ideation, and innovation delivery. By implementing the right measures and leveraging partners like EY, organizations can ensure successful CoE implementation and scaling. This not only enhances operational excellence and innovation but also leads to sustained growth and competitive advantage in a rapidly changing business landscape.
Summary
Leveraging GCCs to establish Centres of Excellence allows companies to concentrate on their expertise, foster innovation, optimize costs, and align more closely with strategic business goals, all while enhancing their agility and competitive position in the market.
How EY can help
-
Our Global Capability Centers(GCC) Advisory practice, led by a team of professionals can help your business be future-ready for the digital disruption.
Read more -
Our team of professionals can help achieve your GCC vision. Find out more about our shared services centers in India.
Read more -
Discover how EY's technology transformation team can help your business fully align technology to your overall purpose and business objectives.
Read more
Related content
Embracing the future: GCCs spearheading innovation with new-age services
Discover how GCCs are diversifying their suite of offerings by adding new-age services to their service portfolio.
Join us at the EY GCC GenAI Conclave 2024 to hear from industry experts on flagship event for GCC leaders of leading organizations across India, focussed on trends and topics concerning today’s GCCs.
Bengaluru, IN
How is data driving a new order for global capability centers (GCCs)?
Discover how GCCs empower organizations with data-driven insights and strategic growth. Unlock the full potential of data today.