Finance is changing its operating model to align it with the new digital reality. One of the more pronounced trends is toward placing activities, people and technologies in hubs, like centers of excellence or COEs. It saves money. It’s proved to enhance performance and promote knowledge sharing and customer experience.
Not surprisingly, performance management and analytics COEs are becoming more popular. The Hackett Group research shows that within the next 2-3 years, 77% of finance organizations will establish performance management and analytics COEs. As organizations are looking to centralize and improve their analytics capabilities, CoE are grabbing the lion-share of the information-to-insight value chain.
As COEs mature, they are taking steps to augment their performance and refine their their service-delivery approach. For example, more advanced COEs:
- Take advantage of emerging enterprise systems. Our 2018 ERP in the Cloud Poll revealed that companies are considering cloud ERP an increasingly important aspect of their overall transformation efforts. Gradually replacing legacy on-premises ERPs with cloud solutions would enable COEs to better integrate their analytics tools with the enterprise platforms.
- Put more pressure on data governance rules. More COEs are pressing to extend master data management and data governance rules throughout their user community. Using the same data definition as well as standardizing how to approve new data and who has the right to make changes, significantly increases the value of analytics outcomes and helps standardize reporting.
- Review the demand-management process. As COEs concentrate more of the enterprise analytics requirements, they need to reconsider what requests must be answered first; how fast they need to respond; and how to prioritize and socialize their query queue. As part of this demand-management process review, COEs are considering offering more self-service analytics capabilities so they can focus on more complex issues.
- Collaborate more closely with the business. More mature COEs are working with the businesses they serve so that reporting is built into the design of a new systems and processes, rather than become an afterthought. It’s important that the business considers how to incorporate analytics and reporting needs into its new approach.
- Expand the customer base. As COEs evolve, they are also recasting themselves as the one-stop solution for information/analytics delivery. They are expanding beyond their traditional “customer” (finance) to providing analytics services across the enterprise. In fact, our 2018 Key Issues Study shows a projected growth of over 50% in the establishment of analytics COEs that are enterprise-wide in scope and are not reporting into the finance organization.
The trend in finance overall and analytics specifically is to pull like-minded experts and standardized processes into hubs. The hub approach encourages knowledge sharing; it improves customer services; and it helps optimize the use of newly implemented digital tools like advanced analytics and MDM solutions. As more organizations modernize their core operating systems, and as automation of ad-hoc reporting frees up analysts’ time to focus on value add activities, COEs will only add greater value to enterprise performance.