What Is Center of Excellence?

A Center of Excellence (CoE) is a team or entity within an organization that drives innovation, best practices, and knowledge sharing in a specific domain. CoEs elevate organizational capabilities by fostering collaboration and aligning resources with strategic goals. They serve as catalysts for change, ensuring expertise is not siloed but integrated across functions.

Center of Excellence Best Practices, PPT Presentation Slide Deck, Excel, Word, & PDF Downloads

Trusted by over 10,000+ Client Organizations

Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.

Read Customer Testimonials

"One of the great discoveries that I have made for my business is the Flevy library of training materials.

As a Lean Transformation Expert, I am always making presentations to clients on a variety of topics: Training, Transformation, Total Productive Maintenance, Culture, Coaching, Tools, Leadership Behavior, etc. Flevy

... [read more]

– Ed Kemmerling, Senior Lean Transformation Expert at PMG

"Flevy.com has proven to be an invaluable resource library to our Independent Management Consultancy, supporting and enabling us to better serve our enterprise clients.

The value derived from our [FlevyPro] subscription in terms of the business it has helped to gain far exceeds the investment made, making a subscription a no-brainer for any growing consultancy – or in-house strategy team."

– Dean Carlton, Chief Transformation Officer, Global Village Transformations Pty Ltd.

"FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The

... [read more]

– Roderick Cameron, Founding Partner at SGFE Ltd

"As a consulting firm, we had been creating subject matter training materials for our people and found the excellent materials on Flevy, which saved us 100's of hours of re-creating what already exists on the Flevy materials we purchased."

– Michael Evans, Managing Director at Newport LLC

"If you are looking for great resources to save time with your business presentations, Flevy is truly a value-added resource. Flevy has done all the work for you and we will continue to utilize Flevy as a source to extract up-to-date information and data for our virtual and onsite presentations!"

– Debbi Saffo, President at The NiKhar Group

"As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor

... [read more]

– Michael Duff, Managing Director at Change Strategy (UK)

"As a consultant requiring up to date and professional material that will be of value and use to my clients, I find Flevy a very reliable resource.

The variety and quality of material available through Flevy offers a very useful and commanding source for information. Using Flevy saves me time, enhances my expertise and ends up being a good decision."

– Dennis Gershowitz, Principal at DG Associates

"I have used Flevy services for a number of years and have never, ever been disappointed. As a matter of fact, David and his team continue, time after time, to impress me with their willingness to assist and in the real sense of the word. I have concluded in fact

... [read more]

– Roberto Pelliccia, Senior Executive in International Hospitality

Center of Excellence Best Practices & Insights

Center of Excellence Best Practices

Center of Excellence Overview The Case for Centers of Excellence Establishing a Center of Excellence Effectiveness of a Center of Excellence Transforming Through the Center of Excellence Center of Excellence FAQs Recommended Documents Flevy Management Insights Case Studies

All Recommended Topics

When we think of establishing a sustainable competitive advantage, it brings to mind what Katsuaki Watanabe, the former President of Toyota, said about excellence: "There is no genius in our company. We just do whatever we believe is right, trying every day to improve every little bit and piece. But when 70 years of very small improvements accumulate, they become a revolution."

In the realm of business, a Center of Excellence (CoE), sometimes referred to as a competency or capability center, is a strategic approach to developing and nurturing internal competencies or capabilities to maintain a revolutionary edge. McKinsey points out that an effective CoE, when correctly built and run, can lead to a 10-15% improvement in efficiency and effectiveness.

For effective implementation, take a look at these Center of Excellence best practices:

Explore related management topics: Competitive Advantage

The Case for Centers of Excellence

A CoE centralizes expertise and knowledge for a specific area—be it talent management, digital transformation, data analytics, or risk management—and spreads it across the organization. A CoE aims not only to foster Innovation and Learning among its team members but also to spread that knowledge and best practices throughout the company.

The detailed study by PwC on CoE reveals that top-performing organizations have leveraged the CoE framework. It emphasizes that 77% of finance leaders report a moderate to a high level of centralization in their processes, achieved by establishing a financial CoE.

Explore related management topics: Digital Transformation Risk Management Talent Management Best Practices Data Analytics Innovation

Establishing a Center of Excellence

Given the potential benefits, many C-level executives might consider setting up a CoE. Here, we highlight key principles for creating a successful CoE:

Clear Objective and Scope: Be it promoting Innovation, ensuring Compliance, or improving Operational Efficiency, the CoE's objective should be clearly outlined and widely understood. Considering the CoE's scope can help firms prevent functional overlap or duplication of efforts and roles.
Competence Building: As the name suggests, a CoE should house experts in the field. Recruit and nurture talent with bespoke skills or invest in training and professional development.
Supportive Leadership: The leadership team's commitment is crucial for the CoE to achieve its objectives and gain traction across the organization.

Explore related management topics: Leadership Compliance

Effectiveness of a Center of Excellence

Just establishing a CoE doesn't guarantee success. Leaders must also continually assess the CoE's effectiveness. Metrics should be tailored to the specific business unit or function—for instance, in a Procurement CoE, you'd be looking at cost reduction or contract compliance rates.

Metrics to analyze a CoE effectiveness are typically a mix of quantitative and qualitative measures. Quantitative metrics include key performance indicators (KPIs), performance against targets, and return on investment (ROI). Qualitative evaluation could involve assessing customer satisfaction or staff engagement levels.

Explore related management topics: Customer Satisfaction Cost Reduction Key Performance Indicators Return on Investment

Transforming Through the Center of Excellence

While CoEs are traditionally tied to operational functions, a new trend is emerging with the rise of Digital Transformation. Organizations are building CoEs focused on changing their business mode and operations. An example is the ‘growth CoE’, which focuses on driving sales and market share. In a recent survey by Gartner, it was found that over 50% of digital businesses have or plan to set up a digital CoE.

As transformations become increasingly complex, the role of CoEs is becoming more strategic. They are no longer about just sticking to best practices—they're about innovating, driving change, shaping company culture and future-proofing the business. If properly managed, a successful CoE can indeed be revolutionary, living up to Watanabe's words. As executives, it is our job to ensure that our Centers of Excellence are more than just a name—they should be a force for continuous improvement and sustainable growth.

Explore related management topics: Continuous Improvement Sales

Center of Excellence FAQs

Here are our top-ranked questions that relate to Center of Excellence.

What strategies can be employed to ensure the continuous evolution and relevance of a Center of Excellence in rapidly changing industries?

Ensuring a Center of Excellence's relevance in rapidly changing industries involves Strategic Planning aligned with business goals, leveraging emerging technologies and Innovation, and fostering a culture of Continuous Learning and Adaptability. [Read full explanation]

What role does cross-functional collaboration play in enhancing the effectiveness of a Center of Excellence, and how can it be fostered?

Cross-functional collaboration is crucial for a Center of Excellence to drive Innovation, Operational Excellence, and align with Strategic Goals, fostered by open communication, shared goals, and collaborative technology. [Read full explanation]

What metrics are most effective for assessing the ROI of a Center of Excellence?

Effective ROI assessment of a Center of Excellence requires evaluating Financial Performance, Operational Efficiency, Innovation, Capability Development, and Strategic Alignment metrics. [Read full explanation]

What emerging technologies are most impacting the focus and methodologies of Centers of Excellence today?

Emerging technologies like AI, Blockchain, IoT, and Advanced Analytics are transforming Centers of Excellence by driving innovation, improving decision-making, and enhancing operational efficiency and customer experiences. [Read full explanation]

View more FAQs

Related Case Studies

Supply Chain Optimization Strategy for Maritime Logistics Firm

Scenario: A global maritime logistics firm is striving to become a center of excellence in its supply chain operations amid a challenging environment.

Read Full Case Study

Establishment of a Center of Excellence for a Global Financial Services Firm

Scenario: A multinational financial services firm is grappling with operational inefficiencies, inconsistent performance, and a lack of standardized best practices across its global locations.

Read Full Case Study

E-Commerce Center of Excellence Transformation for Retailer

Scenario: The organization is a mid-sized e-commerce retailer specializing in consumer electronics with a global customer base.

Read Full Case Study

Operational Efficiency Strategy for Agricultural Supply Chain Firm

Scenario: The company is a leading agricultural supply chain firm seeking to establish a center of excellence to tackle its strategic challenge of operational inefficiency.

Read Full Case Study

Wellness Center Growth Strategy for Boutique Fitness Organization

Scenario: A boutique fitness organization seeks to establish itself as a center of excellence within the highly competitive wellness industry.

Read Full Case Study

AgriTech Center of Excellence Efficiency Enhancement

Scenario: The organization is a mid-sized AgriTech company specializing in precision farming solutions.

Read Full Case Study