Strategies for Building and Nurturing a High-Performing Digital Center of Excellence

Achieving true digital transformation is not a mere surface-level makeover; it requires a profound shift in mindset, processes, and capabilities. This is where a Digital Center of Excellence (DCoE) emerges as a pivotal catalyst for success.

Picture it as the nerve center of your digital transformation journey—a dedicated team of DCoE experts and leaders who collaborate seamlessly to bridge the gap between your traditional business practices and the expansive digital frontier. Their mission? To infuse digital excellence into every facet of your organization.

In this blog, we embark on an exploration of the strategies essential for constructing and nurturing a high-performing Digital Center of Excellence. Whether you are in the early stages of building your DCoE or looking to enhance its capabilities, you will find valuable insights and actionable steps to propel your organization towards digital excellence.

Four Major Initiatives to Nurture a High-Performing DCoE

Once you’ve assembled a skilled team in your Digital Center of Excellence (DCoE), the next step is to channel their expertise towards achieving four vital transformation initiatives:

  • Embrace Agile Transformation for Digital Power

Never stick to a rigid, slow approach; let your DCoE champion agility. This means pushing for quicker release cycles, ongoing improvements, and frequent strategy checks. Being agile helps businesses adapt fast in the ever-changing digital world. For instance, think of a traditional manufacturing company. They decided to go agile in their DCoE. Instead of long product development cycles, they opt for shorter ones, staying nimble to adapt to market changes. This way, they regularly review strategies to match customer needs and market trends. This agility helps them respond swiftly to competition and customer demands.

  • Infuse Digital into Company Culture and Operations

From top brass to newcomers, digital transformation needs everyone on board. Change can face resistance, especially from those unfamiliar with digital ways. To shift your company culture, provide training to all, regardless of their digital background. For example, think of a financial institution on a digital journey. They offer training for all employees, teaching digital skills and sparking innovation. Even those not born in the digital age are urged to embrace digital tools. With time, this cultural shift makes employees more open to digital initiatives and aligns them better with the organization’s goals.

  • Invest in Digital Capabilities and Platforms

Many traditional companies wonder why they’re falling behind online, even as more consumers go digital. The reason often boils down to not investing enough in digital tools and advanced tech compared to tech-savvy rivals. To survive, businesses must keep up with the latest digital tools. This results in streamlining operations and ramping up profits. Think about a retail company struggling in the e-commerce world. They notice competitors are doing better thanks to superior digital capabilities. So, they invest in top-notch e-commerce tech and launch a user-friendly website to blend their online and offline sales. This move not only boosts online sales but also enhances overall efficiency and the customer experience.

  • Rapidly Prototype and Deliver Optimized Digital Products to Customers

Learn from Kodak’s mistake – they initially resisted digital changes and later struggled to catch up. No matter how traditional a company is, the key is to identify the digital products and experiences the targeted customers might want. Let’s say, in the case of a well-established publishing house, they created a user-friendly e-book and audiobook platform to gather customer feedback. This proactive approach will give them a competitive edge in the digital publishing market.

Example of Digital Center of Excellence

Apple, the tech giant we know today with a market value of USD 2.74 trillion, has an interesting backstory. Steve Jobs had a unique idea back in 1979. He offered the tech company Xerox an opportunity to invest in his company Apple before going public. In return, he wanted a tour of Xerox’s research facility called Xerox PARC.

During this visit, Jobs came across groundbreaking technology like the ‘mouse’ and the ‘Graphical User Interface’ (GUI). This encounter completely changed the course of computing history. As a result, Jobs envisioned a future with personal computers that had a user-friendly interface. He handpicked some of the best talent at Apple and formed the Mac team, with himself leading the charge towards this vision. The Mac team became a kind of “Center of Excellence” within Apple, dedicated to revolutionizing the future of computing.

In a similar way, different organizations use various strategies to enhance their value and set up CoE Centers of Excellence or Global Capability Centers (GCCs) to make significant contributions to their headquarters. However, merely establishing a COE or GCC is not enough. Organizations must ensure that these centers are successful. 

Evolving Role of the DCoE in Digital Transformation

It is crucial to consider the costs and timeframes involved when it comes to building a high-performing DCoE. Statistics reveal that companies invest an average of $4700 per hire, and it can take three to eight months for a new employee to reach full productivity. In the realm of DCoE, where assembling a skilled team is paramount, these figures underscore the significance of not only selecting the right DCoE members but also expediting their integration into the organization.

The DCoE is not just a static entity; it can serve as a transitional group that propels a company from being a digital laggard to a digital leader. As a company increases its digital maturity across the organization (through the above-mentioned actions), it typically makes sense to decentralize some of the digital functions. 

Today, businesses are embracing emerging technologies like artificial intelligence, big data analytics, cloud computing, etc. This way, a well-structured Technology Center of Excellence can catalyze an organization’s digital transformation journey. This ensures competitiveness and adaptability in an increasingly digital environment.