Operating Model design for your Automation Center of Excellence

first published on Infosys Consulting Insights

Business leaders have embraced RPA (Robotic Process Automation) technology from the likes of Automation Anywhere, UiPath, Blue Prism, AssistEdge and Pega Robotics as a powerful tool to improve productivity and take cost out of the organization.  Shared Services and BPO Centers where early adopters of this technology as they have an abundance of repetitive deterministic tasks that can be easily automated with RPA solutions. With proven success in the core shared services functions (Finance, Order Management, HR, Procurement, IT, Customer Service) interested in RPA has extended to a wide variety of other business areas. But with success comes a variety of challenges. As I travel around the world talking to business leaders on the topic of automation, there are a number of challenges that just about every large scale enterprise is grappling with.

1.      Automation Strategy – What is the vision, charter, roadmap and measures of success for automation? How to identify attractive automation candidates? How to prioritize and justify automation investments with compelling business case?

2.      Technology Strategy – What is the right automation technology solution? How and when to embrace more advanced automation technologies (assisted automation, chat-bots, OCR, artificial intelligence/machine learning)? How to build a scalable automation architecture?

3.      Governance – What types of governance bodies are required? How should automation investments be funded and who should have what decision rights? What are the new roles and responsibilities?

4.      People Enablement – What kinds of skill sets need to be built in order to support automation? What should be Change Management strategy? How do I manage the people impacts of automation / reskill people for new ways of work?

5.      Operating Model - How to organize around RPA? Should RPA be a business or IT solution? What kind of controls need to be put in place around the technology? 

6.      BOT Development & Support – What are the right development methodology, tools and standards for automation? What do we design for reusability and manage robots as an asset? How to manage and monitor an RPA environment?

Because the barriers to entry for RPA technology are so low individual business units can pilot RPA technology or even build a RPA delivery capability with little or no involvement from IT. Issues emerge when

1. Multiple business units embrace competing RPA technologies
2. The volume of robots reaches a scale that the business can no longer support
3. Changes to the underlying systems break existing automations that IT may or may not be aware of

To address these challenges large enterprises often conclude that they need to establish a Center of Excellence (COE) around automation more broadly or Robotic Process Automation (RPA) specifically. I recommend that enterprises consider Automation technology across the spectrum of work not just RPA technology when establishing an Automation Center of Excellence. See my previous blogpost on Automation Across the Spectrum of Work. 

The internal organizational politics around establishing an Automation Center of Excellence can be fraught with conflict as multiple parties jockey for positioning around the next hot technology. By focusing on a few key objectives it is possible to design an efficient operating model. The following operating model design principles are fairly universal:

1. Avoid Duplication of Effort and Expense – No one wants to waste firm resources by reinventing the wheel. A good COE design will centralize those function/capabilities that can be done once and re-used across the enterprise. 
2. Focus on Time to Market – RPA is all about rapid deployment of non-invasive solutions so it is critical that RPA solutions not get bogged down with an overly burdensome and time consuming process or structure that increases costs
3. Business Agility – In order for the process integrity to be maintained, it is imperative that the business feels ownership of all automations that are created. It is imperative that the business is deciding what and when to automate. 
4. Leverage Economies of Scale Where Possible – There is a minimum viable scale for creating economically viable automations. A free-for-all where everyone in the enterprise is developing RPA solutions is probably not the right answer. 
5. Protect Against Risks – There are a number of risks inherent automation solutions that anyone who develops them should be aware of and mitigate against. 

The basic operating model for an Automation Center of Excellence can be divided into two parts. 

Automation Center of Excellence – The core of the Automation COE are those things that are done once and then applied over and over again. The Automation COE should establish the

• Automation Strategy - Define the framework for how automation opportunities are identified and prioritized. Create the overall automation COE business case as well as provide a business case framework that can be applied to each automation opportunity. Define the program metrics and measure value realization. 
• Technology Solution – Select the automation technology, define tools and standards, manage software licensing, manage vendor relationships, provide the hosting solution, define security standards, and monitor bots in production. 
• Governance – Define governance bodies, define decision making rights, define funding mechanism, define stage gate criteria, and define standards and controls
• People Enablement – Provide technical tool training, provide OCM methodology, tools and templates.
• Operating Model – define the service catalog, provide deliverables templates, define development standards, maintain bot asset inventory.

Scalable Automation Execution Engines – The recurring activity of defining, designing, and delivering automations is horizontally scalable and can either be centralized as part of the Center of Excellence or federated out to multiple delivery centers. The scalable automation execution engines should be responsible for:

• Demand Management- The identification, prioritization, and justification of specific automation solutions.
• BOT Development – The design, build, test, deployment, and stabilization of software robots.  
• BOT Support – Ongoing support for software robots in the production environment including exception handling.
• Organizational Change Management – The organizational change management, resource redeployment, separations, severance, and training associated with process automation introduced by software robots. 

Based on the capabilities described above, there are three basic operating model structures:

Centralized Model – In a Centralized Model all the functions of a COE are performed by a single group made up of personnel from both the business and IT. This model works particularly well under the following circumstances:

• An enterprise is just establishing its’ automation capabilities are there isn’t any existing capacity elsewhere in the organization
• A strong shared services culture and charge back mechanism already exist
• The enterprise is highly centralized
• The automation opportunity is modest (Less than a thousand addressable FTEs)

The benefits of a centralized model include

• Easier to enforce process, policies and standards
• More effective knowledge re-use
• Easier to achieve economies of scale

The drawbacks of a centralized model are:

• If demand for automation exceeds capacity, then resource contention will result in some group’s automations being deprioritized. 
• In a sprawling global organization, it is possible for some businesses to go off on their own and duplicate effort if they aren’t aware of the capabilities within the COE. Automation Evangelism becomes critical in large enterprises. 

Decentralized Model – In the decentralized model all the functions of a COE are replicated multiple times for each business unit. By its’ very nature you aren’t really creating a center of excellence you are creating multiple communities of practice, so COE is probably not the right name for this structure.   Information can be shared between Communities of Practices to encourage standards and leverage common technology but this model is ill advised for a number of reasons:

• It creates duplication of effort and headcount resulting in a higher cost for automation.
• Even the best intended people are prone to standard drift when responsibly are duplicated across organizations.  

Federated Model – In a federated model the Automation Center of Excellence capabilities are centralized within a small single group, but the Scalable Automation Execution Engine capabilities are federated out amongst as many groups as required. The Automation Center of Excellence may also contain an Automation Execution Engine that provides automation delivery capabilities to business units that lack sufficient scale to justify their own stand-alone Automation Execution Engine. The benefits of this model include:

• It is easier to enforce process, policies and standards.
• There is more effective knowledge re-use.
• It is easier to achieve economies of scale.
• Each business unit is able to proceed independently and doesn’t need to prioritize against competing priorities.
• The business units will feel a stronger sense of ownership and engagement over the automation journey as they are accountable for their own execution engine. 

The federated model works best when there is a large globally distributed enterprise with highly decentralized decision making. 

In conclusion, the decision to embrace either a Centralized or Federated Automation Center of Excellence operating model needs to be driven by each organization’s unique circumstances but as long as the operating model is structured properly with clearly defined roles and responsibilities either model can be used to achieve your automation objectives.