How to fund and establish a Salesforce Center of Excellence in enterprise organizations
More and more enterprises draw on Salesforce CoE to leverage their CRM initiatives. Available Salesforce talent has become desperately short.
A lot of enterprise customers didn’t gain their desired ROI with their Salesforce CRM implementation. From my experience, this is related to the structure of these companies. Most of them have a decentralized organizational setup structured around heterogeneous categories (e.g. multi-brand, regional focus, …). Companies today increasingly aim for digital transformation, and this ambition has accelerated even more with the COVID crisis. Salesforce is key for them in this process and covers the typical CRM areas like Campaign, Lead, and Service Management. The heterogeneous setup of those enterprise customers results mostly in multiple Salesforce implementations and projects across various business units and brands. Those implementations typically are stand-alone solutions with business capabilities developed independently without realizing any synergies across the various stakeholders. In a worst-case scenario, the same business processes will be covered multiple times by different Salesforce applications.
As a consequence, this approach results in overall high implementation costs and in ‘silo’-like Salesforce setups — with a lack of efficiency and speed. This reality is a real challenge for digital transformation, particularly with the ambition to have a template-based rollout with an end-to-end scope based on a scalable Salesforce solution.
Is a Center of Excellence the answer for this challenge?
Most of the challenged companies using Salesforce are now at a point where they have successively rolled out the system across different business units of the company and now realize the predicament they are in. Taking this as a starting point, they now consider establishing a Center of Excellence (CoE) to address the problems. Sometimes this is driven by the business side, sometimes by the IT, but almost never by both at once. In my talks with customers, most of them are afraid to establish complex governance structures. They have to justify the costs and have doubts that a CoE can bring the promised results, especially when they see the huge spectrum of needs a CoE is supposed to cover. These typically include, but are not limited to, the following:
- Standards: A set of capabilities as well as development standards and guidelines to ensure design consistency
- CRM & Salesforce Strategy: Co-development & tracking of defined business goals & KPIs
- Coordination: Alignment and orchestration of business and IT responsibilities and requirements
- Best practice & Knowledge Sharing: Evaluation of Salesforce capabilities and sharing of utilization patterns
- Communication: Creation of transparency and keeping all relevant stakeholders informed
- Governance: Control and advice regarding CRM strategy and processes around Salesforce
- Demand Management: Definition of a process to support new Salesforce projects with guidance to accelerate them
In addition and on top of that, the CoE initiative is typically also supposed to drive a broader cultural change and should generate saving potentials for the CRM program at the company, while bringing business and IT closer together.
Considering this extensive list of requirements, it is often difficult to dispel all the doubts surrounding the introduction of a Salesforce CoE, especially if you take into account that CoE visions are driven by the headquarters and not the business units, which typically have the budget for the Salesforce implementation in decentralized setups. The owners of the initiatives have personal goals and targets they need to reach — and from their point of view, alignment and standardization work against that. Therefore, subjectively they have a high incentive to block the funding for a CoE.
To address this issue, I would suggest a stepwise introduction of a Salesforce CoE. A CoE should focus in the first phase on standardization and governance — especially in an enterprise environment. Salesforce provides a wealth of possibilities to design, distribute and roll out a technical solution to the problem of streamlining business processes — even in complex Multi-Org setups. This allows business to focus on the more advanced issues and frees up IT to address the task of implementing essentially the same solution multiple times (maybe just in different flavors). On top of that, a CoE should provide clear boundaries: What is our focus? What is beyond scope? How do we develop and distribute our solution? Which attributes define our customer and how can we ensure this view is consistent across all our implementations? This is more than enough work for an initial first phase.
The most important question for me — and I always stress this — is: How much responsibility do you want to shift to HQ? And what degree of centralization is feasible in your organization? Both questions will significantly influence the setup and the funding of a Center of Excellence.
How to fund a CoE in Enterprise organizations?
There is no blueprint on how to fund and start a CoE. One customer recently asked me: “How do you slice a CoE?” — My answer was: In an ideal world, you would do it best based on capabilities you would like to cover. For example, a CRM CoE should cover all touch points a company has with its customers. But in bigger enterprises this introduces a lot of multidimensionality as they have tones of legacy systems and processes. I would recommend starting with a CoE that is technology focused — so in this case, a Salesforce CoE. This also reduces a lot of complexity in answering the question which stakeholders are and are not in the CoE.
I had one customer who really took turning around CRM seriously and stopped more or less all of their Salesforce implementation activities midway. A very hard decision causing a lot of effort and conflicts within the organization, but the top management believed in standardization. They cut the CRM budgets from the business units and shifted the responsibility to the HQ. After that, they established a unified CRM governance model and developed a CRM strategy — with the goal to provide as much standardization as possible in line with what was needed. This brave approach ultimately proved extremely successful. The company was able to cut back drastically the costs for the whole CRM program and accelerate the Salesforce rollout at the business units. Their CoE is now in the position to provide operational services — a kind of “CRM-as-a-service”, and serve the business units with e.g. standardized campaigns or analytics.
A huge benefit of this approach is a centralization and better utilization of the available Salesforce talent. Salesforce adoption in the field has grown significantly, with double digits in certain key metrics over the last decade. Even with their very good education program (“Trailblazers”) there is a lack in the supply of fresh talent — and even enterprise companies need to think how they can utilize their talent pool in the most efficient way. Parker Harris (Co-Founder Salesforce) said at the Dreamforce 2021 Architect Keynote:
For each Salesforce architect around in the ecosystem there is a gap of another 10. (…) What that means there’s a hell of a lot of jobs there.
Putting the talents into a more central position improve the overall effectiveness and the talents can pull new talents with them as it much easier to share knowledge within the company. To have Salesforce experts which can drive implementations and identify as well as evaluate upcoming trends will be key for organizations. They’re in a competition for those talents. Having a clear structure in place to promote them will be beneficiary.
Is this a blueprint for everybody? No — there could be different reasons why this radical approach didn’t pay of — e.g., with a lack of commitment by the upper management and potential sponsors. They do not relish a hard fight with half the company to bring about change. Therefore, they seek for alternatives. That could be smart funding and centralization based on certain aspects of the Salesforce platform. Two potential approaches I recently saw in practice and made good success with them:
Salesforce License and Product Management
A softer way to enforce governance is for HQ to take over control of the Salesforce Product and/or License Management, thus getting into a position where they are able to get a complete overview of the current implementations from a central perspective. Which Salesforce products are currently implemented and in use? Which products are ordered? What is the scope of the projects? What are the use-cases for the ordered products? (e.g., Dataorama, Interaction Studio,…).
Being in a high-level position where they can evaluate the answers to such questions, a CoE/Governance Team can assume the role of a trusted advisor. Out of that, it is possible for them to indirectly steer the CRM activities and provide assistance, especially if the central team additionally takes over procurement of licenses for the whole company. Over time, the team thus gets a holistic overview of the current covered business processes and capabilities. This is a great starting point to encourage and establish more and more standardization by bringing stakeholders together, creating common exchange platforms and sharing best practices.
Communities to enforce a stakeholder alignment
A second option also focuses on promoting exchange — but directly instead of indirectly with the Salesforce Product Management. In a first step, the company should identify the current focus areas of their CRM implementation and bring all stakeholders of a process together in a common community/working group. Within that group, you can then identify potential synergies and get the buy-in of everybody where it is hard to argue not to realize them. A governance working group above them can align all activities — and act like a pre-CoE without having a robust mandate and spread the success stories within the company.
Giving an example — I worked recently with a customer who had multiple Marketing Cloud implementations in a number of locations across the globe. Within a founded campaign community, we identified multiple customer journeys that could be transferred from one business unit to another (with the new Salesforce Package Manager faster than ever). We generated synergies within a very short space of time, realized savings and gained a lot of speed in rolling out existing and new use-cases. This success story brought the CoE into a strong position politically. They had proved their worth and now are in a position to fund more communities and establish their CoE with budget and resources centrally.
What are the benefits after funding a CoE?
Taken together, all three ways of introducing a CoE ultimately result in three main benefits: reduced IT project spend, reduced run costs and improved business results. Let’s have a closer look:
With the focus on standardization, a CoE helps to increase the reusability of technical artifacts and can ensure a higher degree of automation (e.g. in testing). Both also help reduce the overall operation costs — as standardization does not require companies to block resources for single special purpose applications. As a consequence, this will increase the efficiency of the IT support.
Another positive side effect: The business side has more headroom to focus on functional enhancements, further driving integration and working on the famous 360° customer view. A CoE enables a company to get into the position to work on innovations — and utilizing the company’s Salesforce talent to the fullest extent is key for this exercise. Being faster with the digital transformation could give them an advantage compered to their competitors.
In addition, a CoE-focused governance also helps in the initial phase of a Salesforce implementation. Understood as stewards for future Salesforce rollouts, they can provide guidance in terms of project setup, license management, and participation in the company’s best practices. This can help to improve the overall quality and can reduce unnecessary complexity (simple example: by building a community on the Experience Cloud instead custom on Heroku).
All in all, the good news is that even when taking the first tiny steps with a CoE benefits can be created — with these first steps subsequently helping improve the overall funding of the CoE and giving opportunities to scale up.
Conclusion
Funding a (Salesforce) Center of Excellence is never easy. I never experienced that in practice. Investing in governance will be always questioned in decentralized organizations. How will our investments pay off? What are the benefits? Having to wait for the right moment to fund a CoE complicates the decision even more. Path-dependency is a real issue. Returning from a decentralized to a centralized approach becomes the more challenging the longer and the firmer a decentralized structure is already in place (especially when established for a certain timeframe). The costs for a transformation will growth over the time. Recognizing the current situation and acting fast and decisively is key to driving the digital transformation — a well funded and established Salesforce CoE can be an important puzzle piece on this journey to implement a scalable CRM solution.
