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“Chaos in the midst of chaos isn’t funny, but chaos in the midst of order is” (Steve Martin)

Before starting to answer the question, it makes sense to have a common understanding on what we mean with a “Cloud Center of Excellence“.  The concept was first pitched by Steve Orban from AWS in 2016.  At that time, it was part of a series of best practices to support a cloud journey.  In fact, it was part 5 (out of 7) and it was an extension of the concept of bringing DevOps to the enterprise.  Since that time, a lot has happened.  The cloud journey is often blurred with a broader transformation journey. Or as we like to call it at 45 Degrees: the journey to Infinite Business.  The original concept of a “cloud” center of excellence has expanded to what would probably more accurately be called a “transformation” center of excellence. 

Back to the original question: Why would you need a cloud/transformation center of excellence?

The best way to answer that question in 2 sentences comes from the American philosopher David Sprangler:

“We live in two worlds – order and chaos. In the world of order, we plan, reflect, and think about what to do next. In the world of chaos, things happen, we get things done, yet unpredictability persists. In one world, we like to think we are in control. In the other, we mingle together with increasing complexity, conflict, and uncertainty.”

Getting things done

Anybody remembers “Blockbuster”?  OK, it is a bit USA oriented …  But very relevant to understand the point … Blockbuster was THE market leader in the video rental business.  In 2000, a small struggling company called Netflix knocked on their door … Blockbuster kicked them out laughing at them.  10 years later, Blockbuster files for bankruptcy.  They had a very structured, healthy business of VHS rentals in brick and mortar shops.  And failed to be agile and adapt to the changing market situation.

Keeping a business competitive (infinite business) is a real challenge.  Even for real large enterprises like the ones in the Fortune 500.  Every year, between 20 and 50 companies drop out of the list.  Technology, especially cloud technology, has a lot to do with that.  Technology allows start-ups to enter in markets which were “locked down” due to high upfront investment costs.  Cloud allows to experiment with no or very limited costs.  It is available, whenever you want to start the experiment. 

Netflix, Spotify, and others have a culture of experimentation at the core of their company culture.  More and more “traditional enterprises” adopt this way of working. The cloud is often an enabler to go that way.  Large enterprises often see some transformation is already happening in some corners of the organisation.  The challenge is they need to find a way to scale these isolated gems of innovation and transformation to the whole enterprise. And that is why a framework like a “center of excellence” comes into the spotlights.

Framing the innovation

The challenge for large enterprises is the scalability of innovation.  Innovation in isolation does not work.  Mainly in the finance sector some early ideas for transformation were to setup a start-up within the big enterprise …  While it is probably a better idea compared to isolated, random experimentation, it will never trigger the big enterprise scale transformation.  That is exactly where a center of excellence approach comes in.  It offers a framework to bring basic structure without hindering innovation.  Quite the opposite.  When properly done, it will be a catalyst for innovation.

Who “owns” the center of excellence?

That is a simple question to answer: the customer owns the center of excellence.

Always.  We are talking about a framework that drives the future of the company.  This is not the same as “outsourcing your on premise datacenter” the way it used to be.  Of course, you can use managed services for the operations of your cloud infrastructure, or part of it.  But the ownership of the framework must be with the customer.  The customer can use (and probably must use) external help to run it or set it up.

Where to start?

That is different from customer to customer.  Before Covid-19, we recommended to start by creating a culture of experimentation.  By doing innovation and ideation workshops.  And by doing proof of concepts.  This is still a critical step for an enterprise wide transformation.  But things changed dramatically in the middle of March 2020.  Some CIO told me: “I had to do things over the weekend for which I would have been fired if I did them in February 2020 …”.  That is again where a center of excellence framework gives the guidance needed to move forward.  What exactly have you done?  And how do we make sure it becomes a solid foundation?

What about “smaller size companies”?

For a large and complex enterprise, a center of excellence is a must and a no brainer.  For smaller companies, the answer is less black and white.  If the IT division is one person, who happens to be also the CFO, you do not need a center of excellence.  We do however see smaller size companies that are market disruptors in one way or the other.  And they do benefit from a structured approach to that disruption.  The way we see a center of excellence at 45 Degrees is a very scalable approach.

In summary

A center of excellence approach allows to put structure behind an enterprise wide transformation which is needed to scale isolated initiatives to a company wide level.  While doing so it will be a catalyst for innovation.