Combining the power of Scaled Agile and Cloud Centers of Excellence in Digital Transformation

In today’s digitally-disrupted landscape, we are seeing an accelerated paradigm shift in all industry sectors, where both the incumbents and the new arrivals tend to form focused divisions in their organization and team up their best experts and methodologists to serve as a powerhouse to drive the internal transformation, support growth and lead to sustainment of their future state digital self.

The concept of Center of Excellence (CoE) is nothing new as since the dawn of civilization we have records of guilds and unions of trades in all regions and reigns, focused on sharing their expertise, governing their interactions with their clients and to promote the best practices known in their era.

The new movements towards lean manufacturing and process optimization during the 1960s revived and energized Centers of Excellence in several industrial sectors, and the decades that followed, raised their relevancy and importance for organizations’ survival and growth in the turbulent and highly competitive environment that we have today.

The Lean-Agile Center of Excellence (LACE) and Cloud Center of Excellence are two deeply integrated, key success factors in Digital Transformations of enterprises.

In this article we want to take a closer look at LACE and CCoE, to discuss how they come together to serve as the definitive key differentiator for a successful, well-structured, and sustainable transformation into a Digital Enterprise and a growing and thriving future state.

But first, let’s take a step back and look at the fundamentals of Centers of Excellence:

What is a Center of Excellence (CoE)?

An organization forms a Center of Excellence (CoE) to respond to an existing internal shortage of capabilities (the combination of experience and expertise), and to establish a center point for promoting best practices and governing and guiding teams active in those domains.

The members of a CoE are selected from the most experienced and trained professionals in the subject matter, within the organization to mentor, train, coach and assist in developing the needed in-house knowledge and required skill sets.

This also aligns with the vital essence of continuous learning and evolutionary improvement in the organization.

A CoE is responsible for a wide range of exploratory, supportive, and governing activities, including:

• Identification and mapping of existing practices, processes, and tools to understand their level of maturity, relevancy to organization’s strategic plans and their fitness for supporting the future state.
• Identification of required new practices, processes, and tools – aka gaps - as needed during the transformation phases and in the future state of the organization.
• Creating the evolutionary improvement steps and the roadmap, laying out the path for optimization and improvement of practices and processes and training and mentoring the new model across the teams.
• Identification and configuration of metrics that will help the teams and management create and maintain the required line-of-sight into the health and quality of their serving pipelines and their aggregate impact on the organization.
• Establishing the guardrails and governance policies to help the teams properly plan and pace their evolutionary change within the needed optimized bandwidths.

A CoE must be able to self-organize and play a leading role compared to existing Guilds or Communities-of-Practice (CoP) and even any Focus Groups that specialize in any relevant domain that the CoE need to cover.

To form up a CoE, the organization can use available in-house resources, hire new talents, hire temporary (contract) professionals, or use a combination of these options.

Of course, there would be pros and cons to be considered with each approach:

• In-house resourcing:
  • Pros: These people are already familiar with the existing processes, tools, and people. It is easier for them to communicate internally and have been close to – and suffered from - the existing pain-points.
  • Cons: They have been part of the system and are not likely to be able to use fresh perspectives in identifying problems that are deeply rooted. Their most recent experience is limited to what the organization has to offer which may not be sufficient to drive a major change towards a significantly improved future state.
• Hiring new talents:
  • Pros: They come with fresh perspectives and have a higher likeliness to notice and identify hidden issues that have become an integral part of the status quo. They may also come with a broad range of prior exposures to a variety of problems in different organizations, which would have provided them with the expertise needed to address a wide range of issues.
  • Cons: Experienced resources are not easy to find and when found they would have higher compensation expectations. They are also new to the organization, and as a result, unfamiliar with the existing processes, tools, or the people. This would mean they need time to ramp up and must establish rapport with and gain the respect and collaboration of the existing teams.
• Contract resourcing:
  • Pros: They are easier to find compared to full-time hired new talents, as there is expected to be a pool of those resources in the market. The nature of contract work means that over the past several years, they have worked with several organizations and had received exposure to a much wider variety of challenges and solutions than any in-house employee can ever wish to obtain.
  • Cons: They come at a higher cost compared to all other options. Their short-term engagement also means that once their contract is ended (due to their interest in pursuing other initiatives elsewhere or organization running out of funding for contract work), they will leave with their internally gained knowledge and deprive the organization from its future benefits.
• Hybrid resourcing:
  • Pros: When an organization tries to train and mentor in-house resources and hire new talent to compliment the in-house power, it saves money and keeps the investments that is made on the resources. When the organization also brings in contractors to serve as highly skilled and seasoned consultants to mentor the in-house teams, it is creating a great knowledge transfer opportunity as well.
  • Cons: Due to the immediate difference in levels of expertise and knowledge, the logistics and planning of the needed mentorship and consultation work is more complex than the prior models. Care must be given not to leave behind the in-house team members to save time on training them!

Now that we have some insights on what a CoE is, let’s look at the Lean-Agile Center of Excellent and the Cloud Center of Excellence, and how they can collaboratively drive a successful digital transformation and sustaining the future digital enterprise.

What is a Lean-Agile Center of Excellence (LACE)?

LACE is a special implementation of the generally understood Agile Center of Excellence (ACE), which is a CoE that has the mission of implementing the Scaled Agile Framework (SAFe®) way of working in the enterprise.

SAFe® is the most adopted – and most successful – enterprise agile scaling framework which is in use by more than 70% of the Fortune 500 companies and over 20,000 organizations around the globe with more than 1,000,000 certified practitioners, many of which members of their organizations’ LACE.

LACE serves as an important driver of adopting Lean-Agile practices into all corporate activities following the cultural aspect of the ever-improving service delivery towards creation of the desired business outcomes.

Lean-Agile practices are the combination of the Lean mindset (reducing wasteful activities to raise efficiency) and Agile methodology (using self-organizing teams working in short delivery cycles to quickly respond to the market changes with the closest possible product that customers would find valuable, and using the feedback received from the market to decide on the next best deliverables).

Neither Lean nor Agile can automatically scale from a handful of teams all the way up to the enterprise portfolio level, without a well-thought, time-tested, and comprehensive framework to connect the corporate strategic portfolio all the way down to the production teams’ delivery roadmaps and synchronize and orchestrate teams in creating and delivering the products and services that will aggregate back up to create the best “Business Outcome” for the organization.

Scaled Agile Framework (SAFe®) as the name intuitively suggests, is designed to do just that.

According to SAFe®, the LACE is one of the key elements in creating the ‘sufficiently powerful guiding coalition’ required for the organizational change. As a pre-requisite, it needs executives, managers, and other leaders to receive the needed training and to have certified change agents joining the effort so the LACE can be chartered and sourced properly. 

LACE needs a group of dedicated people, free from daily services in the pipelines, fully focused on their role, so they can foster and promote true organizational change and to ensure organization would follow a relentless pursuit of improvement.

While LACE would not be able to function effectively without direct executive support, we cannot realistically expect them to fully dedicate themselves to the work. To cover this gap, an appointed executive can become the champion of change and can assign delegates with the required level of authority to make the needed decisions close to the areas they are needed, and only to engage the higher management levels when the impact of the decisions would go across the enterprise or be expected to bounce against certain guardrails.

While there is no formula to calculate the right size of the team serving the LACE, experience shows they are quite proportionate to the size of their organization. Some start with a small team, composed of an executive and some senior managers and then expand into a larger group as the training and onboarding of resources continues.

As the LACE’s domain of impact expands across the siloes and levels, they may decide to adopt a centralized, decentralized or hub-and-spoke topology for its implementation and operationalization:

• Centralized modelis used when the organization is not large and can cover all its functions under one portfolio, and its Value Streams and their serving Agile Release Trains (ARTs) are provided for through one centralized budget. (An ART is the logical grouping of multiple agile teams that are in the service of a specific Development Value Stream. Organizations sell their products and services through Operational Value Streams. The sequence of people, tools and processes that create those products and services, and even the tools needed to provision and sell them to company’s customers are considered the Development Value Streams).
• Decentralizedmodel is suitable when several independent business units with different business contexts, each with their own SAFe portfolios exist and have their own budgeting to cover for their LACE responsibilities.
• Hub-and-Spoke modelis best for large organizations where an enterprise LACE office supports and monitors the implementation and operationalization of its responsibilities through local LACE offices in each silo or group, serving as the synchronization and collaboration center and acting as the bi-directional visualization conduit between the portfolios and ARTs.

A LACE is generally responsible for

• Establishing an organization-wide understanding of the reasons behind the change that is initiated, and the target state that the enterprise is moving towards.
• Providing the needed training for the executives, managers, and team members as per their role in the LACE.
• Creating the Enterprise Level (Portfolio) Roadmapand working with the teams in developing the implementation plan and the corresponding work items (aka backlogs) that will manifest that.
• Leading the Value Stream Mappingefforts across the enterprise and inside the silos and working with the leaders to make the modifications needed for the future state of the organization. It is notable that not all changes have to happen in short-term. The complex optimizations would need to be carefully planned and incrementally implemented so they would not disrupt the organization’s ability to deliver valuable services and products and generate the desired business outcomes during the transformation.
• Establishing the Agile Release Trains (ARTs)in for each Value Stream under a certain Program.
• Scheduling, facilitating, and coaching main events such as Program Increment (PI) Planning PI Planning is the large planning event for an ART, during which a set of objectives – in alignment with the corporate strategic portfolio – are brough to the teams by the Program management, to be achieved during the next set of Sprints(usually four two-week Sprints). In addition to the Objectives, Program Management also brings a set of large deliverables – called Features – which cover the pieces that need to come together to make those objectives obtained.
• Identifying and establishing the supporting KPIsand their aggregate OKRs, to help the teams navigate through the change and using them to monitor the progress and visualize it across the organization.
• Planning and hosting a wide array of best practices workshops using in-house expertise and external – guest – speakers.
• Fostering the cultural change and sustainment towards continuous improvement in everything the organization does.

Regardless of LACE existing as an independent unit or part of Agile PMO, it should be able to support and champion all those responsibilities and act as the guiding light, source of energy and live guardrail of best Scaled Agile practices during the transformation and as part of the organizations future state of being.

Kanban boards and Backlogs are used by LACE to properly visualize and prioritize the transformation work items and to monitor and track the progress at any point in time.

LACE needs to lay the roadmap for incremental and evolutionary transformation of the organization. The older and more traditional an organization, the more delicate and smart-paced the changes need to be planned for. Trying to remove all the major organizational impediments in one shot at the start will only result in chaos and disruption and would derail the entire effort. That is why LACE looks into establishing credibility and buy-in by the teams through incrementally achieved small wins to boost the morale and use the experience gained by the participating teams to push for more transformational success.

What is a Cloud Center of Excellence (CCoE)?

Like LACE, a CCoE is a multi-disciplinary function, which gathers experts from a range of disciplines across the business. Its main purpose is to champion the cloudified transformation and drive forward on a secure and compliant path for cloud consumption at the enterprise level.

It is important not to think of a CCoE as a Control Tower but as an organizational enabler to assist with adoption of cloud platforms and the needed migratory works to tap into the service capacity elasticity and the pay-as-you-go costing model of cloud computing.

CCoE puts the focus on the organization’s internal requirements and fosters building of well-architected solutions that will enable delivery teams to build more effectively in the cloud.

CCoE negotiates with IT functions in the organization to reduce central control in return for higher automation abilities, improved consistency, reduction in administrative and maintenance workloads and more R&D capabilities.

CCoE raises the Business Agility and reduces the Time-to-Market through the deployment speed, low cost, scalability, and cost optimization of cloud services, alongside their low-latency and global reach.

CCoE should not have day-to-day operational responsibilities, nor should it ever be run as a project management office. It should not be outsourced as it is vital for the organization to maintain its gained expertise over time.

CCoE’s main services can be summarized as:

• Cloud Consultation: working with the teams in understanding what they need to do, how to best architect the solutions using cloud services, select the most suitable cloud service provider and manage the relationship between the teams and vendors. Cloud Platform Engineering andDelivery Platform falls under this category. It also covers architectural design, landing zones, DevSecOps tooling, shared services, resource management and OKR/KPI structures.  
• Cloud Governance: standardizing deployments and operational procedures to align with security, compliance, and service management policies, and enforcing best practices and manage both the cost and the risk of adopting a new service model. Guardrails and Audits fall under this category.
• Cloud Evangelization: training, mentoring, and assisting the teams in raising their cloud skills and knowledge across the enterprise while serving as a repository of cloud-native code and service automation scripts. It also promotes and encourages innovation using the intrinsic cost-optimized R&D capability of cloud services.

For CCoE to succeed: 

• It needs to receive the proper level of executive support and have been trusted with the needed decision making authority to influence long lasting and sustainable change in the enterprise.
• Its mission and mandate should provide it with adequate priority and power to break through unnecessary delays and line-ups in the organization.
• It must establish the needed communication channels, distributing clear and transparent details about the plans, activities, processes, and status checks in alignment to the strategic steering of organization’s leadership in technology and business.
• It must be based on a set of expected business outcomes and address existing pain points and enable future growth, to create teams’ buy-in and sense of ownership in each organizational area.
• It should follow an incremental approach, targeting quick wins to establish a baseline which both boosts teams’ morale and gets them to practice with a smaller scale solution, ramping up towards more complex, cross-silo changes.
• It needs to implement the key cloud adoption elements quickly and efficiently (i.e., the landing zones, Route-to-Live, control frameworks, shared tools, operational models etc.), so the driving force can be concentrated on enabling the teams in realizing the value of cloud service elasticity, availability, and global reach.
• Teams – once trained and onboarded – should become responsible in managing their own cloud costs and CCoE only should only have to supervise and promote the cloud cost optimization practices. This is done by using in-house and cloud service providers wide variety of cost optimization, right-sizing, and load monitoring tools.
• It should be able to adopt the proper topology (centralized, decentralized and hub-and-spoke) based on the size, composition, and complexity of the organization’s structure.
• It should promote innovation in parallel to the governance policies to avoid choking exploratory work by the teams in response to new opportunities and market changes, and at the same time to avoid exposing the organization to unnecessary risk of data or functionality loss.
• It should revisit and revise the guardrails in proper cycles to adjust them based on the cloud maturity level of the organization and the market conditions, so they would not turn into impediment against achieving the desired business outcomes, while still being viable in keeping the cloud activities on an acceptable path from both economical and compliance perspectives.
• It should establish feedback cycles with the internal clients (development teams) to continuously improve on their experience using the key elements (e.g., landing zones, tools, frameworks etc.) as well as monitoring the experience quality of the external customers.
• It should be able to apply the new architectural models to hybrid (on-premises and cloud) and cloud-native solution building and avoid the trap of falling back to traditional standards and processes which may no longer apply or serve as best practices.
• It must pragmatically cater to a variety of cloud maturity levels among the teams in the organization. In real world, every team may have a different maturity level and need a different level and composition of support and guidance to ramp up towards higher cloud skill and expertise levels.
• It must establish the needed visualization and metrics on the performance, progress, and target achievements, and generate the needed transparency across the organization and in the verticals to provide a live health check structure capable of detecting deviations and problems as the appear and to initiate corrective actions as needed.

The Combined power of LACE and CCoE

LACE and CCoE share many fundamental characteristics as they both:

• Need executive champions to provide unwavering support.
• Require the needed decision-making power to cut through the unnecessary bureaucracy.
• Are consisted of bold, savvy, and seasoned experts that are energized to plan, pace and push for deep-rooted organizational change.
• Follow a “start small and incrementally expand” approach to build a good track record of quick wins and get the teams to gain experience, feel ownership and build up on that.
• Establish the needed transparency and line-of-sight into the current state and the progress of transformation across the enterprise.
• Have defined clear mandates and target business outcomes to achieve in alignment to the organization’s strategic portfolio.
• Promote best practices, provide training, and follow a culture of continuous learning and improvement.
• Understand that teams have different baselines of maturity at the beginning of the transformation journey which require different levels of training and mentorship to succeed.

Their core interdependencies allow for their combined power to raise the organization’s capability to transform and to thrive in its digital future state:

• They complimenteach other, as Scaled Agile establishes the flow of understanding and scope between the strategic decisions and teamwork implementing them, while Cloud services provide the teams with a rapid, scalable, globally accessible, secure, and available platform to produce better products and services and sustain their operationalized state.
• They supporteach other, as Scaled Agile promotes and emphasizes Continuous Exploration, Continuous Integration and Continuous Deployment and creating short feedback cycles for DevSecOps teams, while Cloud services provide the ability to perform cost-optimized, scalable exploratory work and seamless integration and deployment of products and services into the production environment.
• They amplifyeach other, as Scaled Agile established and orchestrate the Agile Release Trains  around the Value Delivery Pipelines to focus their power in creating products and services in alignment to the desired business outcome, while Cloud services democratize the required development and computational power to reduce the time-to-market and to monitor customers’ interaction with the newly deployed products and service and produce live - short - feedback cycles and enhance them through existing cloud-based analytical services to generate insights that will be used to fine tune the next incremental change to match the most recent demand in the market.
• They are deeplyintegrated, as Scaled Agile provides the process for the DevSecOps team inside the Agile Release Trains to follow in their incremental, synchronize approach to value delivery across the organization and verticals while Cloud services provide them with the technology solution for these teams based on Cloud-Nativity design and implementation.

The following reviews a few scenarios for LACE and CCoE co-existence and integrated collaboration:

- Existing LACE, adding CCoE later:

In organizations where we have a LACE already active and functioning, adding a CCoE becomes an enterprise initiative at Scaled Agile Portfolio level which will initiate the focus team required and then cascade down to the involved Programs (and their ARTs) in the form of Portfolio backlog items, for all the transformation work that is going to be implemented.

This as a Portfolio EPIC, categorized as an “Enabler” initiative. An executive leader will be appointed as the champion for this EPIC, and it will receive the needed Lean Budget to start and implement the first few key elements (as far as the budgetary window covers the activities during the existing and / or next funding cycle).

If the leadership deems it necessary to create a business case for creation of CCoE, then a preliminary (investigative) EPIC will be defined and managed by the appointed executive and his / her management team to assess the current state of the organization, create comparative analysis between the existing costing model and the investment needed to sustain the current service levels and to stay competitive in the market, using the status quo – non-cloudified approach – versus migrating existing – relevant – workloads, and covering the needed expansions as cloud-native solutions as demanded by the Value Streams.

As we discussed before, CCoE is comprised of selected experts dedicated to the cause, which may follow a centralized, decentralized or hub-and-spoke structure. The executive champion will work with the senior management team to layout the plan for the steps in implementing the key elements and to shape the 3 main functions of CCoE. After that, they will schedule the required training and onboarding of the CCoE staff and work with the enterprise architecture team to identify the quick wins for the Value Streams (that are already identified by the LACE) and create the roadmap with multi-stage implementation horizons.

The cloudified transformation work will then be communicated to the Program Committees (responsible for their respective Agile Release Trains) for translation into Program level “Features” that will the be planned for incremental implementation during the upcoming Program Increments (PIs) by the teams (in alignment with the CCoE Roadmap).

- Partially implemented LACE, adding CCoE later:

In organizations where the adoption of the Scaled Agile Framework (SAFe®) is still in progress and all relevant areas are not yet fully transformed, it is recommended to create a skeleton Portfolio structure in place with a minimalistic backlog of EPICs and appoint the executive champion, the funding and then initiate the CCoE with focus on establishing the transformative cloudification on the  Programs that are already created and have functioning ARTs serving their Value Streams. This approach:

1. Provides the executive leadership with the minimum line-of-sight to guide the steering of CCoE.
2. Provides the CCoE with the needed executive support and funding to push forward.
3. Benefits from the information that exists on the Value Streams already identified and being served by those Programs.
4. Takes advantage of the existing synchronized delivery power of the ARTs serving those Value Streams.

As the Scaled Agile adoption proceeds and more Value Streams are identified, and ARTs are formed, CCoE would want to include the cloudified transformation work into their scope of work and expand the coverage.

- Existing CCoE, Adding LACE later:

This would be the standard Scaled Agile adoption process as can be initiated by any organization using any kind of technology. The existence of a successful CCoE means that the ARTs are receiving the benefits of Cloud services and can enjoy running cost-optimized innovation cycles as part of the Continuous Exploration cycle of DevSecOps teams.

- Adding both LACE and CCoE together:

Since adoption of Scaled Agile facilitates establishing the Enterprise Portfolio, identification of Value Streams, forming the teams around them and promoting a culture of continuous learning and improvement, it is highly recommended to allow for LACE to start before CCoE and have the needed time to implement the minimalistic Portfolio structure and expand to at least one Program and ART as the first client of the CCoE in the Cloudified transformation.

Conclusion

As a growing number of organizations are combining their Scaled Agile transformation with Cloudification of their pipelines, we continue to see a rising number of successful dual transformation case studies in several market sectors.

McKinsey and Co estimates that by 2030, the value of cost-optimization, risk reduction, digitization, innovation, reduction in time-to-market and hyper-scalability of Cloudified use cases for the Fortune 500 companies alone would exceed $1 trillion. Gartner predicts that the annual growth in cloud adoption will continue to exceed 20% annually.

The combined power of Cloud and 5G service providers are already expanding fast in several market sectors, including Autonomous vehicles, Field Robotics, Live Telemetry, AR/VR on the go, and more.

The rising acceleration of cloudified transformation can only succeed with properly structured, mature, and strong processes that would allow the technology teams to maximize the benefits of cloud as part an enterprise-level scaled and well-synchronized short delivery and feed-back cycles that are fully aligned with the organizations’ strategic portfolios.

This requires the combined forces of LACE and CCoE to serve as the driving force for success digital transformation and sustainment and growth of the future state digital enterprises.