What is Business Transformation?

 

“It is not the strongest or the most intelligent who will survive but those who can best manage change” by Charles Darwin.

In a world of unrivalled disturbance & market violence, business transformation today spin around the requirement to give rise to new value— to deliver new efficiencies, to undo new opportunities, to lead new growth.

Business Transformation is the process of structurally modifying the systems, people, processes & technology over a whole business or business unit, to attain quantifiable improvements in efficiency, effectiveness & stakeholder satisfaction. It includes planned decisions that have impact on where you’ll grow, how your organization operates & what kinds of performance improvements you can expect.

There are various reasons a business might consider a transformation, for instance, new technologies, low profit & turnover, shifts within the market. It may include changes to the entire organization, or it may involve a change to a particular function, such as HR, IT, or Finance. 

Business transformation helps in surviving with shifts in market environment.

A survey by Gartner exposed that 42 % of CEOs have lately prioritized a business transformation to develop “new-era technology skills & capabilities.” This is because digital advances are leading a fundamental shift in customer expectations. Modern customers choose to do business with organizations that are able to provide them with a smooth, personalized & complete experience. Transformations require you to reevaluate how your enterprise generates value today & in the future. Simply put, all transformations need you to think big. Why? 

Because incremental improvement is not sufficient to win in today’s exponentially disturbed business environment. Your organization needs sustained growth in the face of near constant disruption, and sustained growth needs supple reinvention. It’s not enough to win today. You have to be able to continue to advance in the future.

Need of Business Transformation

• To drive the business in the way of a recently identified strategic goal- Often businesses find that they have a new strategic vital through identifying market or customer needs, or through seeing a disrupter enter the market. To deliver on this they need to step change the business & so transformation in the organisation’s way of working as needed. Establishing new systems can create abrasion within areas if not executed correctly. To make sure positive growth to new organisational goals, an attentive knowing people-first strategy of business transformation must be introduced.

• To keep innovation at the head- The most famous global corporates value innovation as a foundation for their strategies. If we don’t push boundaries & try new things, we wouldn’t have the amazing technology & infrastructure that we see around the world today. Imagine a life without a smartphone or streaming video?

• To cut costs where possible- Businesses using outdated technology could be declining work speed or may cost more than its newer alternative. Lower costs for the future of your company by updating in the areas that can increase productivity & output. You can also see business transformation ppt that is available on our website.Types of Business Transformation

A successful modern business transformation has several types that you should know about. Harvard Business Review describes 3 types of business transformation:

  1. Operational transformation– It means bring changes in the ways you do things to make operations swifter, better, or cheaper, for example digital transformation.

General Motors are a key example of a company that has prosperously gone through an operational business transformation. They overtook their complete approach to IT, hiring more than 10,000 IT professionals to replace outsourcing contractors, in an effort to free up time from IT support & maintenance work, to new development & innovation. The result as yet is 10 times more productivity & 1000 % more data & the transformation is in progress, with the focus now on unlatching the potential of this new operation to uplift their core.

  1. Operational model transformation or Core Transformation- Doing what you’ve been doing but in an entirely new way. It requires a new set of metrics if the organisation has changed. 

The Netflix story is an ideal picture of a core business transformation strategy. They switched their entertainment business model from DVD rental service by mail to an online streaming service. Today, they are one of the most victorious entertainment companies with 182 million subscribers worldwide & have enlarged into original content creation.

  1. Strategic transformation- Strategic business transformation basically changing the essence of the organization to a new focus. It demands a complete review of the company’s competitive set.

Apple illustrates a strategic transformation when on the edge of fainting in the early 1990’s, they underwent change under Steve Jobs ‘s direction to focus on creating beautiful consumer products. And Rest all we know they’ve achieved since.

The nature of the business transformation will differ depending on the business’s goals & strategies. For instance, it may be focused on one of the following: 

  1. Offshoring, Outsourcing, Insourcing
  2. Cost Out
  3. Global Standardization of Processes
  4. Shared Service Centres (IT, Finance, HR, Procurement) 
  5. Post-Acquisition Integration
  6. Supply Chain Optimization

Also see- What are the major steps of Business Transformation?

Understanding Business Transformation’s Strategic Keys

  1. Begin with a strategy-informed ambition– 

A sound strategy serves as the foundation for a wide range of enterprise-wide investment decisions, performance expectations & resource allocations. Organizations that have invested in fluenting their strategy can convert strategic goals into a brave yet realistic transformation goal that can be executed by the organization. These companies have a sound understanding of how their organizations will create deliver & capture value. It helps them more clearly eloquent desired transformation outcomes, from a financial perspective or from an operational perspective. And it helps them adjust elements of transformation strategy based on the ability of the organization to attain those outcomes. 

  1. Lead with capabilities- 

Concentrating on critical capabilities can help deliver greater value & help the organization understand its business transformation goal. Knowing where to start is critical for undoing value through a modern business transformation. Prioritization allows organizations to swiftly spin to address immediate market opportunities. It allows them to build discipline that can help them establish the new trajectory that they’ll need to keep speed with disturbance.

  1. Drive to Value- 

Effectively upfront the value that you expect to attain through business transformation. Observe, measure & track value throughout their transformation. Value should be the thread that links your business strategy & your transformation together. Take time to be explicit about exactly how you intend to create value.

  1. Build in sustainability- 

Real value appears over time, through sustainable change that last. By promoting an adaptive organization that embraces new ways of delivering value, leaders can provide a foundation to assist value post-transformation.

  1. Be Agile and Flexible- 

An agile approach can help deliver swift wins & iterative progress that align with the desired transformation value. And an agile approach plus agile solutions can provide early core benefits that can help fund transformation execution. Another benefit of agility versus a “big bang” delivery approach: greater transparency & visibility into progress—your actual “value capture.” An agile approach also can support your ability to manage complexity & unpredictability, through development processes that are iterative and incremental.

  1. Invest in program talent- 

Assigning a respected & capable business leader is important to establishing the credibility & importance of the transformation to the organization’s strategic goals. Many organizations make the mistake of not freeing up top talent to support the transformation, since that talent is focused on meeting near-term corporate objectives. But business transformation programs mostly require significant investment in business resources to attain the transformation goal, and the return on this investment is often directly proportional to the caliber & dedication of the talent aligned to the transformation. You should keep leaders connected strongly to focused roles. 

Challenges faced by organizations when leading a business transformation

  1. Lack of Clearly Defined Roles: When it’s not certain who is responsible for what.
  2. Failure to Assess Capability: When you don’t know what your team’s capabilities are.
  3. Inconsistency in Communication: When communications are spotty, misdirected or nonexistent.
  4. Inaccuracies in Effort Estimates: When estimations are off, the transformation suffers.
  5. Lack of Momentum to Implement: When it takes increased time to implement the steps of business transformation, momentum fall behind.
  6. Wrong Timing of Implementation: When the best laid plans are impacted by external or internal forces that change the dynamic.

Final Word

Successful Business transformation isn’t just a 21st century buzzword, it’s a strategy that all CEOs globally need to accept. Why? Because business transformation is about intent; identifying what needs to change & strategically update from within in a focused way. With our markets rising & enlarging on a daily basis, prioritizing effectiveness & efficiency in our systems and the employees who use them is most important. Don’t be afraid to try something new with the possibility of modifying the flow of work.

Read More: https://learntransformation.com/business-transformation/

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