Business Transformation is a change management strategy which has the aim to align People, Process and Technology initiatives of a company more closely with its business strategy and vision. In turn this helps to support and innovate new business strategies. For any transformation of a business or business processes innovation is one of the key drivers. Having a strong innovative capacity within the culture of the business can be a the make or brake of a transformation process.
- Transformation – A marked change, as in appearance or character, usually for the better.
- Transformation (n) – The process or result of changing from one appearance, state, or phase to another.
So in business transformation it could be said that transformational change is the process of changing from one ‘look’ to another, or one culture to another.
If visible change has not taken place (both inside and out) then the change is not transformational in nature or form.
Transformation and change is a critical issue for most organizations. Research shows that the failure rate of change programmes at 70-80%, many organizations are struggling.
It implies a holistic process transforming across the business It also implies that this is the only valid strategic process towards achieving your corporate vision or way forward.
When executives say transformation what do they really mean? Often, the word confuses three fundamentally different categories of effort.
The first is operational, or doing what you are currently doing, better, faster, or cheaper. Many companies that are “going digital” fit in this category — they are using new technologies to solve old problems. A big operational change can be jarring and drive real business impact, but it doesn’t fit dictionary definitions of transformation, such as “a marked change in form, nature, or appearance” or “to change (something) completely and usually in a good way.” Sure, costs will be lower, customer satisfaction might go up, but the essence of the company isn’t changing in any material way. And, in a quickly changing world playing an old game better is simply insufficient.
The next category of usage focuses on the operational model. Also called core transformation, this involves doing what you are currently doing in a fundamentally different way. Netflix is an excellent example of this type of effort. Over the last five years Netflix has shifted from sending DVDs through the mail to streaming video content through the Web. It also has shifted from simply distributing other people’s content to investing heavily in the creation of its own content, using its substantial knowledge of customer preferences to maximize the chances that content will connect with an audience. Customers still turn to Netflix to be entertained and to discover new content, but the fundamental way Netflix is solving that problem has changed almost completely.
The final usage, and the one that has the most promise and peril, is strategic. This is transformation with a capital “T” because it involves changing the very essence of a company. Liquid to gas, lead to gold, Apple from computers to consumer gadgets, Google from advertising to driverless cars, Amazon.com from retail to cloud computing, Walgreens from pharmacy retailing to treating chronic illnesses, and so on. Executed successfully, strategic transformation reinvigorates a company’s growth engine. Poor execution leads naysayers to pounce and complain that a company should have “stuck to its knitting.”
Defining what leaders mean when they drop the word transformation matters, because these different classes of efforts need to be measured and managed in vastly different ways. Operational model transformation should change the metrics the company uses to track performance. For Netflix, a DVD-based model requires managing warehouse utilization and physical distribution costs. A streaming model requires managing website uptime and bandwidth costs. If a company is using the same metrics before and after its so-called “transformation” effort, it really hasn’t transformed in any material way. Strategic transformation changes a company’s competitive set. In its core advertising business, Google competes against other content and technology players; its driverless car will competes against manufacturers like General Motors and BMW. Similarly, historically Apple competed against Microsoft, IBM, and Dell; the iPod and iPhone led it to take on new companies like Sony, Nokia, Motorola, and more.
Not all of these efforts are of equal impact. Focusing on “today better” operational efforts does nothing more than create parity with the best executors of yesterday’s model. It is a recipe for short-term survival, not long-term sustainability. Leaders instead should be thinking about how to blend together operational model and strategic transformation to execute what Innosight calls a dual transformation. “Transformation A” strengthens today by reinventing the core operating model. “Transformation B” creates tomorrow’s core business. The efforts should be connected and coordinated through a carefully constructed capabilities link. This is the way that leaders can rise to the existential challenge of disruptive change to own their future, rather than be disrupted by it.
Source: Jennifer Maravillas for HBR
How to measure business transformations?
Transformation a process that enables your business to maintain your customers and outperform your competitors on an ongoing basis.
Transformation relies on implementation of effective market and stay-in-business strategies that attract more profitable customers in selected markets and lower operating costs. The adage – what gets measured gets done, is as true today as it has always been.
Critical Success Factor
(CSF) is an objective for measuring strategic effectiveness. Critical Success Factors (CSF) Factors A plan should be designed and implemented in a way that considers an environment for growth and profits as well as takes into consideration the following typical Critical Success Factors:
- How satisfied are customers today?
- What change is needed to improve their experience?
- What challenges prevent you from delivering that today?
- How would investments in technology improve the experience?
- What customer problems are you looking to solve with your products and services?
- How effectively do your products and services address these needs?
- What data do you need to better understand customer behavior and preferences?
- What customer outcomes do you want to achieve?
Business Transformation = Change Management Strategies
Business Transformation is a change management strategy which has the aim to align People, Process and Technology initiatives of your company more closely with your business strategy and vision. In turn this helps to support and innovate new business strategies.
The flip-side is that organizations which use effective transformational approaches obtain almost 80% more success than those that don’t*
(*research on the use of the BIR in a range of organizations by Business Link and Scottish Enterprise)
You must harness the willingness, motivation, and energy to drive transformation and contribute to the future. As your partner we will assist in building operational energy by helping people understand why the transformation is necessary, giving clear explanations of how things will continue if no action is taken, laying out a strategic plan, and shaping a common goal and vision.
A step-by-step plan for your business transformation will give employees direction as well as engender transparency. Emotional energy comes from inspiring employees. A positive team spirit will be the key to an effective, successful transformation and your company’s new future.
Team ACE is ready to lead you forward in running your business effectively and efficiently using the latest technology. Why are cloud-native applications becoming the most commonplace technological choice for businesses developing new software? Simply put, cloud-based applications are fast, secure and allow for 100% seamless growth. Below, we explore these reasons in-depth.