Introduction to Business Transformation

Written By: Eric Kimberling
Date: October 2, 2021

With the rapid change witnessed in today’s world of business, several impacting factors are pushing the business toward transformation, which is becoming a very critical component to success. This blog will answer what exactly is business transformation and how to apply that concept to your organization.

Today's organizations are subjected to various factors, forcing them to change very quickly in many ways. These influencers can be macro-economic events, societal changes, pandemics, market changes, or there can be opportunistic changes. Therefore, it is fair to associate a not changing organization to probably a dying one, which spurs most organizations to make a decision and prepare necessary plans to ensure that their business transformation will enable their business and help them grow.

Strategy and Business Model

When organizations are faced with change, before undergoing business transformation, they need to think about the strategy and business model. They need to check if your strategy and business model is future-proof, and what will help realize the business growth.

Organizations follow two major types of strategies, a forced and reactive way of change, and an opportunistic growth-centered strategy and business model. Whether it is reactive or proactive, you need to ready a business transformation strategy and business model that supports that.

Many organizations realize they can improve their profitability by moving to a strategy or business model that focuses on standard operations and common operating procedures throughout the organization, or by becoming more customer-centric.

This is done by, for example, visualizing how to improve customer service information providing, speeding the service, realizing how to sell more, and ensure a positive employee experience. You need to look at your overall strategy and business model, which, eventually, will make the foundation for your business transformation strategy.

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Operating Model

Once a clear strategy is drawn and a high-level business model is envisaged, the next step in the business transformation is to dig deeper and start to define an operating model. Henceforth, in the future state, the organization will be enabled to deliver a better customer experience. However, with that said, how is the organization going to drive some of these cost efficiencies that we may have identified as part of our strategy going forward?

The operating model might leverage some of the strengths you currently have. But it will also mitigate some of the weaknesses and ideally take advantage of some best practices that you have not considered yet, thus provide you with growth opportunities, a new market, or better customer experiences. The key is to ensure that your operating model aligns with your overall strategy and business model and that you have defined your current state and goals, and what your business transformation will accomplish.

Organizational Strategy

People are the other side of the equation you must think about during your business transformation. You need to look at the organization itself, its design, its culture, and the strengths and weaknesses within those two dimensions.

Another component is the whole talent management side, whether the personnel are suitable and have the right skill sets, or require other skills for tomorrow’s needs. The whole organizational assessment is a critical part of a business transformation.

When clients are going through a business transformation, for example, we carry out a two-prong approach to identifying the organization today, where the pitfalls and opportunities lie and need improvement. That assessment tool is focused on understanding the culture today versus the future needs. It also ensures that we have identified potential ways to improve the organization. It is very important to recognize that the organizational strategy is one of the most important parts of any business transformation.

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Technology Strategy

Today's business transformations typically entail a sort of technology enablement. It requires new technology to allow the business process improvements. It is pretty rare to encounter business transformations that happen without a technological stream within. Once we have addressed the personnel and process aspects, we need to define the technology strategy, the systems in place and whether they are effective, the gaps, the deficiencies, and the systems in the marketplace that might help to enable a business transformation.

Therefore, to improve efficiency, you can adopt a potential ERP which is a widely used technology. Besides ERP, other types of systems exist, such as customer relationship management (CRM), which focuses on sales, automation, and customer service. Or human capital management (HCM), which is HR technology that helps with the entire hire-to-fire process.

There are many different technologies like business intelligence, software systems, supply chain management automation, in addition to emerging technologies like machine learning and AI, which, sometimes can be built into the technology.

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Preparing your Business Roadmap

From this respect, you need to remember that defining your current existing systems and your future envisioned systems is the best approach to help you support your personnel, the process, and the strategy component of your overall business transformation. Once you have identified the four major threads, which consist of strategy, operating model, organizational model, and technology strategy - you need to put it all together in a business transformation roadmap or plan.

These changes will require some time, considering that your organization was not developed overnight. Nevertheless, it is beneficial to have a clear plan outlining the change schedule. The business transformation plan and roadmap usually include all the different threads besides other things, but those are the major workstreams or activities that you ought to include in your overall transformation. It is also important to note that you do not necessarily want technology to drive your entire business transformation.

Organizations with the belief that it takes a hot new technology to transform their business, or in the least get a vision for how to change their business, need to discern that it may be an enabler, but it should not be the driver. The transform driver should be your overall strategy, organization goals, and operational and personnel strategies.

Ultimately, you should treat your business transformation like any other organizational project, keeping a clear plan with milestones, a project manager, and outside consulting support when needed.

Extra Resources

Regardless of your transformation size and scope, you want to make sure that you have a clear business transformation plan and roadmap to help you move forward. For more information on the business transformation roadmap concept, I encourage you to download the 2021 Digital Transformation Report where you can find some of the best practices behind business transformations.

I hope you found this information useful and if you have questions regarding business transformation and how it can optimize your organization, please don’t hesitate to reach out to me directly. I am happy to be an informal sounding board as you move through your digital transformation journey.

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Eric Kimberling

Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.

Eric Kimberling
Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.
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