The concept of business transformation has been around for years, even if it hasn’t always been called that. Formerly known as change management, the term is often interchanged with digital transformation. Some may consider it to be a business buzzword.

Yes, business transformation can involve software and technology, but it’s about much more than that. This article explores what it is, why it matters, and how to ensure your transformation process is successful.

How do you define business transformation?

Search online for ‘what is business transformation’ and you’ll find plenty of definitions. Broadly, it involves changing the way business is done, to cope with changes in the market environment.

Business transformation projects cover fundamental changes – large and small – to your organisation or business unit. These can involve systems, processes, people, culture or technology. It affects your whole company, even if the project focuses on one function or team.

Why does business transformation matter?

There are many triggers for a business transformation process, and we’ll discuss some of those later on. But whatever prompted the process, it should ultimately result in a range of benefits, for example:

  • Improved productivity
  • More efficient systems
  • Stronger business reputation
  • A more sustainable business
  • Reduced costs
  • Better customer satisfaction
  • Increased flexibility and adaptability
  • Gaining of competitive advantage
  • Value for shareholders, investors or other beneficiaries

Various factors spark the need for a transformation

You may start by knowing you must overhaul the entire business, for instance because of a merger or major strategic change. Or, a bigger business transformation project may evolve from an impetus like integrating a new technology stack or system.

Both external and internal factors can spark the need for a business transformation.

External factors can include elements like new regulations, increased competition or new entrants to your market. The Covid pandemic has clearly been one of the most significant factors in recent years. It’s led to rapid, dramatic shifts in the way people and businesses work, and required greater flexibility.

Internally, the trigger could be the need for a new HR, procurement or finance system. You may need to improve your systems’ functionality or replace legacy software. Or, to integrate back and front-end systems so you can make better decisions based on accurate data.

Five things to consider when beginning a business transformation

Every transformation project is different and the detail of the process will vary. However, we believe all successful transformations involve these core steps:

1. Define your operating model. This marks the starting point for any organisational transformation. It’s essential to know how your business works – not how you think it works or would like it to work. Creating a visual representation helps you identify inefficiencies and risks, and prioritise the most impactful actions

2. Map your customer journey. Find out how, where and when customers interact with your business and how well these touchpoints work. Understanding and defining these stages will help you strengthen their associated processes and ultimately improve customer satisfaction

3. Define, review and document how your processes work now (as-is) and how you want them to work (to-be). This will enable you to define KPIs, essential metrics and quick wins in process improvement. And, to identify the systems you need to support these improvements

4. Make sure your vision for the future is clear and the transformation aligns with your business strategy. Use your to-be processes to create a template for the business and set a baseline for success

5. Ensure the transformation has support from leaders to make it happen, but also engage the rest of the team. If everyone understands what’s happening and what the benefits will be, they’re more likely to support and participate

Remember, business transformation is an ongoing process. Even after delivering a project, you must monitor the results and be ready to act to ensure continued benefits.

Example of a basic process transformation

Diagram showing how you might change a process, as produced by the BusinessOptix platform
Source: BusinessOptix

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We are a business transformation consultancy. Arrange a free, no-obligation call to discover how we can help you analyse and improve your business processes.

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