Business Transformation in 2021

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In recent times many organizations have made the decision to embrace transformation as part of their strategy. There are different approaches to the concept.

At its most basic level Business Transformation is the process by which organizations effectively change to a new competitive and strategic direction.

In theory, Business Transformation is the adoption of a new competitive strategy that improves a company’s competitive position relative to its competitors. But this is only a rather narrow definition and misses several important rationales, for example changing organizational culture, and changing staff as well as the impact of these changes on your customers and employees.

Transformations or loosely defined-iterations are essential to a thriving business. It implies a change that brings a new or different type of focus to an organization. For any business or industry transformational change, the key is identifying, anticipating and implementing change that will have the greatest impact on business performance, providing new opportunities, enhancing organizational performance and providing a competitive advantage.

Digital transformation a subset of business transformation is one of the fastest-growing fields in management studies and is specifically focused on understanding how companies are transforming into a technology-driven operation. Digital transformation encompasses a wide range of activities including e-business, digital marketing, digital enterprise, customer experience management, digital mobility, and a plethora of other strategies. Digital transformation is rapidly transforming business operations and impacting the way organizations operate.

To understand transformation in its fullness, you will need a clear understanding of change management. The basic premise of change management is that any change that creates a positive effect on the performance of an organization can be considered a successful transformation. Although the term “changing” may seem somewhat vague, the primary focus of the practice is to apply the same process (thesis) across an array of organizations so as to create a more favourable outcome. In other words, change management focuses on creating organizations that are faster, more efficient, and better designed to meet future competition. By facilitating transformation, change management seeks to mitigate the negative impact that organizational activities can have on organizations as a whole and the individuals within them.

So, what is Business Transformation and how is it impacting companies today?

I can remember the first time I heard the phrase “business transformation”. The company was IBM and in the late 90s, they set about transforming their business to focus on services rather than products. IBM was struggling to remain competitive with its existing strategy so the transformation was inevitable.

Business Transformation is about people, process and technology, together with a strong sense of urgency. It is about change at all levels that allows us to compete effectively in the market place.

From Wikipedia: “Business transformation is a change to the business model of an organization, which involves changes in the culture and practices of employees, structure of management, elimination of redundant activities, processes and products, performance measurement and reward systems, the competitive environment where the business operates.”

There are five main areas to consider when we start planning our business transformation program;

  • customers,
  • products and markets,
  • management and organization,
  • technology, and
  • organizational culture.

Today, many companies choose to optimize their organizational structure because of the simple fact that every team must compete and win. That’s why it’s important to understand how Business Transformation plays into this equation.

How real can this be?

The aim is to increase business, meaning that people are making money!

For example, the move from cost-centre to profit-centre, the adoption of business process reengineering, and the introduction of project management are powerful concepts in management and can be considered as examples of business transformation.

Business transformation is not just about change, organization change or intelligent automation, but also regards business models and strategy change.

It’s about business model innovation (how to make money).

For instance, any product that gets used in new ways is a by-product of adoption that could be monetized. A company could be making money by generating and selling MOOCs (Massive Online Online Courses) while monetizing the usage data through AI for example.

In order to keep up with your competition, you have to constantly search for solutions that will improve your business processes. Sometimes business transformation is occurring within existing processes, but other times it is changing the organization’s vision so that everyone is working towards one common purpose.

One of the main reasons most organizations embrace Business Transformation is to better compete with their competitors. The goal is to create higher levels of customer loyalty and satisfaction, greater competitive advantage, and generate a more profitable return from existing resources.

The factors driving Business Transformation

  • Egalitarianism: Improvements or innovations in human relations and management practices Awareness: The rising level of consciousness of high standards of performance throughout the industry. This is closely related to consumer pressure for better value.
  • Increased complexity: Factors such as increased competition, faster product obsolescence, and technological change mean that companies must accelerate product development.
  • Power Struggle: Companies must adopt different strategies to counter or exploit the power struggle between their competitors.”

Markets are not static; they are always changing. There are many new products and markets being introduced all the time. It is important that we always remain relevant and up-to-date so that we do can retain customers.

If your organization is keen on fully understanding the impact of business transformation on overall business success or you need some guidance or have questions on how you can benefit from business transformation, do not hesitate to reach out here. For us, at Bloop, we believe it is important that the business transformation route to success must be both viable and scalable, even in different markets or industries.