Business transformation is a concept that has been getting a lot of traction in the business world, especially as major corporations like Airbnb, Uber, and Netflix, continue to alter their business models to accommodate ever-shifting customer expectations.
However, since “business transformation” has reached buzzword status in recent years, the term has become surrounded by misconceptions. And unfortunately, you can’t implement a successful business transformation plan without understanding its true meaning.
What is Business Transformation?
Business transformation is a concept with a number of definitions.
To some, it’s synonymous with change management—a framework that involves aligning employees, processes, and technology with a company’s overall goals. Others describe business transformation as an umbrella term for making large-scale changes to business operations.
In a world of unprecedented disruption and market turbulence, business transformation actually ends up combining several of these ideas. Today, business transformation revolves around the need to generate new value—to unlock new opportunities, encourage growth, and boost efficiency across departments. Whether you’re running a small startup or a large enterprise, business transformation requires redesigning, restructuring, or expanding your organization in order to adjust to internal or external changes.
What Does Business Transformation Mean?
But, businesses don’t change simply for the sake of changing. Typically, when a company discovers it needs to modify some of its practices, it entails more than just replacing current systems with automated ones.
In fact, we can divide business transformation into three distinct categories:
Business transformation begins with rebuilding a company’s structure and its method of operation. This process is often driven by executive leadership and focuses heavily on the employees. Only when general management is supportive and on board with the new changes can an actual transformation take place.
Technology is a crucial driver of business value in this digital-centric era. Key focus areas of technology transformation include systems implementation, new technology adoption, and social network amplification. This could be as straightforward as updating the latest version of a software package or as in-depth as conducting a full-scale audit to migrate software systems.
For long-established companies, changing the culture can be particularly daunting. Here, the goal is to preserve aspects of a culture that make a company strong and modify any behaviors impeding strategic change. While finding an alignment between culture and a new strategy takes time, having a comprehensive understanding of which levers are steering the culture can help organizations move in the right direction.
Benefits of Business Transformation
Organizations initiate business transformations for several reasons. Not only does it better prepare you for unforeseen challenges down the road, but it can help you adapt quickly to supply chain disruptions, worker shortages, and time to market pressures.
Here are a few of the biggest benefits of digital transformation:
Whether you’re working to strengthen communication between your employees, customers, or partners, business transformation can help you create healthier professional relationships across the board.
Today, communication requires a multi-channel approach, especially since most people consume content on several channels, including mobile, email, and intranet.
By integrating your systems, your data will be centralized and updated in real-time. Plus, having everyone work off the same information will result in fewer blind spots and broken down silos and allow you to more easily identify bottlenecks.
Digital tools and technologies can help you stay competitive in the marketplace and deliver gains in efficiency and productivity.
Workflows can become faster, smoother, and more accurate using the unmatched power of modern technology. This way, staff can spend less time on mundane tasks and focus on developing new ideas and innovating.
Protect and Control Data
Data security is a top concern for businesses today, and rightly so. With so many legacy tools now having a digital interface, safeguarding your information against online threats is more crucial than ever.
As we embrace the age of the Internet of Things (IoT), business transformation in this sense is not just a nice-to-have but a must-have. Whatever your digital transformation project, cybersecurity professionals need to stay vigilant against a growing number of data breaches, malware infections, and ransomware attacks.
With up to 30% of globally worked hours estimated to become automated by 2030, some are worried business transformation will result in an unprecedented number of job losses.
However, automation doesn’t necessarily have to be a bad thing for employees. For instance, upgrading systems allow you to reduce the burden of paperwork and combine data from disparate systems, thus improving information accessibility.
By automating simple processes, employees can drastically decrease the chances of human error and be confident that they are providing accurate service.
Improved Customer Engagement
Your business transformation approach depends entirely on what you know about your customers. But their needs are constantly changing, which means you have to keep up with evolving consumer attitudes and behaviors.
Business transformation allows businesses to gather, store, and analyze customer data so they can get a clearer idea of their customers’ preferences. Companies can even leverage data analysis and artificial intelligence to gain greater insights and create products and services tailored to each customer’s unique needs.
Business Transformation Objectives
Before a company can follow a digital transformation roadmap, business leaders must first determine their main objectives.
If you want to ensure your organization is on the correct path, ask yourself the following questions:
- What differentiates my business?
- What are some of the pain points and possible challenges I should be prepared for?
- What technology solutions can help future-proof my business?
- Will my customers embrace these digital changes?
- How will I avoid falling back into old habits instead of moving forward?
- What are the best ways to budget for and finance this business transformation?
- How will I measure whether or not the transformation was successful?
Implementing Your Business Transformation Solution
Business transformation can help transform your organization from the inside out.
But, success doesn’t happen overnight. By building a strategic roadmap and making small changes over time, you can slowly start transforming key areas of your business and meet all of your company objectives. At 5P Consulting, we will analyze your goals and needs to help you create the right business transformation strategy to take your organization to the next level.