Understanding Business Transformation
Let me guess what you’re thinking: Oh, this word again. Right. Here we go.
Yes, you’ve heard it over and over again. Organizations make substantial investments in technology hoping to improve business practices. In the early stages of projects, the focus may indeed be using technology to improve the business, but as deadlines approach, this focus invariably narrows to enabling an on-time go-live. With this shift, organizations find the results a lot like their old way of doing business. In change management, we refer to this as OO + NT = EOO or Old Organization + New Technology = Expensive Old Organization.
Remember this little equation. We’ll be coming back to it.
Some innovative organizations looked at project track records, especially technology projects, and decided to shift their focus from technology to a more holistic organizational focus.
Enter business transformation (BT). Business transformation leverages five disciplines to get measurable and lasting value at an organizational level:
- Strategic Planning
- Process Improvement
- Organizational Development
- Change Management and
- Training
BT assures initiatives deliver value by first identifying opportunities for improvement. This may require, among other activities, creating a results-based strategic plan or analyzing customer and business partner feedback. The goal is to answer the following question: “What opportunities for improvement are most likely to yield the best value?” This powerful first step assures any initiative (technical or organizational) has objective metrics to gauge progress and success. Next the future-state processes are created. Importantly, the work done at this step focuses on ideal processes for the organization. Note that no effort is invested in current-state processes.
From this information, consultants create a transformation roadmap. The roadmap lists the initiatives the organization should pursue, the expected value of each initiative and a timeline to complete each initiative. In some cases, benchmarking metrics provided by research firms are used to articulate value; however, a more detailed analysis may also be required.
For example, one fortune 150 company chose to assess how employees within one line of business spent their time on a daily basis. They used the resulting data to identify the cost of overlapping activities and the risks of inconsistent policy interpretation, process execution, and quality assurance.
With this kind of information, leadership prioritizes projects with much greater clarity as to the value delivered by the project and the magnitude of the resulting change. This is far better than simply placing a “leap of faith” on technology to drive undefined organizational improvements. Since the organization fully understands their desired state and metrics, fit-gaps with a technology project are based on alignment of the technology’s processes with the optimum processes rather than current state processes for the organization. Change increases, but so does the organization’s ability to leverage value from expensive technology investments. So with BT, what we wind up getting is OO + BT + NT = TO, where TO is Transformed Organization. For both technology and organizational projects, change management efforts are greatly improved because change managers are easily able to articulate the vision for the future and the need for change — often a challenge for change managers.
Finally, BT works at a level that enables it to affect full organizational change. By working with the business rather than IT, BT initiatives involve the right executives to realign organizations. Many BT initiatives include updates to organizational structures, role and competencies. As such, they are commonly sponsored by executives up to C-level.
By way of final example: the consolidation of a decentralized service delivery model to a shared services model with centers of excellence fits well within the scope of BT. Adding a CRM or HCM solution to support the consolidation is just one project in this greater initiative. IT is not in a position to mandate the organizational changes necessary to capitalize on the value of many large-scale technology solutions. For an HR Shared Service Center, this typically requires the active support of the organization’s Chief People Officer.
This is a long post with lots of dependent concepts. Have questions? I’d love to talk. Simply email me.
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