management Management (or managing) is the administration of organizations, whether businesses, nonprofit organizations, or a Government agency, government bodies through business administration, Nonprofit studies, nonprofit management, or the political s ...

it has been said that business transformation involves making fundamental changes in how business is conducted in order to help cope with shifts in market environment. However this is a relatively narrow definition that overlooks other reasons and ignores other rationales. A better understanding is achieved by considering that "transformation .is generally a response to two things. First, there are underlying problems or causes of organisational pain that need to be addressed. They have to be properly understood but nevertheless they are a key component. Second, there is a desire by the top management and other senior stakeholders to use the opportunity of addressing these causes in ways that fundamentally alter the paradigm of the organisation." Others describe Business Transformation as "the process of fundamentally changing the systems, processes, people and technology across a whole business or business unit. As such, a business transformation project is likely to include any number of change management projects, each focused on an individual process, system, technology, team or department."

When business transformation is used

The need for business transformation may be caused by external changes in the market such as an organisation's products or services being out of date, funding or income streams being changed, new regulations coming into force or market competition becoming more intense. This management approach may also incorporate business process reengineering (BPR). However application of BPR does not of itself constitute a business transformation, the outcome should be the deciding factor as to whether any activity is truly transformational or simply improvement. Other methods like Lean or Six Sigma are rooted in incremental improvement rather than paradigm shifts in the way things are done: * To increase

revenue In accounting, revenue is the total amount of income generated by the sale of product (business), goods and services related to the primary operations of a business. Commercial revenue may also be referred to as sales or as turnover. Some compan ...

market share Market share is the percentage of the total revenue or sales in a Market (economics), market that a company's business makes up. For example, if there are 50,000 units sold per year in a given industry, a company whose sales were 5,000 of those ...

* To improve

customer satisfaction Customer satisfaction is a term frequently used in marketing to evaluate customer experience. It is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number ...

* To cut costs

Components

Business transformation is achieved by one or more of: realigning the way staff work, how the organisation is structured, the core product or service portfolio of the business and how technology is used. Typically organizations go through several stages in transforming themselves: * Recognising the need to change and gaining consensus amongst stakeholders that change is necessary * Agreeing what form the change should take, the objectives of the change and a

vision Vision, Visions, or The Vision may refer to: Perception Optical perception * Visual perception, the sense of sight * Visual system, the physical mechanism of eyesight * Computer vision, a field dealing with how computers can be made to gain und ...

that describes a better future * Understanding what the organisation is changing from and what needs to change in detail * Designing the new organisational way of working and its support and management * Testing and implementing changes, usually in waves (this may take place over a number of years) * Bedding in the change so that the organisation cannot move back to how it was and achieves the intended benefits Business transformation can lead to developing new competencies and making better use of existing competencies.

Transformation examples

Examples of organisational transformation include: *

General Motors General Motors Company (GM) is an American Multinational corporation, multinational Automotive industry, automotive manufacturing company headquartered in Detroit, Michigan, United States. The company is most known for owning and manufacturing f ...

' transformation and restructuring (around 2009) *

BBC The British Broadcasting Corporation (BBC) is a British public service broadcaster headquartered at Broadcasting House in London, England. Originally established in 1922 as the British Broadcasting Company, it evolved into its current sta ...

's Delivering Quality First programme (since 2011) * Box's pivot from consumer to enterprise (around 2009-2010) *

British Airways British Airways plc (BA) is the flag carrier of the United Kingdom. It is headquartered in London, England, near its main Airline hub, hub at Heathrow Airport. The airline is the second largest UK-based carrier, based on fleet size and pass ...

' strategic transformation programme in response to low cost airlines (around 2004-2005)

References

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