As customers, competitors and technologies evolve at a rapid rate, business leaders must be proactive to effectively address the threat of disruption and drive competitive advantage in the marketplace.
This has resulted in a dramatic increase in the number of significant change initiatives that companies have launched in recent years. And we do not see this slowing down as the relentless pace of change continues to increase exponentially. Constant and rapid change is now the norm.
Because of these dynamics, transforming your business continuously in an agile fashion is key to success. Companies that can pivot quickly in transforming their business will have a significant competitive advantage. Those that don’t will cease to exist.
What is Business Transformation?
Business transformation has numerous meanings to many companies ranging from tactical to strategic and event-driven to evolutionary. Our definition of business transformation is “Driving competitive advantage in the market through the deployment of strategic changes and ongoing performance improvements across an organization, encompassing people, culture, process and technology.”
True business transformation is complex and multi-faceted and impacts all parts of your business. The relationship model below illustrates the business elements you need to consider in a transformation journey. Each business element is critical on its own but collectively requires structured integration with others to deliver new business capabilities and achieve world-class performance levels.
Hence, transformation is not just about updating your vision, rolling out a new technology solution or improving processes. It requires a holistic view into building and delivering new capabilities to achieve a competitive advantage.
TAKING AN AGILE APPROACH TO BUSINESS TRANSFORMATION
Based on business transformation complexity, a thoughtful approach is required. There are several key aspects of transformation that are critical to consider in transforming your organization in an agile manner.
It starts with an analysis of your current situation and the business drivers impacting your business, including customer, competitor, regulatory and internal pressures. Essentially, you need a 360-degree “real-time” understanding of your organization’s performance. The ability to quickly attain and assimilate data to inform effective decision making is critical.
From there, you can develop a compelling vision, strategy and business architecture to guide the ideation, design and delivery of world-class business capabilities in an agile fashion to drive value quickly. And of course, you must enable and sustain this change through an intentional focus on people, culture and change governance.
The graphic below defines Centric Consulting’s point of view around the six key areas essential to successful business transformation, and the need to build agility into each of these areas.
Customer and Business Insights
It is imperative to know where you stand today to transform your organization. Based on the rapidly changing nature of customer expectations, technological advancements and new competition, where you stand can shift in the blink of an eye. As a result, companies must gather and process real-time business and customer insights and effectively leverage these analytics to feed both planning and operational activities.
Vision and Strategy
Companies can no longer rely on three- to five-year strategies (or even one-year strategies) to guide their organization. Dynamics are changing too rapidly. While you still need a North Star to guide your organization, it can’t be so rigid that you can’t make adjustments based on current and evolving business drivers.
Companies must inherently build agility into their process designs, organization structures, workforce and technology infrastructures to enable adaptive change. So, each of these elements must work together cohesively to ensure you can continue delivering world-class capabilities as business requirements change.
Agile Value Delivery
Organizations must continuously and incrementally deliver value to the marketplace. Business and IT teams must collaborate closely to provide new business capabilities at an accelerated pace. To do that, your company must leverage agile and modern software delivery techniques that can help you create and bring new products and services to the market quickly.
People and Culture
Without a focus on people, your organization can’t effectively transform, let alone transform with an agile mindset. Companies must build change leaders across their company and establish a culture of change that engages all employees.
Enterprise Portfolio Management
Enterprise Portfolio Management (EPM) has historically received a bad reputation for slowing down progress due to heavy governance and a bureaucratic way of doing things. However, based on the ever-increasing pace of change, EPM is quickly emerging as a strategic business capability required to facilitate end-to-end strategy execution, enable business agility and accelerate value realization — not hinder it.