- What is business process transformation?
- Why do the majority of transformational projects fall short?
- Which is more critical in delivering value for business: process transformation, technology implementation, or the cultural shift?
- What to start with? First business process transformation steps
- Make the leap, take the lead
Business process transformation is the key for companies to gain an edge over the competition and create new sources of value.
In response to the anxiety-provoking combination of war in Europe, soaring inflation, and energy crisis, companies might be tempted to turn on a survival mode. However, this single tactic will hardly protect them from the continuous changes coming their way. Companies that pay too much attention to temporary defensive initiatives risk neglecting activities essential to gaining ground on rivals, reaching long-term objectives, and even getting some unexpected immediate triumphs.
Today, the business process transformation framework is what can take you from stagnation to revitalization and help you safely transition into the future. But how can you make this shift? Let’s find out.
What is business process transformation?
Business process transformation is an integral, holistic, and long-term endeavor that involves the complete modernization of a company’s IT backbone and associated business processes. The business transformation process model also triggers cultural shifts in the mindsets of both decision-makers and employees to alter the way a business operates on a cellular level.
Why do the majority of transformational projects fall short?
The gap between expectations and the outcome of technology-enabled business transformation is often enormous. A discouraging 73% of companies failed to generate any business value from their digital transformation efforts, while 78% couldn’t meet their business objectives. The high failure rate of the business process of digital transformation stems from multiple pitfalls.
Although implicitly understood by executives, a company’s strategic objectives are sometimes poorly translated into implementation choices. This leads to diluted value and hampers a successful business transformation.
Lack of skills
Many organizations don’t allocate top talent to support the digital technology behind the transition. Instead, existing talent is deployed to meet near-term challenges. Moreover, 53% of companies report the inability to identify needed skills as the main impediment to transformation.
Inability to grasp the business problem
Around 23% of financial benefit is lost at the planning and targeting stages of the transformation business process. It means that one-fourth of transformation initiatives lack solid business analysis, as a result, failing to identify areas of improvement, the scale of change, risks, key performance indicators, and other precursors of the new business strategy. A lack of a feasible use case also increases the risk of scattershot resource allocation.
Unlike traditional operational and capital budgets, the budget for business process improvement is a flexible figure with many unknowns. Without a predictable budgeting model, companies may end up pouring more budgets into standalone software or any other innovative solution with a low impact on desired outcomes.
Around 70% of employees experience resistance to organizational changes, which negatively impacts employee buy-in during any transition. This change burnout can result either from low workplace morale or poorly communicated value of transformation initiatives.
The pitfalls we mentioned above tend to fracture your transformation success. However, it’s something else that breaks it.
Set up your transformation for success
Which is more critical in delivering value for business: process transformation, technology implementation, or the cultural shift?
To get the business process transformation model right, you need an integrated approach that links business strategy to transformation ambition to execution discipline and all the way to employee engagement.
While tangible value can be achieved through measurable process optimization, employee buy-in is supported by effective change management and incremental mindset shifts.
Therefore, business process management and digital transformation rest on three equally important pillars: process redesign, technology enablement, and a clearly communicated vision across the whole company.
Optimized processes lead to optimized business goals and increased organizational efficiency, setting the stage for disruption-free changes. Optimizing a process also presupposes automating key repeatable aspects of that process and removing bottlenecks.
In this case, technology consulting emerges as a strategic partnership for a company that aims to improve operational agility with automated and governed workflows. We’ve curated common business process transformation examples that can be achieved with automated processes.
|Area||Optimization at work||Outcome|
|Finance||Automated month-end reporting|
Finance data management
ERP systems implementation
|Faster and more reliable reporting|
Better regulatory compliance
Faster finance decisions
Minimized risk and instantaneous decision making
|Sales and marketing||Client segmentation|
Dedicated CRM platform
|Insights into cross-, up-, and re-selling potential|
Targeted offers and granular marketing initiatives
Streamlined cash flows and demand-driven production planning
|Logistics operations||Smart warehouse system|
Automated inventory management
Integrated order management
|Cost cutting and operation visibility|
Real-time insights and asset tracking
Simplified sales process
|Talent management||Automated employee performance|
Internal innovation hubs
|Easier progress tracking and increased employee satisfaction|
Better document management
Reduced costs of training
At-scale technology implementation is among the main levers of business process transformation. CIOs can drive real, technology-driven change based on a more flexible, modernized infrastructure that adjusts to the evolving business needs and markets.
Business transformation tools in a digital era include, but are not limited to:
- Cloud-based solutions reduce the costs of data processing, promote business continuity, and ensure easier scalability and access to innovation.
- Enterprise applications increase the portability of mission-critical data and amplify collaborative workflows.
- Integrated data analytics, business intelligence, and visualization tools inform business decision-making in near real-time and help companies identify the correlation between operations and results faster.
- AI-enabled process automation increases the ability to scale, streamlines manual tasks, and reduces operational costs.
However, technology can only deliver anticipated value if it is designed to help you solve your business challenges from the start. On that same note, you don’t have to inject money into complex custom solutions at the onset of your transformation. An experienced technology partner can make standard solutions work for you by customizing them to your needs.
We make the most of generic solutions by customizing your options
The involvement of employees
People are your strategy in motion. Employees’ mindsets are ingrained by past management practices and cannot look into the future. Yet, paradoxically, people are also the organization’s most underestimated asset. Only 50% of employees are satisfied with the resources they have at their disposal to learn how to use new technology.
To galvanize employees during the leap, business leaders should provide ongoing internal opportunities to upskill and reskill. This will help staff to build up adaptability as an evergreen competency and reduce change anxiety. Having training, documentation, and subject matter experts also eases the strain on employees and helps them better adapt to new settings.
Organizations at the transition stage should also think of employees as the end users (or stakeholders, if you will) of transformation. Knowing exactly how your employees will interact with and use new tools and how new technology will help them drive superior performance is essential to a successful digital transformation.
What to start with? First business process transformation steps
The right performance transformation efforts should have an all-in agenda. They cut across business units and functions, have a dual effect on both the top and bottom lines, and engage the workforce.
However, all great things start small, and so does the path to a successful business process transformation.
Spot gaps and inefficiencies
You cannot improve what you can’t measure. To improve your company’s performance, you need to know exactly what to work on and have a clear understanding of the current business situation.
A solid performance gap analysis will help you define what aspects are lacking in the performance of your company in comparison with your competitors and industry benchmarks.
When you are well aware of your current business posture, you should proceed with setting S.M.A.R.T. goals for your destination. Goal-setting will enable you to locate specific objectives that can be achieved in a 1-2 year horizon, thus creating lighthouses that can be scaled later.
A properly executed performance gap analysis and informed ambitions provide a starting point for developing a plan of action. If you’re struggling with any of these planning activities, our experts will provide you with a vantage point by conducting a step-by-step gap analysis based on best agile practices.
Create a strategy
A holistic and well-defined strategy helps shape an achievable transformation ambition through actionable guidelines. Around 19% of companies cite clarity on the transformation’s strategy as the main driver of the transition’s momentum.
A plan of action, in this case, is premised on accurate resource allocations, business evaluation, metrics, and bottom-up planning. Organizations that have invested in articulating their strategy can then translate strategy into an incremental delivery plan with defined roles and measurable outcomes.
Estimate your resources
And the trickiest part? Breakthrough projects must be performed and delivered under specific constraints. Likewise, resources are one such constraint that should be strategically and dynamically shifted.
Whether it’s reallocating existing assets (talent, technology, and investment) or injecting new ones, organizations should prioritize areas where resource boosts would generate the greatest impact for the transformation. Therefore, business leaders should start by assessing the profitability and resource projections for every meaningful business cell.
If companies do not have enough expertise to assess the value creation potential, they can turn to third-party business transformation analysts to find ROI outliers and determine the right magnitude of action needed for a shift.
We, at *instinctools, help companies drive technology-enabled business transformation with a consistent transformation strategy, thorough gap analysis, and effective employee training.
For those who want to accelerate maximum business value from their transformation initiative, in one of our upcoming articles, we’ll share *instinctools’ unique approach to make it happen.
Make the leap, take the lead
In a business environment, change is inevitable, but growth is optional. Business process digital transformation allows organizations to embrace, govern, and benefit from this change. A business transformation arena unites each organizational, institutional, and digital effort into a cohesive and agile organism to foster groundbreaking overhaul in processes, IT infrastructure, and business culture.
Done right, this collective effort can help a company to adopt a “better, faster, cheaper” approach and accelerate the pace of decision-making at optimized costs. However, this leap requires solid groundwork manifested in a transformation strategy, effective resource allocation, and training programs. Miscalculating any of these components can lead to insolvency, instead of business-led growth.
Embarking on a transformation journey?