What really is a business transformation? Why is this kind of initiative so misunderstood? And why do many – even upwards to 70% - fail?
These are fundamental questions about business transformations that are explored in a recent article in 360° – the Business Transformation Journal. The article, entitled “A Typology of Business Transformations,” starts out by clearly defining what a business transformation is, and how it differs from organizational change. It also shares detailed information on questions that should be asked before such an initiative is undertaken. They include:
- Why (the objective): Who do we want to be?
- How (the means): How are we going to change?
- What (the outcome): What is the value of the change?
Using a morphological illustration, the expert authors in this article also define the pillars, attributes, and values that were identified in a comprehensive examination of 20 global business transformations.
Based on this analysis, the authors conclude that there are four types of business transformations that lay the foundation for the successful communication and management of these initiatives. The four types are:
- A radical transformation is one in which there is a major reconfiguration of a company’s business model, with a new set of core concepts. Of the 20 cases studied, SAP SE and FedEx are a couple of companies that went through this type of transformation.
- An architectural transformation is where the enterprise architecture is overhauled, yet the components and core concepts of the company remain unchanged. Clariant and the UK Police are a few of the ones that fit this category.
- A modular transformation is one in which there are changes to the core design of the enterprise, but the overall architecture is intact. Shell Oil Company and Allianz are a couple examples of this type of transformation.
- An incremental transformation is more about refining and extending the established design of an enterprise, with marginal technological and operational changes that come from performing current work differently. Mercedes-Benz belongs to this category.
The bottom line? The type of transformation a company needs will vary. If your company is considering such an undertaking, this article can provide you with deep insight into each type and which one may be right for you. In addition, the typology will provide you with crucial knowledge and information that will increase the likelihood of success.
To read more insights on this topic, access the full article on page 24 of Issue 10 of 360° – the Business Transformation Journal. This publication is produced by the Business Transformation Academy, a thought leadership network devoted to providing cutting-edge insights on innovation and business transformation. For more business transformation articles on the SAP Community Network, please visit the 360° – the Business Transformation Journal library.
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