If one feels that their business is not achieving its growth potential or is unable to maintain a competitive advantage, then it might be time for a business transformation. Previously, Anand Jayapalan had mentioned that business transformation is basically a term used to describe the situation where a company makes fundamental changes to how it operates. These changes are carried out with the aim of improving both the operational and financial performance of the company. A business transformation initiative may apply to the organization as a whole or a part of it, such as a department or product line.
There are many driving factors behind a company’s transformation. One is likely to find that a mix of two or more of the following drivers is influencing their business transformation project.
- Company mission: The company mission influences the culture maintained at the organization, as well as how it defines and produces value for the customers. If it seems that the customers are no longer responding well to the offerings of the company, or its daily operations are struggling, there might be a misalignment between the company mission, culture, and audience. Hence, a business transformation would be needed to become better aligned with the company mission.
- Costs: Cost changes could be a driving force behind business transformation, or the result of it. If the profits and revenues of a company are going down, or if it is experiencing problems in competing with other firms that can offer a lower price for similar products, it may be time to consider a transformation. The company may have to work with different vendors, make internal process improvements or evaluate the cost of manufacturing goods. They might even embrace new technologies that lead to cost savings, while having a transformative effect on the business.
- Innovative technologies: Implementation of brand new technologies has become vital to business transformations today. Leveraging new-age technology can help one to optimize internal processes, improve customer communications, level up productivity and so on. Moreover, being open to advanced technologies can even enable a business to gain ground as a market leader, ultimately improving the rate at which customers adopt their products and services.
- Customer expectations: If the customers are not satisfied with the value provided by the company, it may indicate the need for a business transformation. A company must be well acquainted with the target audience, their needs and pain points. They also need to be clear about any potential gaps that can form between what they promise and what they actually deliver to the customers. Customer driven business transformation generally goes hand-in-hand with other drivers.
- Market disruptors: If a market experiences abrupt, yet significant change, it may demand quick and swift action on the part of a company. These changes may range from the entry of a new business competitor to the development of digital tools that change customer expectations. Companies must have a plan in place to pivot and transform if a huge disruption takes place in their industry.
In the past, Anand Jayapalan had spoken about how business transformation is a multifaceted process influenced by a combination of factors. Successful business transformation requires a holistic approach that addresses both internal and external drivers while aligning with the strategic vision and goals of a company.