The impact of change is another crucial aspect of business transformation that requires in-depth and strategic planning. According to McKeown and Philip (2003), Business transformation is a repetitive process of change that happens in an organisation. This not only relates to software and hardware changes, but to the cultural changes experienced amongst employees. The management of this change extends to both the technological and cultural aspects. Change management strategies are tailored for each organisation and implemented in phases that suit each organisation’s unique requirements. These strategies include business process re-engineering, knowledge management, organizational development/learning, systems integration, Total Quality Management and use of information technology.
Companies don’t often see any immediate financial benefits from significant business transformation (Saxton 2001). The lag can be attributed to many issues, both technological and cultural. Staff acceptance of new technologies can impact the performance of new systems if change management procedures are not implemented effectively, and problematic external systems can further hinder performance data if they are integrated with the new solution.
The main findings from a study compiled by McKeown and Phillip (2003) demonstrate that the change programs in each phase of business transformation may be repeated in other phases. This leads to the conclusion that the nearest business transformation model used is multi-stage business transformation model. A full business transformation is a continuous process that may take years and may not sequential in nature.
The same key findings have been identified in the interview done by (Oakland and Tanner, 2007). They undertake a study 28 organizations to identify what are the critical success factors in managing change in organizations. Their findings lead to identifying processes as the main integrator to an Organizational Change Framework.
Change has been a constant theme in the Business Transformation process. The ability to integrate the competitive strategies into a coherent change plan has been a skill learned by the organization through management development, the utilization of consultants, lessons learnt from other organizations and the experience of making change occur. There are a number of common themes have been identified in both of the articles related to business change and transformation. The most important findings that relate to the successful business change transformation are as follows:
- Change is mainly driven by external factors.
- Leadership is important in setting direction and manage risks
- The need for change must be aligned to the operational issues
- A process approach is central to successful change
- Performance measurement has a key role in supporting change
- A project-based approach increases the chance of success
- External support adds value in managing change and the transfer of knowledge
- Aligning the culture to support changes in people’s behavior
- Continuous review and repetitive phase and processes for continuous improvements
According to Sir Roy McNutty (McKeown and Philip, 2003) it is very important to identify where each transformation starts. The programs need to be thought out carefully and catered to support the change requirements. Short-term and the long-term vision needs to carefully align with the competitive strategies that will be implemented. Leadership is also a critical factor in making sure the success of transformation is being carried through. Business transformation is not a silver bullet solution. It involves careful consideration of important critical success factors and involves everyone in the organization.
There are also many reported instances of zero or negative impact of business transformation on business performance (Radhakrishnan, Zu and Grover. 2005). N Venkatraman (1994) attributes the weak and detrimental cases to lack of innovation and diversity of the systems – especially when employing off-the-shelf solutions. Businesses may succeed with their transformation, however market standards could have already adjusted to reflect more efficient results. This highlights the importance of market awareness and researching business capabilities before any transformation begins. Competitor analysis is one such example and is paramount to long-term success. The ultimate goal of business transformation should be creating long-standing differential business value. Therefore, companies that deploy IT projects with a significant edge over the competition are more likely to succeed.