Business transformation initiatives are often implemented in response to a pressing challenge to the status quo. These initiatives can include mergers and acquisitions, personnel changes, outsourcing, supply chain reorganization, and new business models. In practice, the business transformation process often involves making significant changes to an organization's people, processes, and technology. The COVID-19 pandemic has been a major catalyst for companies to go digital.
What began as a response to the crisis has become the new normal, with far-reaching implications for the way companies perceive the customer experience. Studies have shown that digitally mature companies are 23% more profitable than their less mature counterparts. If companies take the digital transformation strategy further, areas for improvement include increasing collaboration between employees at different levels and improving performance management. Both types of transformation drive innovation and open up opportunities for new business strategies that make the company more efficient and profitable.
Optimizing the customer experience is an important common goal for the digital transformation business model. The Director of Transformation (CTO), a high-level position that is becoming increasingly important in many sectors, is the high-level organizer of the transformation process. Product managers, as innovative thinkers, and personnel managers have great potential to foster business transformation. How your company intends to transform will depend entirely on where you are now, where you want to be, and why. This transformation allows a company to change its previous business model to be more efficient and profitable.
The most successful transformations turn ideas into detailed business plans with trackable metrics and with limited time frames for measuring results. Netflix is famous for being one of the most important use cases for a successful business model transformation. The reasons why a company may decide to transform its business model are numerous, such as low profits and low turnover, the introduction of new technologies, market disruptions, and many more. The managerial tasks of a negotiated transformation consist of participating in debates, exerting influence, and skillfully preparing the organization for transformation. McKinsey research has long documented that enterprise-wide transformation is difficult, since less than a third of transformations achieve their objectives of improving organizational performance and maintaining these improvements over time. However, with today's fast pace of development, time is often of the essence in business transformation.
While the most successful transformations address most of an organization's value creation opportunities, some focus on a specific topic (for example, transforming the workforce to adopt agile working methods). Transforming business processes involves changing or completely changing the way a company operates, introducing faster and simpler processes, and allowing staff members in the organization to be more productive.