What is business transformation and how is it implemented?

By Indeed Editorial Team

Published 20 May 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Business transformation is a business management strategy that refers to any shift in the fundamental strategy of a company's operations. This can include changes to personnel, processes and technology and these transformations can help businesses to compete in a more effective manner or become more efficient. If you're thinking about a career as a business consultant or strategist, it's important that you understand the different types of business transformation and how you can implement them. In this article, we discuss what business transformation is, the different types of business transformation and how you can implement a business transformation strategy.

What is business transformation?

If you're thinking about a career as a business analyst, you want the answer to the question 'What is business transformation?' Business transformation is an umbrella term for strategies that businesses use to change the way that their organisation runs. The aim of any business transformation is to help the business grow and develop in a positive manner. For example, some business transformations may have the goal of operating more effectively or more strategically.

Business transformations are large, seismic shifts that help to accelerate significant changes within an organisation. These strategies also help to give the business extra value. Businesses may decide to harness the full potential of their employees, harnessing new technologies or changing manufacturing processes to make them more efficient. These transformations usually happen over multiple years, although many businesses want the changes to happen in a period of months.

Related: Corporate development (definition, types and strategies)

Types of business transformation

There are many different types of business transformation that a business can make and each type of business transformation has a specific goal. Here are some of the most common types of business transformation strategies that a company might implement:

Organisational transformation

Organisational transformation is the process of altering the structure of employees. People are some of the most important assets of a business and, sometimes, changes in the way employees work can help to have a significant and positive impact on a business. Companies may choose to change the skills or experience of the employees, the way they work or how employees share information between each department. These changes can help to ensure that employees communicate effectively with each other, which can help to improve productivity and the success of the company.

Management transformation

Management transformation is the process of changing the management structures of a company in favour of newer, more flexible options. Companies that have a hierarchical structure may not be operating in the most effective way as this structure may not facilitate quick decisions and some employees may believe that it's possible to structure the hierarchy within the business in a more proportional manner. Transforming the management structure can help to ensure that all employees feel valued in the workplace and can help to streamline decision making.

Related: What it takes to be a digital transformation manager

Strategic transformation

Strategic transformation is one of the biggest transformations that a business can make. This is because for this to take place, it's necessary for an entire transformation of the strategic operations of the business to take place. This type of business transformation if a company is struggling to make a profit can result in an entire upheaval of the company's practices.

Related: What is strategic thinking (definition and how to develop)

Business process transformation

This type of business transformation focuses on the ‘how' of a business's operation. For example, some businesses may choose to change the way they operate to an agile framework. This type of transformation involves a significant amount of automation, especially if the process is a repetitive one, so businesses may choose to focus on projects that are of higher value. This type of transformation is one that's ongoing, but the end goal is to help the business update their business processes so that the burden of low priority and relative tasks get removed.

Digital transformation

Digital transformation is the process of using technology to help a business run more efficiently while also adding additional value to a company. Some companies may choose to update their digital processes to make data sharing more accessible, while others may choose to use technology to create new products or services. Digital transformation is one of the most common forms of business transformation and it's one that all businesses would find necessary for their continued success in the ever-increasing technological world.

Cultural transformation

Cultural transformation is one of the most difficult transformations for a business, as it usually involves difficult and organic changes to the company's day-to-day operations. Because corporate cultures shape themselves over time, the culture can be difficult to change. If an employee doesn't feel like they're being valued or dislike the way the company works, this may result in a loss in morale or productivity. There's a strong alignment between a company's culture and its entire business system, so it can be incredibly difficult to change. Therefore, a strong vision is important to achieving a rewarding company culture.

Related: Strategies for effective administrative management

How to implement business transformation

Business transformation strategies can be difficult to create, as they usually encompass many different goals, timelines and budgets. There are some common steps you can take to implement a business transformation strategy, which include:

1. Create clear goals

The most important part of any strategy is to first set out clear, defined goals that you want to achieve. Consider writing these down and letting all the employees in the business know about these goals. Make sure that each goal is achievable and that there's alignment with your colleagues about the process by which you can achieve them.

2. Identify the necessary capabilities.

Once you have clearly defined your desired goals, you can then see the different capabilities and requirements that are necessary to achieve these strategic goals. Here are some of the different capabilities that you can consider:

  • Mission: This is the why and how of the strategy.

  • Insights: This is how you compile the communications and data for the strategy, including the data you can use to drive your strategic decisions.

  • Integration: This refers to the rules and regulations that are necessary to follow to succeed with your strategy, including who has decision-making responsibility.

  • Technology: The technology capabilities of a strategy are the requirements that help you achieve your goals in terms of software and hardware.

  • Processes: This refers to all of the processes that are necessary for you to achieve your desired outcomes.

  • Talent: This capability refers to the requirements you need from the existing staff in the business plus any other employees that you may wish to hire to complete the business transformation.

3. Train the team

Once you acquire all of the capabilities and tools to complete a business transformation successfully, you can then inform your team members about the changes that may be occurring. A dedicated team is a key to success in any business transformation, so the involvement of employees with almost every aspect of the transformation is very important. To ensure the success of the business transformation, it's important to assign the role of a programme manager, as they can ensure the day-to-day management of the entire project.

Regularly hold meetings with your team members to ensure that they all have a clear understanding of what's going on. Regular meetings help you learn about the opinions and ideas of your team members, as they may have interesting thoughts about how the business can update its systems to achieve its goals faster. It can also be good for team morale for all of the team members to feel they have direct input to the impending changes to the company's culture.

Related: 11 effective recruitment strategies for attracting top talent

4. Implement the strategy

Once you successfully outline your goals, create your strategies and ensure that you have the right staff for the strategy, you can then implement your business plan. Note that many business transformation strategies take a significant amount of time and effort. Therefore, make sure you regularly check that the business is making the right progress. If you can easily see the process occurring, it's a sign that your business is progressing well and that your business transformation strategy is working.

If you notice that the business is not transforming as fast as you'd like it to, this isn't necessarily a sign of failure, as many business transformation strategies take years to succeed. If the progress isn't occurring at all, it may suggest that it's necessary to change your strategy to see a transformation. It's important to remember that effective change can take considerable time to implement, particularly in a larger organisation with an ingrained company culture.

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