What is business process transformation?

Business process transformation is a long-term change management process that is driven by the external pressure to adapt to new conditions and requirements and meet business goals. It involves radical changes to business processes and must be aligned with company strategy. This external pressure for transformation and permanent change is as high as ever before, accelerated by the COVID-19 crisis and the demand for digitalization. New models for hybrid working and supply chains have never been more important than now.

What is the business process transformation process?

Business process transformation programs involve the complete TRANSFORM-OPTIMIZE-CONTROL cycle from defining the strategy and rethinking ways of working to supporting execution and monitoring the results.

1. Transformation Companies often struggle to adapt their business model in response to industry disruption (“Doing the right things”). The world is changing faster than ever before and in today’s dynamic digital landscape, past success is not a successful predictor of future results. To survive, companies need to continuously align their business model to new challenges. But how can companies connect the strategic business model with the operating model?
2. Optimization Businesses struggle to drive efficiencies in processes and find new ways of working (“Doing the things right”). Many transformation and change initiatives are failing because the human factor is underestimated while change management and adoption constitute 80% of the project success or failure. Employees don’t understand the “Way of working” or their specific role since there is no role-specific enablement (with work instructions, guidelines and policies) that supports collaborative cooperation across the organization.
3. Control Businesses struggle to efficiently measure, monitor and manage the business processes and (strategic and compliance) requirements. Decision-makers don’t have an overview of actual performance (do processes run as planned?) or status of compliance and risk mitigation measures. This means they can’t react immediately or capture and analyze data that would inform further optimization.

What is driving the demand for business process transformation?

Global spend on digital maturity initiatives and transformation programs will reach two trillion dollars by 2022. But 80% of the digital revenues are earned up by the best-performing 10% of companies. Being in the midfield is no longer a good option in the future. Also, many transformation initiatives are failing because of the inability to set up a continuous optimization cycle, and because employees don’t understand the “Way of working”. McKinsey mentioned that 70% of the past investments were wasted on failed programs and among those that didn’t fail outright, only 16% saw improvements in their performance.

To be successful, companies need to be mission-driven and translate strategy into an operating model to achieve high operational excellence with an adapted business model in a short time. But what many companies are finding is that transforming is more than just defining a new strategy. It requires an operating vision–i.e. how you want to run your business—while keeping pace with the speed of the market and the innovation of competitors. The result is an ability to fulfill customers’ increasing expectations, comply with changing regulations and easily secure high-quality, transparent operations.