Business transformation is a phrase used for describing what happens when a company fundamentally changes its operations. Earlier, Anand Jayapalan had mentioned that the goal of business transformation usually is to enhance the financial and operational performance of a company. This transformation may take place at an organizational level or even within a certain product group or department.
Business transformation is often necessary for a company in order to reach its goals. Here are some of the major benefits of business transformation:
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Organizational alignment:
Defining and communicating the strategic priorities of a company is important for ensuring the effectiveness of business transformation. This begins with identifying discerning long-term breakthrough objectives that may impact the trajectory of a company to a major extent. Such “big” goals tend to be broken down into annual goals and specific opportunities for improvement that make change possible. Equipped with this insight, business leaders will be in a better position to provide employees with performance goals that align with the strategy. Decision making at a company invariably improves when priorities are clear.
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Employee engagement:
True business transformation majorly depends on employees identifying opportunities for improvement and subsequently implementing them. Even though change often begins with leadership, the real work happens at the operational level. When employees take ownership of their tasks, they would be more motivated to invest extra effort in solving issues and exploring innovative ideas.
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Agility:
If companies are consistently willing to engage in business transformation, they are likely to be better positioned to react to changing conditions or leverage new opportunities. Employees who are well-versed with the principles of continuous improvement are better prepared to respond to disruption. They are also more likely to be helpful in decision-making.
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Happy customers:
Customer satisfaction is an important factor in driving business transformation. Every change, regardless of its size, should be evaluated for its impact on the customer. Large companies typically assess the value of their products and services from the perspective of the customers and conduct research to ensure their transformation efforts align with customer needs and preferences.
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Leadership skills:
A strategic and proactive approach is necessary for true business transformation. Business managers must have a good understanding of how the work of their functional area impacts the overall transformation goals and strategic objectives of a company. They tend to become more efficient at setting priorities over time, engage in change and coach others to continuously improve.
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Cross-functional collaboration:
It is common for varying teams, departments and functional areas of a company to have conflicting objectives and priorities. This issue gets worse when there is no central way of communicating and managing improvement activities. A level of transparency and communication is needed for business transformation, in order to break down silos and rally everyone around the annual and long-term goals. Today a variety of new-age tools and technologies are used to bolster cross-functional collaboration.
Earlier, Anand Jayapalan had discussed that business transformation that puts emphasis on process improvement provides an opportunity to tackle the root causes of product quality issues. Rather than applying temporary fixes to current problems, the focus shifts to understanding the purpose and expected outcomes of each process step. Just achieving production goals at any cost will not lead to lasting change; however, analysing root causes and implementing structured improvements can go a long way in driving meaningful progress.