Business Transformation: What is It Exactly?

ERP discussions include Business Transformation at an increasing rate. Transformation may sound impressive – or more than you want. So what exactly does Business Transformation entail?

Google Business Transformation, and you’ll get approximately 13.6 million results. That’s a potentially hairy place to start for answers because any given company will give you its definition.

Some companies view it as Change Management, using Business Transformation as the term to simply align their people, processes, and technology. The Harvard Business Review offers a better breakdown of the definition. It states Business Transformation can be broken down into 3 categories: operational, meaning using new technology to solve old problems; operational model, which focuses on changing a business at its core and running a business in a fundamentally different way than before; and finally strategic, which involves changing ‘the very essence of a company.’ To fully summarize the HBR article, the author suggests combining the transformation types and carefully implementing them to maximize business change.

So, are these different definitions helpful? Which version makes the most sense? I would argue, and certainly, the approach we take here, that Business Transformation means making significant changes to your business in whatever form makes sense to move your business not just forward but to the next level and beyond.

That may be a long sentence, but the truth is that business transformation isn’t short. It takes a full explanation and a very detailed and thoughtful vision from leadership to design and accomplish. The shortest answer I can offer you is that it involves all three core elements in your company: people, processes, and technology. ERP replacement alone does not Business Transformation make. Neither do Change Management classes or an update to your processes.

Nothing is accomplished in isolation. True Business Transformation must be defined by you to fit your business. The key elements to address first are based on the answers to questions such as this:

  • Is our company agile and efficient? Can we change to meet customer demands in a timely and efficient manner to be competitive?

  • Do we know where we want the company to go into the future? Do you want to keep your core product or service (or both) the same, and if not, how do we want to change this?

  • How well do our people, processes, and technology work currently to help accomplish future goals, and where are there inefficiencies, gaps, or voids?

By defining strategic goals and analyzing how this compares to where you are now you are positioning your company for your best definition of business transformation. If you are looking to make more than an update or upgrade to people or processes or technology, then the mindset of transformation is the best way to define and make this an actionable event.

So, in the end, what does Business Transformation mean? Take away the noise and ask yourself this: what do I need to do to be competitive and successful in the future? What are the core strategic goals for our company in the next 5-10 years and beyond? And finally, how do we get there?

Your definition of Business Transformation will come in the answer. Make meaningful and strategic changes to your people, processes, and technology as a whole, and Business Transformation will no longer be an elusive term but your roadmap into your business’s future. What should come next will be in the discussion next week.