Business process transformation can be quite an uphill battle for some — after all, your company is entering a completely new stage, and adapting can be challenging. But the good news is that it’s not impossible. Analyze your reasons, find a trustable process transformation partner, create a detailed plan and stick to it.
Believe it or not, you’ll be amazed by the results. Continue reading to learn why and how to adopt a successful business process transformation model to stay on top of the game.
What Is Business Process Transformation?
Business process transformation is a long-lasting change management process caused by the need to adapt to new conditions while meeting core business objectives. It entails crucial changes to corporate operations and should be consistent with the company strategy. These changes are usually focused on digital transformation. In the future economy, only inventive businesses will survive. Due to the slow rate of transition, traditional businesses will be replaced from the market by new competitors who are flexible, customer-oriented, rapid, brave, and innovative.
For example, Amazon has altered the way people read books. The business began as an online bookstore (of physical books). Then the firm invented the e-book reader, and the demand for physical ones vanished (at least for their customers). You no longer need to visit their website because the Alexa voice assistant can accept your order merely by listening to you.
Spotify developed a whole new business strategy to combat piracy. When the service launched, people started enjoying their favorite music for free. However, because these sales were small, the company created a freemium business model consisting of a free stripped-down version and a complete version available for a subscription. This allowed consumers to listen to a large amount of music for a little charge and eliminated the need to look for unauthorized versions of songs. Currently, both Netflix and Amazon use a freemium approach.
Why Should Organizations Care About Business Process Transformation?
Your company’s internal and external business processes deteriorate as it grows and expands, especially if you’ve opened multiple locations or outsourced some of the labor. By changing, you’ll manage to simplify your procedures and acquire a better picture of how your organization runs.
In order to satisfy consumer needs, it is not enough to just transform the existing company processes. In essence, you need to recreate it, which includes minimizing the stages and paperwork involved. Plus, you should automate decision-making and problem-solving processes.
Business operations involving information can be digitized to achieve several advantages, including cost reductions of 90% and turnaround times that are hundreds of times faster. One bank, for instance, cut the time required for the pre-approval of loans from several days to only one minute. Another example is a shoe business that has created a digital platform that enables staff to check the availability of specific styles and sizes of footwear. This saved both the company and customers a lot of time.
Furthermore, by digitizing manual processes and paper documents, businesses will be able to collect data automatically, which can subsequently be utilized to increase efficiency, identify waste, and possible sources of danger. Also, the ability to monitor and generate reports in real-time assists managers in resolving issues before they become too critical to solve.
One of the fundamental ideas of business process transformation is that you should start from the end with the desired outcome and work your way backward. Instead of focusing on the shortcomings of the existing system, think about how each specific procedure would need to work. Once you have identified what you need, you can attempt to overcome the current constraints. The gradual digitalization of business operations can enhance productivity in three to five months, according to the global consulting firm McKinsey & Company.
Benefits of Business Process Transformation Model
High Possibility of Entering New Markets
A significant growth element is a hunt for additional outlets for the goods and services produced by both small and large businesses. And communication is critical when it comes to growing your business. The capacity to monitor in real time and use technology to track interactions with potential customers in a new market is essential to ROI. Furthermore, connecting with the target audience, whether an end client or a possible partner, necessitates a consistent online presence and the usage of many communication channels.
Leveraging digital transformation of corporate processes to access new markets involves new geographical areas and product and segment potential.
Increased Productivity Through Process Automation
Business process automation aims to reduce manual effort in repetitive operations, making them less prone to human error and freeing up resources for higher-level jobs that demand more creativity and abilities that a computer cannot mimic.
Automatic invoice payment and digital workflow are two examples of such digitization, in which many tasks (from filling out forms to mailing documents) can be automated. This includes electronic signatures of documents, where it is sufficient to designate the people required in the application. All participants will receive an email with a link, after which they can sign the document.
Business process transformation leads to significant cost savings. Companies that have entirely changed spend less on business-critical apps. Furthermore, they launch more IT projects while spending less than the anticipated budget. Plus, such firms are more likely to acquire contracts related to advanced digital transformations. After all, the option to invest fewer resources in innovative and successful enterprises is at stake.
Continuous Improvement of Business Processes and Customer Relationships
A company can become more stable and competitive through business process transformation by cutting wasteful expenses and expanding its ability to provide goods and services. However, it is crucial to integrate all business processes — from production to monitoring — into a single system to achieve the most remarkable results. For instance, monitoring customer interactions with a brand from the beginning until the point of purchase.
Business Process Transformation Steps
- Create an atmosphere of professional development;
- Create a powerful change team with the assistance of external industry experts;
- Establish the development vector and create a transformation program, prioritizing improvements based on their significance and the pace at which they will produce a beneficial effect;
- Promote a new vision and let your employees know what the transformation program’s primary outcomes are;
- Encourage staff members to take part in change at all levels;
- Display “short-term wins” and systematize the process of tracking the effectiveness of executed initiatives;
- Create a strategy for continuous improvement;
- Create an excellence-driven corporate culture.
Essentially, there are two critical stages to the business transformation process.
The first step is to diagnose and evaluate the present system as it currently operates within the enterprise. This stage is crucial since it’s at this point that the organization realizes the benefit it missed and discovers possible growth prospects.
The mapping of the process of added value production is a vital step in evaluating the current business system. Analysts should evaluate all business processes inside the organization to determine which stage the company contributes the most to the formulation of the value of its product or service and how much resources are spent on all existing processes. The company’s strategic goals and strategies, as well as its resources and market experience, are then examined.
The following section contains the company’s internal policies, such as the price and customer policy, employee motivation policy, and job performance indicator system. The transformation team should pay special attention to the company’s commercial system — marketing strategy, sales system, communication channels, and client attractiveness.
The analytical step is completed by diagnostics of the company’s information and management systems, paperwork, current regulations, and work norms. Finally, the actual management system of the organization becomes apparent — the management’s levers of influence on business processes, the system of performance evaluation, quality control, and decision-making.
Based on the data gathered in the first step, the second stage is the subsequent preparation for the change. First and foremost, you should evaluate the initiatives and strategies for transforming processes developed in the first stage. Then you should identify the most promising ones — that is, those that can achieve the most significant increase in efficiency with the least number of resources and the fewest risks.
Following that, once you have a list of such tasks, you should prioritize them using the same technique.
The most critical stage is the development of regulations and an assessment and control mechanism. The direct executors of business processes should strictly adhere to the outlined plan to ensure that the transformation proceeds as intended. For this, management should design a clear change regulation — each employee should understand what is happening and why, as well as his immediate obligations in this process.
How to Help Your Employees Change
People are hesitant to participate in the process if they need to understand why the changes occur. The primary job is to tell the organization’s personnel about the nature of the upcoming changes. It is vital to explain to employees why the changes are necessary and the potential implications if no adjustments are implemented. A person will only change when they want to.
How can I assist them with this? The best approach is to comprehend the benefits of future changes for every employee whose view we wish to alter and explain how the changes will influence their work. What will be different? You should pitch them on the personal benefits they will receive rather than the company. No “dry formulations” aimed at raising the company’s profit or accessing new markets will aid in joining the initiative. Your employees should be looking forward to change.
How to Help Your Team Change
Begin by establishing trust. The organization should be willing to share any information with its employees. This is required to demonstrate why the transformation is needed, where the company is, our competitors, what the customers think of us, and where they are headed. Trust is a critical component of engagement.
Once the team has agreed on the need for transformation, employees should build a framework of collaboration and communication. However, this system should become digital. Any tool like Trello, Asana, or Jira will do. At the same time, you should teach your staff to communicate about project difficulties within the system. Certain gamification aspects will begin to show at this stage. People will become involved in situations that spark their interest but fall outside their purview.
The following stage is mobility. There should be a conducive environment for creativity that is not limited to the office. People require independence, communication, collaboration, and adaptability.
Following that, new approaches to processes are introduced, such as Scrum/Agile systems, project teams are formed, and the intellectual component begins, i.e., individuals start to work rather than learn.
What New Skills Will Change Leaders Require to Succeed in the New Reality
When implementing any changes, you will confront significant resistance to change and need to learn to manage a program of related tasks and communications under high unpredictability. To do so, change leaders have to be thoroughly knowledgeable in the field of change management. Any transformation or change influences employees’ work. Thus, the capacity to handle the human side of change will be beneficial in achieving the desired result and can improve the project’s success. The change leader should also understand the Lean philosophy to assist the organization in transforming faster, without redundant processes, while producing value for internal and external customers and involving employees in the continuous improvement process.
To sum up, business process transformation at the company level represents a wide range of technological, cultural, and organizational changes leading to increased internal efficiency and greater sensitivity to external incentives. Therefore, it is not just about providing tools and technologies but about profound changes in the business processes of companies, in the creation of new organizational and management structures in the production chain or in the service offering, as well as new ways of managing human resources. Let’s talk and discuss how we can help.