The Top 5 Business Transformation Challenges and How to Overcome Them

Although often desperately needed, business transformation is a daunting and messy process. Even with the best intentions, companies try to implement organization-wide change but encounter several complex issues that hold up the process. Business and digital transformation initiatives are more than an IT investment; they are one of the top priorities across all C-suite teams and global leadership. 

Transformation is about innovation, radical redesign, and reengineering - not documenting and automating existing processes. Failure is inevitable if you don't have a clear vision and process workflows for all the people and technology elements of the business transformation effort.

Artifacts become dated. Employees get confused. All the hard work focused on the initiative is lost, and helpful documents are underutilized and are not used to prioritize projects. It's critical to counteract these obstacles from the start but to do that, you have to know two things: 1) the real business transformation challenges you will face and 2) the root of the problem.

In this guide, we dive deep into leaders' top 5 strategic business transformation challenges and explain proven methods to overcome them.

1. Myopic Focus on Technology

While it may sound counterintuitive, digital business transformation is not about technology alone. Regardless of their technical maturity, any business is a group of people executing processes to deliver value to a customer. Technology enables the workforce to provide better value, or products and services, to these customers. When implementing new technology to support business transformation, remember the point of that technology in the first place.

Make sure that when systems are procured and implemented, your primary objectives are well understood and that only projects are funded if the value created is explicitly understood by everyone involved.

2. Employee Preferences and Resistance to Change

At their core, businesses are human. And as a collective, sometimes we have difficulty dealing with change. Business transformation is the art of changing a company to improve its competitiveness and give it an edge in the market. Unless AI runs your business with no influence or collaboration with your workforce, you must understand that any transformation must make sense for your employees. Organizational change management is specifically designed to help employees adopt changes driven by business transformation.

Remember the needs of the employee when implementing any new system. They are human and will struggle with change. Give them a chance to understand and get familiar with their new technology and enabling processes. Don't forget that change takes time!

3. Unfamiliarity with Innovation

Suppose the whole point of business transformation is to radically change the business to improve the customer experience or increase value and profitability. Why would you continue to do the same processes that got you to where you are today? Remembering that people don't like change, leadership can often take shelter behind what is "tried and true," defeating the transformation's purpose.

Technology can be configured to do just about any workflow or process a business wants it to do; it doesn't mean it should be configured that way. We call this "paving the cow path." Modern systems have capabilities far beyond what most of us think when designing our processes. We don't know what we don't know. Additionally, many cloud-enabled SaaS companies have extensive customer communities where ideas can be shared, and other organizations can adopt best practices.

When procuring technology to enable your digital business transformation, remember that old processes may not be the best value-based option, given the capabilities of modern systems. It's highly likely that since your business' technology was originally implemented, technology capabilities have evolved.
Look to vendors to show you better processes that their platforms uniquely deliver and how those processes can provide your organization tremendous value. Identifying the right vendors can be daunting, so be sure to work with a trusted advisor through this selection process.

4. Delegation and Management

Business transformation initiatives are unique projects. They often cut across the entire organization and impact many employees. Standard Project Management Offices (PMOs) may need help with a 'project' that is so complex and multifaceted. The truth is a business transformation initiative cannot be pawned off on the PMO and is expected to be a success. It must be sponsored and enabled from the very top of the organization. Project and portfolio managers can handle specific pieces of the initiative, say the delivery or a widget, but alignment and goals must be handled at the C-suite level.

Understanding each functional group's role in creating value across the organization is critical to realizing the true power of business transformation. A significant improvement in product delivery speed doesn't matter unless Accounts Receivable can keep pace. Similarly, if you improve your time to hire new candidates, but your onboarding process still takes twice as long as it should, the transformation hasn't been truly effective.

PMOs must play a role in helping them organize and manage. Still, executives ultimately own these transformation initiatives and look across their entire organization to ensure they optimize the transformation ROI.

5. Aligning Priorities and Goals

Every successful business transformation starts with two questions: how do you initiate business transformation? And why are you looking to transform your business in the first place?
In 1965, the average lifecycle of a business listed on the S&P 500 was 32 years. As of 2020, the average lifecycle of an S&P 500 business was 21 years, and the cycle continues to shorten. The need to transform operations is an essential reality of business today.

Understanding what to focus on when undertaking a business transformation initiative is a critical step in determining your path forward. Most organizations need help prioritizing which initiative to launch first because they view their organization as a sum of its parts rather than a whole. This pits departments against each other, and the question becomes: should we fund a learning and development initiative or procure a new technology?

By using a process model and heat mapping, organizations can visualize the cross-functional value creation of their business as well as score the performance of their people, process, and technology in each step of the process. Effectively, executives can create a color-coded roadmap of where they should invest their time and money as they plan and execute their transformation and communicate those plans to departments to improve transparency and priority alignment.

Designing and managing a business transformation strategy can be quite the undertaking if you don't know your challenges. With the proper knowledge about what is to come throughout a business transformation, stakeholders can collaboratively define and align their organization effectively.
To talk with an expert for help on overcoming your business transformation challenge, contact Accelare.