Business transformation is quite a broad term that involves making fundamental changes in an organization. This change may involve digital, cultural, and operational processes. Earlier, Anand Jayapalan had mentioned that the goals of business transformation can be varied, ranging from ensuring customer satisfaction to lowering business expenses.
Business transformation can be of multiple types. Digital business transformation, for instance, helps companies to adopt and integrate advanced digital technology with the aim of reinventing products or services, improving the customer experience, and driving efficiencies across the organization. On the other hand, business model transformation makes organizations rethink how value is delivered to customers, and helps open up new growth opportunities. Business model transformation may involve innovating strategic business goals, introducing new products or services, changing pricing models, as well as expanding into new markets. Certain companies may even require cultural and organizational transformation, which requires them to encourage collaboration, rethink organizational frameworks and foster a culture that embraces transformation initiatives. Regardless of the specific objective of the transformation process, it can essentially provide a competitive edge to the company and help it to become efficient.
Due to the constant change and advancements in the business landscape of today, a company may have to undergo business transformation for a number of reasons. While the core drivers of these transformations might stay the same over time, in many instances, they tend to be driven by a combination of multiple factors.
Top drivers of business transformation include:
- Technological advancements: New-age technologies can effectively help a business to scale, competently support the customers and drive efficiencies. Companies that do not adapt to new age technological advancements are likely to fall behind and lose business relevance.
- Market shifts and changing customer needs: To boost revenue and improve customer experience, it becomes vital for businesses to identify new ways to adapt their business model, products, or services as per changing market conditions and customer requirements. For instance, many restaurants and retailers online ordering or curbside pickup options at the height of COVID-19 restrictions to make up for lost in-person revenue. Many businesses continued to provide these facilities after the restrictions were lifted, in order to cater to the customer expectations and maintain an additional revenue stream.
- Competition and industry disruptions: Analyzing the market competition on a regular basis and changing strategies as per its accordance can help a business to not only stay ahead of the competition, but also capture additional market share. Some of the most common competitive and industry disruptions that a business should track include mergers and acquisitions, updated business models or pricing strategies, as well as brand new product or service offerings.
Earlier, Anand Jayapalan had mentioned that in addition to the pointers discussed above, even new or updated laws and regulations may require companies to transform their business processes and operations. Doing so becomes vital for companies to maintain compliance and remain competitive. Regulatory changes can also be a driver of business transformation if a company wants to expand its geographic footprint. After all, to expand its market, a company has to adapt to local regulations, cultural differences, and the needs of the target audience, among other factors.
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