For companies that don’t want merely to succeed in their industries but to lead them, continual business transformation is a must. With 93% of U.S. companies in some phase of changing their business model, according to recent research by consulting firm KPMG, businesses that aren’t thinking about transformation are all but irrelevant. Business transformation can mean everything from a major shift in IT systems to a large-scale innovative construction project or changes to business models and product designs. Similarly, the drivers of transformation vary widely, ranging from the increased globalization of markets in all industries to shifting energy prices to consumer expectations of constant innovation.
This paper looks at what tends to drive business transformation initiatives both internally and externally for a company, and what determines the success or failure of such initiatives. It also reveals how companies execute business transformation and the value a well-executed initiative can deliver.
According to an Oracle/Forbes Insights survey of 534 global executives, 35% say they believe the need to transform is accelerating, and 82% cite the need for innovation as a major driver of business transformation. For most, business transformation doesn’t mean just a one-time, enterprise-wide overhaul, either. Eighty-six percent of respondents say their organization should execute a business transformation initiative regularly to stay competitive and relevant. Meanwhile, just 40% say their industry needs continuous business transformation. In other words, executives believe their organizations need to change ahead of their industry in order to stay relevant.
“Especially if you are a company of our size, you have to be constantly moving to stay in the frontline,” says Pierre Olofsson, business unit president in Sweden for global construction company Skanska. “There are always new inventions and technology in construction that you have to evaluate, the market is changing with new competitors and customers, and today’s young talent has different expectations of their employers than the previous generation.”
But despite agreement among most global executives that business transformation is fundamental to success, 48% of executives believe their organization is only somewhat or not at all prepared to successfully execute a business transformation today.
