Business Transformation (BT) is the creative destruction of current business models and replacement with new to attain order of magnitude improvements in the business. Its objective is not incremental improvement/s. While some may argue that a series of incremental improvements might lead to a big leap, business transformation requires a serious re-think of the entire model and drastic changes along the entire continuum.
All of this starts with a vision – what does an organization aspire to? The vision should be communicated well and often, and the follow-on is the mission, plan, and execution towards the vision. BT is about vision as well, to transform and aspire to a certain state, break existing business moulds, or leapfrog competitors.
It requires courage to start discussing transformation and more so to execute it. We all like to remain in our comfort zones – products are being shipped, claims are being paid- so why bother with any of this? How is this to be broached at the executive level and to the rank-and-file at the operating level? The courage to do this comes from deep inside where we know improve we must and that status quo is a killer, change is in the business, and drastic change is a competitive advantage. And it takes courage to get into the weeds of the business to really understand the operational aspects and impacts of a potential transformation and how to do it.
Any vision without a proper execution plan stays as vision and never reaches reality. This is where the people aspect comes into play; the more stretch the goals, the stronger the need for stretchable people. Talented people with the ability to get things done, learning from failures, moving on and up, while never losing sight of the goal.
As an example, in discrete goods manufacturing, we need to design, order release, make, and ship products to either a distribution center (DC) or directly to a customer. The current process is spreadsheet driven – aggregated monthly demands are manually balanced against “due at dock” date, the order release spreadsheets are sent to a manufacturing facilities. At each facility, demand planner assigned by product lines, manually generate the daily production orders to the floor. At any given time there are stacks of individual work orders lying at the printers in the demand planning area, waiting to be manually transported to the production floor. How difficult is it for the chastened demand planner or manufacturing manager to control the flow and satisfy the delivery dates? Very very difficult and often a reality in 2015.
What would transformation look like here? An ERP type demand planning module can receive near real-time worldwide sales information, balance that against current store inventory, inventory in transit, inventory at the DC, WIP inventory, and generate finished product demand – not exactly a pure pull model but close. This information can be passed on to the individual workstations where operators can view the work order. Scheduling is done by automatically adjusting for staff skills, work requirements, and staff availability and capacity. Vendors can also be pulled into this work distribution. Very difficult but entirely doable in 2015.
Here is another example from the service side. The overarching priority in healthcare claims processing is to process claims quickly and efficiently for timely payment. The claim is paid to a provider for a healthcare benefit service rendered to a subscribing member. A member (or client) benefit set-up is the first step in this process after a healthcare insurance package is selected by a company or individual. This set-up process can be very complex and manual. Once the set-up is complete, IT systems need coding and validation against enrollment and claims demographics. In many situations, there are multiple hand-offs, manual data entry, and resulting errors. A transformation would be to automate the front-end benefit set-up process, followed by seamless benefit coding, validation, and finally claims processing. This is quite an undertaking but doable and is business transformation because it requires vision, talent, and execution.
What does it take to achieve the above: a vision to reach there, courage to face reality, make the case and win the support, build, and execute the plan. The organization structure will need to be re-thought as work type and skill requirements will change, un/necessary talent changed. And, obviously, obstacles will have to overcome with courage and persistence.
The above is solely my professional and experiential opinion and unconnected with workplace events. This article was originally published in Linkedin.