Business Transformation Components - Term Paper Example

BUSINESS TRANSFORMATION COMPONENTS, META MANAGEMENT By (Name) Course Instructor’s name: Name of the school: Location: Date: The business environment is fast changing, necessitating businesses to rethink about possible market shifts and make earlier adjustments before their immediate competitors edge them out. Such counteractive action starts by business leaders assessing their present business environment to derive a deeper understanding. This can be done in different process levels such as input, interpretation, strategy, prospection and analysis. Some of the indicative methods that can be used to derive meaningful interpretations include environmental scanning and Delphi methods used to interpret new environmental input; causal layered analysis and systems thinking intended to carry out analysis of the business environment; and strategic planning and positioning meant to draw up business strategy. Other methods include visioning, scenario planning and back casting intended for prospection purposes; and trend analysis meant to analyze the business environment. Scenario planning help organizations to adopt a strategic position to counter future uncertainties. Even though an organization’s future can never be fully predicted due to systemic risk that may affect the whole industry, scenario planning can still offer reliable guide into the future. It has three prediction options- the plausible future, the probable future and the preferable future. Notably, there is need to factor in disruption when making assumptions that past trends would predict the future. By attempting to create the future, a business can make effective predictions. This can be done by constituting a panel of experts to work on a specific focus area. A working team would form a snapshot vision for the business status in a specific future year by studying the internal factors and possible ways of leveraging on them (Jeston and Nelis, 2014, p. 66). They would also consider other factors like new technology, business stakeholders and existing competition. In the process, they would be able to create a vision for the business. The vision would then influence other decisions for the business such as the desired milestones, the specific actions that the business can take to realize its goals, the timeframes for implementing such strategic action and indicators that would show that the business is actually moving in the desired direction. Suppose the panel of experts make a move to establish at least three viable action paths towards the vision and they define the core competencies and capabilities needed to realize the vision, they will end up with feasible action plans to give the business some strategic direction (Smith and Fingar, 2003, p.17). Identifying the future may involve creating hypothetical scenarios by combining different environmental alternatives and using probability to narrow down on the scenarios most likely to occur. Caution should be taken in order to avoid the best-case scenarios as they may cause an optimistic perception that might turn out to be misleading in the end. For each scenario, the team proceeds to examine the possible pathways to follow in order to realize the vision. Scenario planning are efficient tools that help businesses to manage the large information overload by giving an option for the managers to focus on the present trends and uncertainties, as these are the drivers of change in the business environment. Scenarios combine different trends to ascertain their effect on the final vision. Some foresight techniques that can be used in scenario planning include trend projection, business scanning, consultation, trend monitoring, scenario development, simulations, historical analysis and brainstorming (Stulz, 1996, p.19). Business managers need to be proactive in handling the aspect of change in their business. This can be done by using varied change management tools such as the Kotter’s eight stage process. The first step in the process involves creating some sense of urgency for the intended change so as to prepare the stakeholders to cooperate in implementing the planned change. The leadership would then form a committee of experts to guide the change process. Implementing specific aspects of the change would need to align to some clear vision and strategy. Therefore, the committee would be tasked with formulating the vision for the change and the strategy of implementing it (Bititci, Suwignjo, and Carrie, 2001, p. 21). With a clear vision in place, the committee would then set out to communicate the vision to all the stakeholders that would be affected by the change. This way, everyone involved in the change process would understand the rationale behind it. The organization would then need to empower the specific change initiatives through budgetary and personnel allocation. This might involve a wide range of activities intended to effect the envisioned change. As the committee implements the intended change, there is need to formulate short-term win situations to serve as a basis for evaluating the progress of implementation. The next stage involves harmonizing the gains made in the process and facilitating further incremental change. Thereafter, the leadership should guide other organization stakeholders to adopt a new workplace culture that matches the ideals of the changed organization (Bititci, Suwignjo, and Carrie, 2001, p. 18). Some of the merit areas for market leaders in any industry include operational excellence, customer intimacy and product leadership. Organizations can achieve operational excellence by instituting and enforcing operating procedures, improving their product distribution systems, developing a predictable culture and having a strong authority that is centralized and clear in definition of responsibility. By scoring high on these operational aspects, an organization would be poised to compete effectively with rivals in the industry. To attain product leadership, managers can consider rewarding innovative employees, nurturing novice ideas and incorporating them into their product, creating a culture that encourages experimentation of new ideas and operating under flexible organizational structures to accommodate change. This approach would serve to improve the product standing in the market. It is also in the best interest of an organization to develop an intimate relationship with its customers. This can be done by striking a trade-off between production costs and the need to secure customer loyalty. The product development should also remain flexible to factor in the customers’ interests. In the end, this flexibility would take product empowerment closer to the customers. Pricing captures the cost incurred in creating a product. It also shapes the customers’ perception of the value accrued in purchasing a given product. If they are satisfied with the product value and the pricing, they then become loyal customers. This would make them more willing to pay for the added cost beyond the cost of basic production. Importantly, any organization would spend less to maintain their loyal customers because their preferences are already known. They also provide reliable sales returns for the organization. According to Porter’s theory of industry attractiveness, several factors shape the investors’ perception and decision to invest in a given industry. The factors include existent barriers for entry into a particular industry, the bargaining power held by suppliers and buyers, availability of substitutes, and the threat of new entrants. Meta management may be defined as a comprehensive, business oriented and value driven approach to organizational management. It includes the management of different aspects such as risk, strategy, business process, value, transformational informational systems, training and competence, projects, and organizational change. Meta management integrates the management of all these dimensions in one holistic approach. It involves envisioning the desired goals, engaging stakeholders, effecting transformation and optimizing the organization’s goals. The transformation process can go on smoothly if there is proper assignment of roles during the transformation process, the leadership secures stakeholder commitment, and the change is well communicated to the stakeholders. Managers need to understand that business transformation is a recursive and iterative process that may be undertaken several times during an organization’s lifetime. It starts with an envisioning phase that creates a case explaining why change is needed (Thiry, 1997, p. 74). Here, the vision and strategy are laid out. The organizational leadership needs increased creativity, enhanced foresight and competent analytical capability in order to recognize why business transformation is needed. The next step involves engaging people by empowering them to realize the change vision. Detailed planning is required in this phase in order to realize understand what exactly needs to be done. Finite and clear projects are drawn out at this stage. In the next phase, the transformation is implemented. The values, organizational culture, technologies and processes undergo incremental transformation (Grover, 1999, p. 63). Perhaps the organization would expect to have new business relationships, processes and units after the transformation. The stakeholders need to understand the change and commit to it in order to realize far-reaching change. In the final phase, the realized changes are optimized by instituting them into the organization’s normal operations. The organization should create stability by internalizing the gains made in the change process. In the Meta management approach, a transformation manager plays a critical role in the realization of change. Communication during business transformation management occurs along three tiers. The first tier is directed to those stakeholders imminently affected by the business transformation. An example may be the case where some shared service center affects internal working arrangements within a department. The second tier of communication should be intended for persons directly affected by business transformations such as the change of basic business processes. The third tier should target the people who are indirectly affected by the transformation, such as the organization’s customers (Thiry, 1997, p. 54). Some of the necessary communication principles during business transformation include empathy, appreciation and openness. There should also be some autonomy, a sense of belonging and competence among the stakeholders, especially the employees. Strategy management involves establishing business factors that are critical for transformation and the various options that can be used to implement them. It may also be helpful to establish the impact that a given business transformation will leave on the market value chain. This will help an organization to determine areas to develop their competitive edge, adopt the necessary strategic technology, seek strategic partners, develop strategic business models and take strategic risks to realize the organization’s goals. The strategy that is developed in the envision stage is deployed and evaluated in subsequent stages. Developing a business transformation strategy passes through clear stages, starting from project inception followed by data collection to capture the “as-is” state of the business organization. The data is then analyzed to identify the business transformation causes and needs. This would help in the designing of a clear business vision and model. The final step involves the creation of an integrated transformation plan. Business vision serves as a yardstick on which the achievement of business goals are pegged. The current performance can also be aligned to the business vision. Vision creates meaning for work, guides action and boosts the morale of people involved in the business. In comparison, the business mission spells out how to do things in the organization. It is normally driven by stakeholder expectations. Value management involves maintaining product aspects that appeal to the customers. It starts right from value proposition, maintenance of sales channels, managing costs, building customer relationships, managing revenue and key resources- finance, personnel, intelligence, and assets, running key activities- production, networking, consultancy, and managing key relationships such as partnerships and buyer/supplier relationships. Customers often perceive the value of a company’s product from its pricing. The price also captures costs incurred for the product such as logistics, storage, claims, materials, machine maintenance and labor. When pricing, it is important to understand that the product price can only go as high as differentiation can support. Even as business firms try to increase their revenue through pricing, they price charged should make the consumer to feel that they actually acquired some perceived benefit. This is defined in marketing terms as value pricing. Business firms are established to develop products for the customers in the market. It therefore makes sense that organizations interact with their customers as some worthy lifetime investments (Kettinger and Grover, 1995, p.17). Firms should also strive to maintain some sustained competitive advantage through differentiation and proper product positioning. During business transformation, different interest groups within the business organization normally ask what gains they would derive from the transformation process, creating a benefits dependency network (Grover, 1999, p.39) Risk management defines all the effort directed at addressing the risks that arise during the business transformation process. It involves risk identification, risk analysis, risk response planning, execution of the risk response plans, and evaluation of the risks to determine the effectiveness of countermeasures. Some examples of systemic risk include strategic risks -often associated with the organization’s strategy, and operational risks/project risks. To improve the management of risk, there is need to improve the capabilities for the business to identify and evaluate the risks (Wang, 2000, p.456). The other measure might involve enhancing the levels of accountability in business units. This would increase the chances of business success, especially when an explicit policy is put in place to identify risks beforehand. The perception of the risk can be done by analyzing the trends in different aspects of the business. Thereafter, the managers should develop a risk portfolio that captures the probability of occurrence for every risk, the severity of impact for every risk, and the risk response plan. This would allow them to assign accountability for every risk to specific stakeholders (Asif, Joost de Bruijn, Fisscher, and Searcy, 2010, p.574). Business process management still follows the standard iterative approach for business transformation- envision, engage, transform and optimize. Processes define the operations within an organization. They often take time, costs and various inputs; but act collectively to deliver the product. Business processes are integrative in nature. Essentially, business process management entails aligning information technology, tasks and people to generate value (Doppelt, 2009, p.77). Process maturity levels such as the Capability Maturity Model, Kerzner’s project management maturity, Innovation capability maturity model, Armstrong’s maturity model, and the Six Sigma are used to determine the level of effectiveness and maturity for the whole business process (Khalil and Wang, 2002., p.131). Process portfolios can be developed to serve as a basis for assigning priority to different activities meant to improve business processes. Several process modelling languages can be used in business process management. They include Event driven process chain (EDPC), ARIS framework, and Business Process Modelling Notation. The performance in the processes can be measured by designing a process matrix. Other aspects of Meta management include lean processes, innovation, business models, transformative information technology management, business architecture, organizational change management, and business architecture. List of References Asif, M., Joost de Bruijn, E., Fisscher, O. A., and Searcy, C., 2010. Meta-management of integration of management systems. The TQM Journal, 22(6), 570-582. Bititci, U. S., Suwignjo, P., and Carrie, A. S., 2001. Strategy management through quantitative modelling of performance measurement systems. International Journal of production economics, 69(1), 15-22. Doppelt, B., 2009. Leading Change Toward Sustainability-: A Change-Management Guide for Business, Government and Civil Society. Greenleaf Publishing. Grover, V., 1999. From business reengineering to business process change management: a longitudinal study of trends and practices. Engineering Management, IEEE Transactions on, 46(1), 36-46. Jeston, J., and Nelis, J., 2014. Business process management. Routledge. Kettinger, W. J., and Grover, V., 1995. Special section: toward a theory of business process change management. Journal of Management Information Systems, 9-30. Khalil, O., and Wang, S., 2002. Information technology enabled meta-management for virtual organizations. International Journal of Production Economics, 75(1), 127-134. Thiry, M., 1997. A framework for value management practice. Project Management Institute. Smith, H., and Fingar, P., 2003. Business process management: the third wave (Vol. 1). Tampa: Meghan-Kiffer Press. Stulz, R. M., 1996. Rethinking risk management. Journal of applied corporate finance, 9(3), 8-25. Wang, S., 2000. Meta-management of virtual organizations: toward information technology support. Internet Research, 10(5), 451-459. Read More