Identifying the Transformation Program in an Organization - Case Study Example

Transformation Programs By student’s name Course code+ name Professor’s name University name City, state Date of submission Introduction The transformation or change in an organization is as a result of several factors such as, ecological processes and more so competition, the institutional process of legitimization and government policies. The management of the organization will, therefore, respond to the external factors and begin to effect programs meant to transform the company or organization (Ning 2012, 5). The transformation in the organization is a way for the management to ensure that the organization adapts to the changes in the environment. Organizational transformation is meant to give the company concerned a competitive advantageand consequently improve the performance of the organization. The formulation of strategies to ensure organizational transformation management is important for any program that is aimed at modernizing the organization.The individuals in the organization must be involved in the planning and implementation of the change to ensure the effectiveness of the transformation. The external environment is no doubt the greatest driver of change in an organization. The changes that are experienced in the external environment will contribute to the transformational factors in the organization. This paper focuses on the approach that is used in selecting and identifying the transformation program in an organization and also looks at the advantages and disadvantages of such programs through the use of case studies. (Oswal 2009, 24) Tesco Case Study Tesco is one of the leading non-food retailers in Europe. In the UK, the company is the largest food retailer. For this retailer to have been able to cover the milestones to achieve the kind of growth that it enjoys today, the company had to undergo one of the most comprehensive business transformation programs. Before this transformation, the company’s stores portfolio consisted of old, high street locations in need of repair. The management structures of the retailer were detached from the end customers. The product pricing for the customers was done manually while the price lists were also updated manually. To change the condition of the company at the time, the management embarked on an organizational transformational program of the entire organization. This business transformation was to impact on all areas of operations both within and outside of the company and would last for almost two decades. (Birmingham City Council 2010, 1) The transformation focused on the structure of the entire organization to ensure that there was efficacy. Regarding the functions of the head office, a retail focused department was set up to control the impact of the functions of the head office on the day to day operations of the stores. Senior managers were required to have retail experience for them to qualify for head office positions. The supply chain management was structured in a way that ensured that distribution centers matched the requirements of the retail stores. Tiers of middle-management in the organization were abolished, and the employees of the company were empowered to serve the customers. Personnel development managers were also introduced in the stores to ensure that every position in the company was occupied by the right person. (Birmingham City Council 2010, 3) The focus of the structure was to ensure that the personnel involved in the day to day management of the activities of the organization were capable of delivering the required skills to promote the growth of the company. The transformation of the structure of the company was also meant to ensure that every person in the organization was in the right position. This became the beginning of the restructuring of the organization to ensure that the new structure would boost the growth of the company. The business processes of the organization were changed to ensure that they became more focused on providing quality services to the customers. This is in line with the process-centric approach in business transformation that requires that the processes in an organization be fine-tuned and automated. Those processes that were considered as inefficient were stripped out. The meetings in the company were minimized to ensure that there was no unnecessary wastage of time in meetings. The goal was to ensure that all the focus and energy of the employees of the company was used in the achievement of the goals of the organization. Performance measures were also introduced at all levels of the organization. This was to ensure that all the employees and other staff members in the organization performed the work and responsibilities that were assigned to them. (Birmingham City Council 2010, 4) The process management in an organizational transformation is meant to ensure that there is more coordination in the end to end business processes to ensure that there is an increase in productivity and a reduction in errors. This is to ensure that the business processes are more effective and increase the growth of the organization through enabling the company to meet its goals. The process management is also meant to ensure that the cost of the processes is low. However, this should be done in a cautious manner to ensure that the refining of the processes do not result in poor quality of goods and services that is delivered to the customers. (Chesley & Wenger 1999, 50) The transformation of the company also touched on the information exchange in the organization especially between the organization and the customers. Tesco introduced the ClubCard which contributed to the growth of the company giving it the largest customer base in Australia. The introduction of the ClubCard enabled the company to understand its customers in terms of their shopping habits and patterns, the products bought and the geographical spread of the customers (Birmingham City Council 2010, 4). This formed the information management stage of the transformation. This information pertaining to the customers was used to target product ranges depending on geography. The retail stores belonging to the company were able to target their best customers since this information was available to them. The information regarding the shopping patterns of the customers would further be used to identify the products that the customers preferred the most. The company could, therefore, refine its processes to meet the needs of the customers. Previously, customers could only be targeted collectively through the media. However, Tesco was able to target the customers individually since such information was already available to them through the ClubCards. The advertisements could now be made reflecting on the specific needs and interests of the customers. Technology was also introduced to match the needs that arose in the business. Computerized checkouts and computerized stock control systems were introduced in retail stores. The stock control system was meant to predict and order products that matched the shopping patterns of the customers. Computerized pricing was also introduced to replace the manual system that was previously in existence. (Birmingham City Council 2010, 5) Through the transformational organization change, the company was able to expand globally and eventually became the largest online food retailer in the UK. The company was also able to introduce Tesco Personal Finance as well as Tesco Mobile. These were reflective of the growth that the company experienced as a result of the transformational change. AAPT Case Study AAPT is a leading telecommunication infrastructure company in Australia offering data, internet, cloud, mobile and voice services for business, governments and other entities. In 2004, a new strategy to boost the performance of the organization was approved as transformation for the organization. The name of the program of transformation was Hyperbaric. The three areas that were covered under the new strategy were to introduce a triple-play bundled service that was meant to enable AAPT to provide for more profitable long-distance telephone calls in order to create more options for the consumers. The strategy also included an automated provisioning to reduce the costs of the services to customers and help in the migration to a customer acquisition model. The strategy also included service abstraction that was meant to enable AAPT to enable the company to consume services from multiple providers. (Gandar 2011, 3) This strategy required that new processes and functionality to be defined by the executives of the company. These executive members of the organization took over the responsibility to oversee all the decision-making that was necessary throughout the transformational period. This made the strategy more successful since all the decisions and strategies employed were calculated to ensure that they contributed to making the processes of the company more efficient. The effectiveness of the transformational processwas, however, affected by certain factors that impacted negatively on the progress made. The change of management and consequently the change in strategy that resulted led to dissatisfaction among the customers due to the increase in price. The issues arising from the migration of the customer base contributed to further issues that resulted from inconsistencies in customer data. The customers became dissatisfied with the services that were being offered by the company. (Gandar 2011, 4) Despite these negative impacts of the transformational process, the changes contributed to the growth of the company. Staff costs were significantly reduced and a complete switch to an inbound model of new customer acquisition was achieved. There was also the achievement of proactive customer support. The customer business of the organization increased in profitability as a result of the transformational strategy that was employed. Though the costs for the process were high, the benefits exceeded the total cost. The fact that the senior executive officials of the company were involved in coming up with the strategies and key areas that would be affected by the transformation contributed to the effectiveness of the process. These officials were able to weigh the options that existed for the company and be able to come up with strategies that were viable. With the understanding of the position of the company, these officials were able to identify the areas that could be more effective through transformation. (Gandar 2011, 15) Selecting and implementing the transformation program The decision to transform a company may be influenced by the fact that there are new opportunities that can be harnessed thorough transforming the company (Moreton 1995, 154). The decision could also be influenced by the existence of threats to the business. To protect the business and ensure its continuous growth, there has to be transformation. The company may also be influenced by the need to focus to ensure that the company achieves its goals. (McNulty & Ferlie 2004, 12) To be able to select the right transformation program, certain preparations have to be made. The fact that the transformation may be influenced by new opportunities more so in the market and the need to focus on the goals of the organization means that there has to be prior analysis. The organizational performance has to be measured to identify the gaps that exist between the goals that have been set and the ones that have been achieved. The fact that some of the goals of the organization are not met means that there needs to be a strategy to ensure that they are achieved. New processes that bring in new strategies to address the inadequacies in the company have to be identified. They have to be consistent with the goals that the organization intends to accomplish through the transformation program. This makes up the portfolio management. (Love et al. 2004, 120) The identification of the right strategies to implement in the transformation program is important for the success of the process. This means that conducting a proper analysis to identify the right strategies to fill the gaps in the organization is important. The disadvantage of this, however, is that there may be additional costs in laying the foundation for the transformation (Moreton 1995, 154). Further, the fact that the analysis has been done does not guarantee of the success of the transformation program. This is because the identification of the strategies to be used may be flawed by the rise of external influences that may change the status of the organization and, therefore, render those strategies obsolete. The identification of the areas that need transformation in the organization requires extra focus. This is because any mistake at this process may mean that the entire program will be ineffective. In such an eventuality, the costs to the company will be enormous and may end up making the company more inefficient. (McGuire et al. 2009, 43) In implementing the transformation program, there must be a framework that is set up to ensure that there are benefits gained by the organization as a result of the program. The right tools and processes have to be used and implemented to ensure that the program is effective. This means that all the personnel in the organization have to be involved in the implementation stage just as they were involved in the preparation stage. This ensures that the change that is effected through the program can be easily accepted by the staff in the organization. (Lengnick & Beck 2005, 10) However, despite the requisite preparation and proper implementation stage, it is clear that there are always be unforeseen eventualities. (Yorks & Marsick 2000, 255) In the case of AAPT, though the program was successful, there were negative effects that arose from the program. These effects had an impact on the customer base of the organization and almost threatened the growth of the company. This shows that there may be some impacts of the program that may be unforeseen and may result to disadvantages for the company. Conclusion The transformation of an organization is necessary to ensure the growth of the organization and to ensure that the goals set have been achieved. Though there may be negative consequences of the transformational process as was seen in the case of AAPT, the benefits that result from such transformation are greater than the negative impacts. Proper analysis and implementation is required for the transformation process to ensure its success. 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