The Transformational Change Industry
Transformational change is a multi billion-dollar industry. It provides a wide range of products, services and proprietary consulting methodologies to businesses and the public sector. A report by researchandmarkets.com forecasted in 2021, that the size of the digital transformation market alone, was $521 billion. It is also projected to grow to over $1.2 trillion by 2026.
The last 10 years have seen significant changes in technology and the introduction of a vast of array of cost-effective processes and tools to companies. These fall under digital, sales force and performance transformations. The costs for these initiatives range from hundreds of thousands of dollars to millions of dollars depending on the size of the organization.
Because of the sheer demand for these new tools and processes, transformational change is the most common type of change.
The Three Areas of Transformational Change
As discussed in my last blog, transformational change applies to many types of change management initiatives. What makes transformational change different from the other types of change, is it has a direct impact on revenue, costs or operating efficiency. It also requires significant employee engagement across departments. In some instances, employee roles change.
Transformational change can occur in 3 different areas within a company, as shown in the chart below.
Enterprise level initiatives are usually the most expensive. They also have the potential to significantly disrupt company operations if not successfully implemented. Examples of these include:
- Digital transformations such as ERP integrates financial and operational data across entire company operations such as finance, manufacturing, sales, logistics, marketing and human resources. If poorly implemented, it can consume significant amounts of time and money which can be double or triple original budgets.
- LEAN methodology, to monitor and improve processes and efficiencies across the entire organization. This methodology require a wholesale cultural shift with the workforce. Employees are very often directly accountable for their results.
These types of change initiatives have the potential to significantly disrupt workforce performance. Employees not only learn new skills and tools, but also have their employment performance based on the results they produce. As well, many of these initiatives provide important information to other departments to increase efficiency and improved results.
Examples of these include:
- Sales Methodologies, which focus on implementing highly effective selling approaches. These draw on customer analytics from the marketing group to target new clients, and potential upside with existing ones.
- ERP Modules such as CRM, which support the management of customer relationships and captures customer data, history, and ongoing sales activity which is used by sales and marketing.
- Performance Management Systems which align, optimize and measure activities that directly impact profitability through higher revenue or cost reductions through improvements in efficiencies.
- This can include optimization of manufacturing assets to decrease cost, and identify and produce high margin products.
- LEAN 6 Sigma & TQM methodologies to improve manufacturing quality and cost reduction.
- Customer Service Methodologies, which are specifically designed as a lower cost sales channel to sell, up sell, and provide customer support.
These include customized programs to train and embed a specific skill set within a department. The ultimate objective of these programs is to produce timely information to be used by other departments, such as sales and finance. There are many types of initiatives which fit this area. Examples include:
- Customer Analytics Program, where specific training and tools are provided which allow companies to develop and generate customer data in areas such as profitability profile, lifetime value analysis, and share of wallet.
- Marketing Program, where specialized tools are taught and implemented in areas such as customer segmentation; marketing and industry analysis; and other relevant programs.
- Customer Service Programs used in call centers to resolve customer issues; or in Service Departments as a lower cost sales channel.
In my next blog, I’ll review the elephant in the room – the question of the 70% failure rate.
This article is based on my forthcoming book Rethinking Change Management; How To Implement Transformational Change For Long Term Success, which will be publishing later this year. If you find this article helpful, please share and subscribe to our blog and newsletter. Stay tuned for further details.
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