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Driving Transformation: Strategy Defines the Journey

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The vast majority of U.S. companies are transforming their businesses, yet nearly one-quarter fail to realize the business benefits targeted at the onset of their initiatives. One of the chief obstacles to successful transformation is underestimating the significance of the operating model.

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Driving Transformation: Strategy Defines the Journey

  1. 1. CUSTOM E R DEMAND DISRUPTIVE TECHNO LOGIES GOVERNMENTPOLICY INDUSTRY CONSOLIDATIO N CHANGINGGLOBAL E N VIRONMENT 28 % 32% 32% 32 % 28 % 24% 23 % 23% 98% 38 % 29% VALUE METRICS U.S. COMPANIES IN SOME PHASE OF TRANSFORMATION FAIL TO REALIZE OPTIMUM VALUE PROFITABLE GROWTH REVENUE GROWTH COST REDUCTION 36% 33% 28% 25% Percentage of survey respondents who answered yes. DESIGNCAPABILITIES C ORPORATECULTURE UNDERESTIMATE OPERATING MODEL 38% DrivingTransformation:StrategyDefinestheJourney INADEQUATE TECHNOLOGY RESO URCECONSTRAINTS APPLYINGRIGHTM ETR ICS TRANSFORMATION TRIGGERS TRANSFORMATION BARRIERS The vast majority of U.S. companies are transforming their businesses, yet nearly one-quarter fail to realize the business benefits targeted at the onset of their initiatives. One of the chief obstacles to successful transformation is underestimating the significance of the operating model. Customer demand was cited by respondents as the top trigger for transformation over the next three years (32 percent). Additional triggers driving transformation included changing/expanding global environment (28 percent), industry consolidation (24 percent), government policy (23 percent) and disruptive technologies (23 percent). When asked which metrics they use to prove value, survey respondents cited profitable growth (36 percent), revenue growth (33 percent), and overall cost reduction (28 percent). Underestimating the significance of the operating model was identified as the greatest barrier to successful transformation (38 percent) among survey respondents. Additional barriers the survey identified are all components of an effective operating model: existing corporate culture (38 percent), inadequate or legacy technology (32 percent), resource constraints (32 percent) and applying appropriate metrics (28 percent). Based on a survey of 963 executives from U.S.-based multinationals in all major industries. Sixty-seven percent of survey respon- dents were C-level executives, including 28% who were CEOs. Company revenues ranged from $1 billion to more than $100 billion. FOCUS ON KEY INFORMATION TO REALIZE OPTIMUM TRANSFORMATION VALUE Learn how KPMG can help you transform with focus and agility. Visit www.kpmg.com/transformation © 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

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