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Business transformation


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Business transformation

  1. 1. Chandan lal Patary, PMP
  2. 2. • Business Transformation w.r.t. Macroeconomic factors • Business Transformation w.r.t. opportunities • Business Transformation w.r.t. people factor • Business Transformation w.r.t. Operation excellence • Business Transformation w.r.t. Risk, change and value management
  3. 3.  In today’s global competitive environment, any business, large or small, that is not thinking and acting strategically is extremely vulnerable. Every business is exposed to the forces of a rapidly changing competitive environment and in the future small business executives can expect even greater change and uncertainty. From sweeping political changes around the planet and rapid technological advances to more intense competition and newly emerging global markets, the business environment has become more turbulent and challenging for business leaders. Although the market turbulence creates many challenges for small businesses, it also creates opportunities for those companies that have in place strategies to capitalize on them. Small companies now have access to technology, tools, and techniques that once were available only to large companies, enabling them to achieve significant, sometimes momentous, results.  Today’s business leaders realize that rapidity of change necessitates creating extraordinary value and achieving success for their businesses and customers, stakeholders, supply networks, supporting entities, and shareholders at speeds greater than the underlying rate of change in the business environment. A business organization must continuously innovate to stay ahead of the changes in the business environment. A fundamental belief is that business organizations must make significant improvements and even radical developments in their strategic positions, value creation, organizational capabilities, and physical resources.  Today, the forces driving the global business environment require businesses and strategic leaders to become more connected with their customers, stakeholders, suppliers, distributors, and other partners. Connectedness in thoughts and actions is now crucial for staying in touch with reality and understanding rapidly changing needs, wants, expectations, and mandates. In a slow-paced world, business leaders had the time to watch events unfold, contemplate strategies, and then respond in deliberate fashion. In today’s more turbulent times, corporations must be proactive in analyzing and understanding the business environment, market and stakeholder expectations, and future requirements in order to be prepared for action regardless of what unfolds.  Today, enterprise-wide strategic leaders have to think outside-the-box just like the inventors, innovators, and technical specialists involved in creativity, research and development, and strategic innovation. Strategic leaders who wish to move their organizations from good to great must relentlessly pursue sustainable outcomes. It is critical for strategic leaders to focus on the business challenges and opportunities within the business environment, the social world, and the natural environment in both the present and the future. It is of little good to achieve great success during good times only to fall victim to recessions or industry downturns.  Today, like visionary companies, organization has to be terribly demanding of themselves. Organization need to invested for the future to a greater degree than the comparison[less successful] companies . . . Organization has to translate its core ideology and its own unique drive for progress into the fabric of the organization – into goals, strategies, tactics, policies, processes, cultural practices, management behaviors, building layouts, pay systems, accounting systems, job design – into everything that the company does
  4. 4. v Andrews’ SWOT model, v Chandler’s scale–scope–speed triad, v Porter’s industrialanalysis, v Barney’s resource-based view, v Hameland Prahalad’s competence thesis, v Teece’s dynamic capability treaty, v Ansoff’s planning approach, v Mintzberg’s crafting school, v Collins and Porras’ Built to Last , v Kimand Mauborgne’s Blue Ocean Strategy , v Barnard’s The Functions of the Executive v Walton’s Made in America:My Story, are based on Western experience and underpinned by Western thinking. v Akio Morita’s Made in Japan and v Ikujiro Nonaka’s Knowledge-Creating Company remain lonely exceptions
  5. 5.  A corporate-level strategy identifies the various businesses that a company willbe in, and how these businesses willrelate to each other.  A business-level (competitive) strategy identifies the ways a business willcompete in its chosen line of products or services.  Functional strategies identify the basic courses of action that each department in the firm will pursue so that it contributes to the attainment of the business's overallgoals. Organizations depend upon projects that are derived from and aligned with corporate strategy. Understanding how strategic business objectives are aligned at the project level is critical for competitive positioning and high-performing organizations.
  6. 6. • Four factors help a company to build and sustain competitive advantage— • Competitive advantage leads to superior profitability. At the most basic level, how profitable a company becomes depends on three factors:  Superior efficiency,  Quality,  Innovation,  Customer responsiveness.  The value customers place on the company’s products;  The price that a company charges for its products;  The costs of creating those products;
  7. 7. • There are few identified key characteristics of good strategic leaders that do lead to high performance:  Vision, eloquence, and consistency,  Commitment,  Being well informed,  Willingness to delegate and empower,  Astute use of power, and  Emotional intelligence.
  8. 8. • It has become evident that what will matter in the future are an organization’s collective skills and knowledge and how they are managed. Organization need to identify its strength as an asset and convert that to generate more business  Reconfiguration of existing systems (including the organizationalculture) to support knowledge workers.  Creation of a learning organization that is constantly sensing, valuing and sharing information and using it in a flexible way to improve efficiency, generate profitable new ideas and, overall, add value for customers.  Productivity improvements, through training and coaching employees at alllevels and through freeing managers to manage people.  Interact with more demanding customers.
  9. 9. • DISCOVERY-DRIVEN PROCESS to do effective risk management.
  10. 10. • Organization maximize profitability through develop strategy by looking at the opportunities to reach the goals through various approaches, • Penetration • Diversification • Divestitures • Integration
  11. 11. • Governance mechanisms is to reduce the scope and frequency of the agency problem—to help ensure that agents act in a manner that is consistent with the best interests of their principals.  Establish standards and targets, against which performance can be measured,  Create systems for measuring and monitoring performance on a regular basis,  Compare actual performance against the established targets, and  Evaluate results and take corrective action if necessary.
  12. 12. • Employee productivity is one of the key determinants of an enterprise’s efficiency, cost structure, and profitability. Every project managers has to take care below factors.  Hiring Strategy: it is important to make sure that the hiring strategy of the company is consistent with its own internal organization, culture, and strategic priorities  Employee Training: Employees are a major input into the production process. Those who are highly skilled can perform tasks faster and more accurately and are more likely to learn the complex tasks associated with many modern production methods than individuals with lesser skills. Training upgrades employee skill levels, bringing the company productivity-related efficiency gains from learning and experimentation  Self-Managing Teams: The use of self-managing teams, whose members coordinate their own activities and make their own hiring, training, work, and reward decisions, has been spreading rapidly.  Pay for Performance: It is hardly surprising that linking pay to performance can help increase employee productivity, but the issue is not quite so simple as just introducing incentive pay systems. It is also important to define what kind of job performance is to be rewarded and how.
  13. 13. • When a company loses its competitive advantage, its profitability falls • Focus on the building blocks of competitive advantage by focusing on all four generic building blocks of competitive advantage—efficiency, quality, innovation, and responsiveness to customers—and to develop distinctive competencies that contribute to superior performance in these areas
  14. 14. • The inability to understand change and adapt to it is characterized by organizational inertia. Many organizations falter because they fail to recognize that the market has changed, with increased competition and more organizations offering the same or similar products. It is important that there is a clear, competitive response when: Competing or substitute products come onto the market.  Technological changes give competitors an advantage or alter customers’ preferences.  Substitute products keep prices low and threaten to take current and potential customers.  Products mature, resulting in changes such as reduced prices, market saturation and risk to brand reputation.  Demographic changes occur, including shifts in income distribution.  Social changes take place, for example in fashion tastes.  Demand declines because of a cyclical change – it may be temporary, but it may be no less damaging for that.  Political developments result in regulatory changes, and possibly the removal of barriers to entry.  A significant new competitor arrives or emerges.  Rising costs of leaving the market result in intensifying competition, in the face of falling sales.  Product differentiation or strong cost advantages are lacking.
  15. 15. • Agile project managers have to consider themselves as a business manager. • Effective business strategy should be a stream of strategic projects. • Execution excellence and effective project management maturity build a best organization with long term sustenenace.