In today’s software-driven business world, IT transformation has become an enormous component of business transformation and software risk management. This is one of the key messages delivered by Marc Cecere, Vice President and Principal Analyst for Forrester Research, during a webinar held recently on Business Transformation, which was sponsored by CAST, Inc.
Cecere explained that business transformation involves fundamental changes to major business processes, structure, models and culture, noting that most transformations require changes to structure and the roles of personnel, as well as collaboration between divisions or departments in the business. However, the biggest changes in these transformations come in the form of major system integration and technology changes.
“One of the areas that we looked into is what business unit experiences the most changes as part of a transformation project, and our findings were a bit of a surprise,” said Cecere, referencing a survey conducted last year by Forrester Research. “We thought customer service would have housed the most transformative changes, however we found that 65% of changes are a result of IT process configuration.”
Cecere went on to explain that when this was investigated further, survey respondents had said that every one of the business changes they had undertaken ended up requiring significant changes to the IT processes. Customer service transformations, by contrast, occurred in fewer than half of the cases (48%).
Another surprising result of the Forrester research cited the leading reasons for business transformation, and Cecere dubbed this information “disappointing.” He said that a majority (54%) of respondents chose to undergo a transformation for the purpose of lowering costs, while 49% chose to do so to inspire revenue growth. Only 41% of the sample cited innovation as a motivator for transformation.
Cecere’s presentation covered a number of other areas of business transformation including the importance of culture changes – which he said is a relatively new focus of transformations, yet one that has become vitally important – the establishment of roles and the reasons why transformations fail.
He also points to complexity as a significant obstacle to successful transformation, noting that, “Complexity is the enemy of change.”
As companies have grown, their systems have also gotten bigger, more complex and more diverse. Because of this, organizations lack the visibility into these systems and the hidden technical complexity and architectural weakness derail transformation efforts.
“Failure is a career ending event for the CIO, there’s a different level of risk you’re absorbing when you’re doing business transformation and that drives a lot of challenges that they face,” said Cecere.
From this discussion it is clear that transformation programs have many challenges and potential to fail. The ability for those leading transformation to foresee these obstacles that prevent transformation failure is a game changer. Obstacles such as the lack of visibility, excessive complexity, and architectural vulnerabilities all can all be identified through system and architectural analysis, which the CAST AIP solution can provide.
The full webinar presentation on Business Transformation is available on the CAST web site at http://www.castsoftware.com/news-events/event/3-ways-to-avoid-transformation-failure .
To see responses to some of the most asked questions during the webinar, which were not answered due to time constraints, click here
Erik Oltmans, an Associate Partner from EY, Netherlands, spoke at the Software Intelligence Forum on how the consulting behemoth uses Software Intelligence in its Transaction Advisory services.
Erik describes the changing landscape of M & A. Besides the financial and commercial aspects, PE firms now equally value technical assessments, especially for targets with significant software assets. He goes on to detail how CAST Highlight makes these assessments possible with limited access to the targetâ€™s systems, customized quality metrics, and liability implications of open source components - all three that are critical for an M&A due diligence.