| | Western European
businesses have launched
seven major
transformation
programmes on average in
the last three years,
according to the new
report, Trends in
Business
Transformation, from
Capgemini Consulting in
partnership with the
Economist Intelligence
Unit.
The report found that
86% of European senior
executives believe that
business transformation
is an integral part of
management. Of these,
44% are motivated by the
growth of international
competition, 34% are
motivated by industry
consolidation and 34%
are motivated by
increased competition in
domestic markets.
However, only 30% feel
that managing these
business transformations
is something at which
they excel.
These transformation
projects tend to focus
on reducing cost due to
new economies of scale
at an international
level and, increasingly,
on achieving growth by
seizing each and every
opportunity offered by
emerging markets.
Whether the intention is
to boost turnover or to
improve profitability,
the study underlines the
extent to which economic
globalisation impacts on
the number and content
of these transformation
programmes.
The analysis reveals
two major forms of
transformation:
? Fundamental change
that generates a strong
impact on results in
less than two years,
such as mergers and
acquisitions (57%),
outsourcing and | |
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| | transformation
programmes. Lack of
control over the outcome
and inadequate project
ownership are considered
to be the chief causes
of failure. In fact, 46%
of the executives cite
the failure to achieve a
project's original
objectives, and 41% cite
the inability to achieve
buy-in from employees.
More specifically,
the majority testify to
the difficulty they have
in handling their
programmes' critical
implementation phases.
Of the executives
questioned:
? 70% expressed
dissatisfaction with the
communication of
objectives to employees,
and 75% expressed
dissatisfaction with
training, commitment and
people management;
? 73% considered
themselves to be
unsuccessful in avoiding
slippage in execution
time;
? 70% said they are
not in a position to
properly assess the
success of their
programme.
Jean-Francois
Lendais, vice president
in charge of the
Transformation
Consulting unit at
Capgemini Consulting,
said: "This feedback
reaffirms some
fundamental principles:
business transformation
is successful when it is
demonstrated that the
results do, in fact,
feature in the company's
accounts and when
working methods have
been profoundly altered
– that is the only proof
of change
sustainability."
Whilst globalisation
imposes constant and
rapid changes it also | |
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| | makes these
transformations more
complex. For example, on
average only one-third
of the revenue generated
by France's top 40
companies is actually
made in France. So,
major transformations
generally involve
several countries with
different languages,
cultures and management
styles, making
implementation even more
complex.
Commitment is
essential in making a
major transformation
programme a success. The
first stages of
developing
transformation projects
do not seem to pose
significant problems:
two-thirds of the
executives questioned
say they perform well in
identifying the need for
change, setting
objectives or convincing
their shareholders. They
therefore pay great
attention to the
preliminary studies when
justifying the launch of
a major transformation
project.
However, executives
are much less confident
about maintaining strong
momentum throughout the
transformation process.
Consequently, strong
leadership and
consistent support from
senior management are
considered important
levers to ensure the
project's success (65%),
followed by alignment
with overall business
strategy (42%) and
buy-in from employees
(32%).
Interviewees
unanimously agree that
senior management must
constantly remind
employees of the
importance of the
transformation process | |
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| | to the business's
success and that
management must make
regular demonstrations
of its commitment to
this success.
Trends in Business
Transformation is a
white paper produced by
Capgemini Consulting and
written in co-operation
with the Economist
Intelligence Unit. The
main author was Paul
Tyrrell and the editor
was Rob Mitchell. The
findings are based on
two main strands of
research:
? The Economist
Intelligence Unit
conducted an online
survey of 125 senior
executives from Western
Europe at businesses
with minimum annual
revenues of US$500m
(€393m). Half of those
surveyed were C-level
executives. The survey
encompassed a wide
variety of primary,
secondary and tertiary
industries. The most
heavily represented were
financial services
(accounting for 19% of
respondents),
manufacturing (17%) and
IT & technology (11%).
? Capgemini also
interviewed 15 senior
executives from across
industries to ascertain
their views. The aims of
these interviews were to
identify trends in
business transformation,
to look at the lessons
these executives have
learnt from their
experience of
transformation projects,
and to find out how they
have overcome specific
challenges related to
transformation in their
organisation.
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| | offshoring (53%),
restructuring (46%) or
strategic changes (46%).
These programmes involve
external players and
generate major
transformation within
the organisation.
? Programmes that
generate comparative
improvement, such as
value-chain optimisation
(33%), cross-functional
performance improvement
(44%) and information
systems redesigning
(54%). These programmes
require the long-term
commitment of a large
number of internal
players.
Sonia Artinian,
director of Capgemini
Consulting's
Transformation
University, which offers
tailor-made training
programmes dedicated to
executives and managers,
says: "The sheer number
of programmes being
implemented
simultaneously implies
that every manager is an
agent of change and must
have a comprehensive
command of the new
skills and forms of
behaviour in order to
launch, steer and
achieve major changes in
collaboration with their
teams. Moreover, since
the key players are in
such great demand, they
have to learn to do all
this ever more rapidly,
while relying more and
more on their
employees."
It seems that many
senior executives are
not satisfied with the
results of their | |
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