Business transformation

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Business transformation is about making fundamental changes in how business is conducted in order to help cope with a shift in market environment.[1]

When business transformation is used[edit]

The need for business transformation may be caused by external changes in the market such as an organisation's products or services being out of date, funding or income streams being changed, new regulations coming into force or market competition becoming more intense. This management approach is widely used:[2]

  • to increase revenue or market share
  • to improve customer satisfaction
  • to cut costs


Business transformation is achieved by realigning the way staff work, how the organisation is structured and how technology is used. Typically organisations go through several stages in transforming themselves:[3]

  • recognising the need to change and gaining consensus amongst stakeholders that dramatic change is necessary
  • agreeing what form the change should take, the objectives of the change and a vision that describes a better future
  • understanding what the organisation is changing from and what needs to change in detail
  • designing the new organisational way of working and its support and management
  • testing and implementing changes, usually in waves, typically over a number of years
  • bedding in the change so that the organisation cannot move back to how it was and achieves the intended benefits

Transformation examples[edit]

Examples of organisational transformation include:


  1. ^ Harvard Business Review January 2007 Kotter
  2. ^ McKinsey Survey 2010
  3. ^ Harvard Business Review January 2007 Kotter
  4. ^ Transformed GM back in the game 2010
  5. ^ BBC website October 2011
  6. ^ British Airways simple route to business transformation 2005