Study: Biz Transformation Initiatives Lack Direction

Celonis research reveals businesses need help with visibility, planning, goal-setting

A survey done this past January by Celonis found that companies are jumping into business transformation projects before they have a clear idea of what needs changing and what the outcome of those projects will be.

The Lowdown:  Celonis, a provider of business transformation software, surveyed 450 C-suite executives and more than 450 business analysts at U.S.-based companies with 500-plus employees to gauge how they’re managing their transformation strategies and identify the obstacles they face.

The Details:  The study’s findings reveal that businesses recognize the need to transform in order to boost productivity, pare down costs, and enhance customer service. At the same time, though, many of them lack direction and focus when it comes to putting those transformation plans in motion. The absence of strategic planning has resulted in lost time, wasted money, and, worst of all, low to no yield in the way of productive business outcomes.

Here are some highlights from the study:

• 42 percent of C-suite executives admit they don’t know where to begin when developing their transformation strategies.
• 37 percent of surveyed businesses have spent more than $500,000 on business transformation in the past 12 months.
• 39 percent of business analysts said they’re not consulted regularly to inform their organization’s transformation strategy.
• 67 percent of leadership personnel said they’d feel more confident deploying their transformation strategy if they had a better picture of how their businesses are being run.
• 35 percent of analysts aren’t basing their work on internal processes when executing the transformation strategy given to them by senior personnel.
• 60 percent of C-suite execs have set KPIs for their transformation initiative without first understanding what’s going wrong in their businesses; 79 percent concede that they don’t look at internal processes to establish priorities before starting a transformation project and establishing KPIs.
• Even with admittedly poor visibility into their businesses, only 32 percent of senior leaders plan to invest in improving that visibility; a majority have targeted AI/machine learning (70 percent) and automation (71 percent) as areas for investment, even without knowing if those technologies would actually allow them to reap concrete benefits.
• 41 percent of senior leaders believe their business transformation efforts have been a waste of time.

According to Celonis, organizational complexity, limited budgets, and a lack of skilled staff have proven to be the primary obstacles for companies engaged in business transformation.

The Buzz:  “Transformation strategies will inevitably be part of every organization’s operations, because no business can avoid adapting to the latest industry and technological trends,” said Alexander Rinke, co-founder and co-CEO of Celonis. “However, they should be founded in concrete insights derived from processes that are actually happening within a company. Our research shows that too many businesses are rushing into costly initiatives that they don’t necessarily even need to embark on. They’re falling at the first hurdle; having a better understanding of inefficiencies in underlying business processes can help organizations invest wisely to provide the best possible service for their customers.”

“From early stages in digital transformation to post-transformation, organizations must understand how internal processes can shape their business strategy,” said Jeremy Cox, principal analyst at Ovum, an independent analyst and consulting firm. “Quantifying the business impact of existing or newly adapted processes can help optimize the environment for customers.”

Channelnomics Point of View:  Clearly, businesses need assistance with their transformation efforts. As trusted advisors with both technical acumen and real-world experience, solution providers can help companies craft strategic plans for taking their companies to the next level. They can work with customers not only to gain insights into business processes, develop road maps, and select and deploy appropriate technology solutions, but also to spur cross-organizational cultural shifts and communications.