A FRAMEWORK TO DERIVE HOLISTIC BUSINESS
TRANSFORMATION PROCESSES
Bhuvan Unhelkar and Athula Ginige
AeIMS Research Group, University of Western Sydney, Sydney, Australia
Keywords: Business Transformation, Framework for Business Transformation, Enterprise Architecture, Small and
Medium Enterprises (SME), Roles, Activities and Deliverables in Business Transformation.
Abstract: This paper describes an approach to deriving a holistic business transformation process and its application in
practice. When a business is transforming there needs to be changes to many aspects of its Enterprise
Architecture (EA). The research has ascertained that often organisations are not aware of all the aspects that
need to be changed to successfully implement a business transformation. This paper presents a holistic
approach to transformation that identifies the current EA of the organisation and models the one that should
be after transformation to identify all aspects that need to under go transformation. It then uses a meta-
model of a process to derive the required processes to achieve a holistic transformation of the businesses
undertaking electronic transformations. This approach evolved in the process of assisting business
transformation is the Small and Medium Enterprise (SME) sector within the Western Sydney region. This is
demonstrated through a real-life example. This work has been carried out under the auspices of the AeIMS
Research Group at the University of Western Sydney.
1 INTRODUCTION
Rapid advances in Information and Communications
Technologies (ICT) imply a change in the way
businesses are organized and operated. The concept
of agility in business, which is a result of ICT
innovations and advances, leads to collaborative and
competitive global transactions(Unhelkar et al.,
2009). The need to understand, model, review and
implement efficient yet dynamic business processes
could not be overemphasized. However, there also
appears to be a dearth of appropriate holistic
transformation processes that can be used for
modeling and transforming business processes.
This paper aims to fill that lacuna by deriving the
process of business transformation. Furthermore,
this paper also outlines the application of this
approach to real life business transformation
projects. The factors influencing business
transformations and the risks and advantages
associated with them have been reported by
Arunatileka S. and Ginige (Arunatileka and Ginige,
2003b). These factors have also been identified and
extended by Arunatileka , D., et.al(Arunatileka et al.,
2008) and applied to mobile businesses. Electronic
transformations of businesses aim to capitalize on
the connectivity accorded by the ubiquitous Internet.
These transformations result in numerous business
benefits such as enhanced customer experience and
improved internal business efficiency(Deitel et al.,
2001) (listed later in this paper in detail). However,
business transformations themselves need a well
thought out process that helps identify the business
goals, the current structure of the business and steps
in undertaking the necessary change to become an
electronic-global business. Enterprise Architecture
(EA) frameworks (such as Zachman, TOGAF)
(The_Open_Group, 2010, Zachman and Holcman,
2010) provide excellent backdrop for the study of
enterprises. We extend and modify these
frameworks in understanding the business as it
stands. However, our core motivation of this work is
the way in which these frameworks can be used to
model the future expected state of the business and
how to reach there. Consider, for example, the 6 x 6
model of a business as presented in the Zachman
framework. We abstract the building blocks of a
business from this EA framework and summarize it
into technology, networks, data, functions/processes
and people. Each of these elements can be made up
of many sub-elements depending on the type and
141
Unhelkar B. and Ginige A. (2010).
A FRAMEWORK TO DERIVE HOLISTIC BUSINESS TRANSFORMATION PROCESSES.
In Proceedings of the International Conference on e-Business, pages 141-147
DOI: 10.5220/0002993301410147
Copyright
c
SciTePress
size of business and its transformation goals. We
argue that modeling these elements along the lines
we have discussed later in this article, is a crucial
step in undertaking transformation.
The rest of this paper is organized as follows:
project background and literature review,
dimensions of a transformation framework,
derivation of a business transformation process,
discussion on the approach to validation of the
transformation framework based on application,
conclusions and future directions.
2 LITERATURE REVIEW &
PROJECT BACKGROUND
Precursor to this work is the earlier reported work on
business transformations that was undertaken by
Ginige et al (Ginige, 2006, Ginige, 2008, Hol and
Ginige, 2008) and Ghanbary and Unhelkar
(Ghanbary and Unhelkar, 2007). These earlier
reports underscored the fact that formal planning and
execution was vital in undertaking successful
business transformations. The advances of semantic
web and service orientation have further propelled
the rate at which the business environment is
changing as we move away from information silos
to collaborative processes. The rapid impact of IT
demands derivation of a formal and systematic
transformation process. Use of such process will
lend itself to configuration depending on the type,
size and goals of the organization. Numerous
factors influence these transformations – including
the economic, technical, process and social
dimensions(Hol and Ginige, 2008, Unhelkar, 2010).
Figure 1 (A) explains why businesses undertake
formal transformations. The gap between where the
organization is and its external environment presents
a continuous challenge to the business. The external
environment acts on the organization which, in turn,
takes its time and responds with changes to its
processes, technologies and people. The time taken
between the initial action of the environment and the
response of the organization keeps it “out of sync”
with the external environment. Businesses want to
transform themselves in order to become agile – so
that they are able to respond effectively to changing
external circumstances and stay in harmony with it.
Figure 1 (B) summarizes what the organization
needs to do in order to transform: have a business
transformation process framework, derive and
configure a specific transformation process from it,
execute the process by enacting it and finally
maintain the transformed operational processes on
an ongoing basis. Such ongoing maintenance is what
constitutes an agile organization that remains in
harmony with the external environment.
We are understanding agility of business as a
time measure between two significant changes in the
environment and time it takes for an organisation to
respond to that change. A highly agile organization
will be able to quickly respond to a change in the
environment; however, as the rate of environmental
change increases the corresponding agility of the
organization can become low. At some point the
need for an organization to keep up its responses to
changing business environment becomes a
continuous process. This is what a truly agile
organization is – and it provides another reason for
formal transformation processes.
Following are the specific aims of an electronically
transformed agile business:
(a) Extend its reach globally and provide wide
coverage for the organization’s products and
services with the use of communications
technologies and web services,
(b) Change the business processes of the
organization to quickly and effectively
responding to changing needs of the customer in
a location and time independent manner,
(c) Enhance customer experience through
personalized services and additional services,
(d) Reduce internal costs and improve the quality
and efficiency of its procurement, inventories
and development activities ,
(e) Improve corporate accountability and regulatory
compliance through timely, accurate and detailed
reporting on business performance and
(f) Manage environmental and socio-cultural
responsibilities with efficient business processes.
These advantages of business transformation and
globalization have also been studied by Lan and
Unhelkar(Lan and Unhelkar, 2005) under Global
Enterprise Transitions, and separately outlined as
seven principles of electronic transformation (e-
Transformation) by Arunatileka et al (Arunatileka
and Ginige, 2003b, Arunatileka and Ginige, 2003a).
While earlier attempts to undertake business
transformations were radical (such as reported by
Hammer and Champy (Hammer and Champy, 2001)
in re-engineering the corporation and also electronic
transformations roadmaps discussed by Kalakota
and Robinson (Kalakota and Robinson, 2001), our
experiences – especially in the context of SMEs –
were that such radical transformations did not
succeed and that their stated business benefits did
not accrue.
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142
Figure 1: Goals of Business Transformations is to produce an Agile Organization that has minimal time gap between action
from the external environment and response of the organization.
Our experiences and further investigations suggest
that transformation of business requires careful
handling of the operational processes of the
organization. This focus on operational business
processes in transformations is further ratified by the
work of Arunatileka D.(Arunathilaka, 2006) who
investigated an in-depth approach to transformation
of mobile business processes. In a recent global
survey of practitioners, Unhelkar (Unhelkar, 2009)
also discovered that business perceive “business
processes” as a major area of value as well as risk.
Hence a transformation process needs to pay
particular attention to the operational business
processes.
Based on our literature review, understanding
and experiences with SMEs, we find that the success
of business transformation depends on the following
factors:
The purpose of transformation and business
goals need to be clearly spelled out. These goals,
as mentioned earlier, can range from cost
reduction to enhancing customer experience.
More importantly, these goals can change
depending on the type, size and strategic
direction of the organization.
Understanding of a well formulated business
transformation process. Deriving a
transformation process formally from an existing
framework is a vital part of successful
transformation. Not having such a process is a
risk to the business wanting to change. The value
of a transformation process is its ability to
configure itself.
Enterprise Architecture frameworks help in
modeling the existing and targeted organization.
Such EA frameworks provide, in measurable
terms, what gets transformed and what value it
provides to the business. They also provide the
basis for deliverables used in mapping the
existing and future organization.
Modeling of the operational processes of the
organization is critical in undertaking successful
transformation. As mentioned earlier, operational
business processes provide the single most
critical aspect of a business and they need to be
modeled, transformed and validated for the
success of the new business.
IT systems and applications need to be studied
and their migration needs to be planned out in a
phased manner. The organization continues to
function while it undergoes transformation.
Therefore there is a need to support the
organization while it operates and, at the same
time, transform its applications.
Content Management systems – especially
dealing with rapidly changing multimedia
contents – need to be modeled and a road map
for their transformation outlined. Business
transformation will require sourcing of new
contents, correlation of existing contents with
each other, and cohesive display of location-
specific contents to users.
Communications and networks also undergo
change – especially for large and global
organizations. Transformation of
communications and networks is a specialist
technical dimension of the transformation and
needs to be factored in the overall
transformation.
Quality assurance of the new enterprise including
verification and validation of the operational
processes that have been transformed.
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143
3 BUSINESS TRANSFORMATION
FRAMEWORK
Figure 2 presents a generic meta-model of a process.
This meta-model can be used to derive a specific
process of transformation. Usually, this derivation is
dictated by the goals of transformation and the
subsequent deliverables. For example, a small
transport company would undertake transformation
of its operational processes only, whereas a large
auto manufacturer would undertake transformation
of all dimensions of its business. There is further
need to segregate processes that relate directly to the
operation of the business and the process that
handles the business transformation.
Unhelkar(Unhelkar, 2003) has argued for three core
elements of a process that describes what gets
transformed, who does it and how it is done – the
deliverables, roles and activities respectively.
Against the backdrop of these arguments, we
propose core elements of the meta-model for the
business transformation process (Figure 2).
Successful electronic transformation needs to
consider the activities and tasks that need to be
undertaken for transformation, the people who will
undertake the transformation and the deliverables
that will be produced at the end of the exercise.
These core elements of a business
transformation meta-model can be further described
as follows:
A suite of deliverables; these are the templates that
help describe the existing enterprise and also the
transformed enterprise. The deliverables based on
the templates reduce the risks in undertaking
transformation and improve its quality. For
example, mapping the organization as containing
data, functions and people requires each of these
elements to be described. Templates providing that
description are a part of the transformation meta-
model and can be used for this purpose. Our
experience suggests that a practical transformation
process is iteratively derived based on the required
deliverables and business goals. For example, in
case of Small and Medium Enterprises (SMEs), not
all types of deliverables– such as user training or
package implementation - are required. In case of
large and global organizations, on the other hand, all
elements of deliverables are required including their
lifecycles and iterative updates.
A suite of activities and tasks; these are the step-
by-step guidance provided by the process for
transformation. For example, identification of the
goals of transformation, documenting the
operational functions/processes and applying
verification and validation techniques to the
deliverables are all listed as formal activities within
the transformation process.
Roles that undertake transformation and those
that get transformed; the people involved in
transforming the business include the decision
makers, business analysts, testers and regulators.
The roles that undergo transformation include
management, external parties and customers. A
transformation meta-model contains all possible
roles from which some are instantiated depending on
the actual transformation taking place.
4 DERIVING A BUSINESS
TRANSFORMATION PROCESS
There are many models to represent different aspects
of an organisation. 7S is one such model. 7e in
eTransformation model was derived based on 7S
model (Arunatileka and Ginige, 2003b) Thus,
eventually, as explained earlier in Figure 1 (B),
through a transformation process we aim to create an
agile organization that is “in sync” with its external
environment. The model to understand an
organization selected by us is the Zachman model.
The overall process for deriving a business
transformation is as follows:
Note the type and size of the organization
small, medium and large organizations would
transform differently
Identify the status of the current organization
using a known model, such as Zachman model
Identify the goals of transformation of the
organization in short and long term
Identify and document strategies to respond to
the changes in the business environment.
Identify the affected processes and approach
required to change these business processes.
Use Zachman model to identify what should be
in rows and columns to implement these new
processes.
Identify all cells in Zachman where there is a
difference between existing elements and desired
ones
Use Process meta-model presented earlier to
derive a Transformation processes for each pair
of related cells that are different.
Based on the difference formulate the
deliverables for each aspect that needs to change.
Based on the deliverables derived each of the
components of Transformation process.
Work out the detail activities required.
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Figure 2: Core Elements of a Process Meta-model that can be used to Instantiate a Business Transformation Process for a
Specific Organization.
Figure 3: Correlating Business Transformation Process with Operational Business Processes undergoing transformation.
Appoint roles to perform the activities.
Figure 3 shows three separate types of processes: (1)
an abstract meta-model for business transformation
(2) derivation and configuration of the specific
transformation process and (3) the actual operational
processes of the business undergoing transformation.
Figure 3 further shows how an enterprise can be
understood and modeled using an Enterprise
Architecture (EA) framework. From the meta-model
presented in earlier Figure 2 it can be seen that we
need transformation processes to transform people,
operational processes, Data and Systems. However,
there can be many more elements depending on the
organization and EA framework being used. Having
identified these four core elements of an enterprise
in this case, the derived transformation process can
then transform each of these elements providing a
holistic approach. Note that the operational business
processes, in particular, need extensive modeling
and walk-through for their successful
transformation.
5 APPLYING BUSINESS
TRANSFORMATION
IN PRACTICE
The best way to demonstrate the application of
business transformation in practice is through an
example. Consider an organisation that is losing
customers to its competition. The management of
this medium sized organization has decided to
counter this loss by introducing a CRM. The goal of
this CRM is to improve responses to customer
concerns and enhance customer experience. The
business transformation meta-model provides many
elements of which we select few that help in
undertaking transformation of this SME. The
process of business transformation is derived,
configured and then enacted (shown in Figure 1 (B))
in order to transform the business. The following
Table 1 summarizes the EA framework that could be
used to understand and model the transformation of
the aforementioned SME.
A FRAMEWORK TO DERIVE HOLISTIC BUSINESS TRANSFORMATION PROCESSES
145
Table 1: Instantiation of the Core Elements of a Business Transformation meta-model for a Specific SME.
Elements of Transformation Existing Organization Transformed (Electronic)
Organization
Expected Improved
Outcomes and Comments
People:
Customers
Senior management
middle management
Users
Many employees, some
repeating tasks. Customers
have multiple touch points.
Frustrated customers.
Single touch point for
customers globally.
Greater value for the customer
and reduced effort for
employees. Training / up
skilling is required
Process
Internal
External
Hierarchical; dispersed across
many small departments.
Unacceptable response time to
customer issues.
Customer-centric processes.
Improved response time.
Enhanced customer experience.
Streamlining of processes
through re-engineering and
modeling results in efficient
processes. Reduced wastage.
Modeling and optimization
required.
Data
Multi-media
In multiple Access
spreadsheets.
Converted into a single
SQLserver database.
Accessible on Internet and
mobile devices.
Reduced duplication of data and
hence less errors. Also, better
control for the management. QA
and testing required.
System
In-house
Packages
Multiple systems developed
on ‘as needed’ basis.
Merging/Integration of systems
into cohesive suite that is
Internet-enabled. Able to
support the people goal of
single touch-point.
Less IT maintenance work
and hence less costs.
Reduction in energy budget.
Improved performance. QA
and testing required.
The elements of transformation listed in Table 1 are
derived from a repository of transformation elements
that are grouped as people, process, data and system
(see Figure 3). This table further lists how the
organization looks now and how it should look after
transformation. This list, based on our
transformation meta-model, provides starting point
for a comprehensive business transformation and
change management program. In case of the
aforementioned example of an organization losing
customers, following are the major steps in this
transformation program:
The organization is identified as a medium sized,
localized organization
People, process, data and system of the existing
organization is listed (with the background of
Zachman model, as described in Figure 3 of our
model)
Improving customer experience and thereby
retain customers is the goal of the organization
Integration of data and systems at technical level
– using Web Services / Service Oriented
Architecture (SOA)
Up skilling / training of staff at people level.
Customer management processes undergo re-
engineering using BPM techniques (for example,
see Ginige and Ginige(Ginige and Ginige, 2007))
New business process architecture includes
single point of contact (SPOC) functionality (see
the comments in the Table 1).
Transformation takes place for each element
(described in each of the rows in Table 1) – e.g.
people are trained, processes are re-engineering,
data is converted (and tested) and systems are
integrated keeping quality assurance in mind.
Eventually, this table expands into a comprehensive
project plan that is based on the existing and future
goals of the organization. Set of activities and tasks
corresponding to the elements of Table 1 are
incorporated in that project plan.
6 CONCLUSIONS AND FUTURE
DIRECTIONS
This paper presents a framework to derive a holistic
business transformation process. The goals of such
framework is for the organisation to become agile
and continuously be harmonious with the changes in
the external business environment. The framework
includes a meta-model which provides a suite or
repository of various transformation elements made
up of people, processes and deliverables. An EA
framework was used to map the existing
organization and its future state. We also described
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the three different types of processes that are
involved in transformation – the meta-model of a
transformation process, the actual instance of the
transformation process derived using the meta-
model and the operational processes that are
undergoing transformation. These elements are used
in different context depending on the type and size
of the organization and also its transformation goals.
We plan to apply this transformation model to many
other organizations in the region to further validate
it.
The work presented in this paper will be
extremely valuable to these organisations as research
has shown many organisations do not clearly
identify all aspects of the organisation which can be
modelled through an EA that needs to be changed
when undergoing a business transformation(Hol and
Ginige, 2009). However, the practical application of
this research will benefit by further action-research
in the application of existing EA models (e.g.
Zachman, TOGAF) from a transformation
perspective.
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