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

 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,

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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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.

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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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