1. Building Business Transformation Capabilities Our perspective on the building blocks, structure and critical success factors to impact change
Gillian Richards
James Miller
UBC Centre for Operations Excellence and Tree Island Steel
Business Transformation 2014 Conference

2. Drivers of Business Transformation
There are many driving forces, within and across industries, contributing to an increasing need for business transformation services
Drivers of Business Transformation
A Clear Mandate
Changing Customer Preferences
Regulatory Reforms
Globalization & Increased
Competition
Industry Consolidation
Macro Economic Forces
Technology Innovations
Accelerate a necessary change and enable key business strategies
Quickly and effectively course correct key areas of the organization
Today we will talk about building business transformation capability from two perspectives – an internal industry perspective, and the external consulting partners that help support…

3. The Role of Business Transformation
Before we talk about the capabilities required to build an internal consulting function, it is important to first establish our understanding of the business transformation ‘service offering’
The Role of Business Transformation
Strategy Execution
Business Optimization
Program Design
Full Transformation
Target Operating Model
Decision Rights and Structure
Alignment and Accountabilities
Performance and Rewards
Productivity
Cost Optimization
Process Intelligence
Lean Six Sigma
Policy and Procedures
Business Case Analysis
Program Design and PMO
Post Merger Integration
Implementation Planning
Business Model Redesign
Technology Implementation
Post Merger Integration

4. Interaction Model ‘Archetypes’
We believe building capability first begins with defining the role a business transformation team will play within an organization
Interaction Model ‘Archetypes’
Span and Scope of Authority
Low
High
Centre of Excellence
Hybrid
Shared Service
Facilitate the definition and execution of a standard process, approach, alongside corresponding tools and templates to support business initiatives
Derive authority based on expertise, experience and executive mandate to influence capability building
Structured into large cross- functional teams to help lead and support select business transformation programs and/or initiatives
Employ dotted-line relationships over specific activities such as program management and process facilitation, working alongside business partners
Responsible for delivery of select business transformation programs and/or initiatives based on required expertise and experience
Authority is based on reporting structure, and a connection to enterprise-wide program definition
Examples
PMO
Process Redesign
Finance Transformation

5. The resulting interaction model helps to provide a framework for the team structure, capabilities and governance model required to support this defined role
Dimension
Spectrum of Choices
Centre of Excellence
Hybrid
Shared Service 1
Management and Decision Making
Influencing role, advising Business Partners
Facilitate, working for and with Business Partners
Definition and delivery of specific programs or projects 2
Methodology and Tools
Documented methodology and tools to support
Project-specific approach based on defined methodology
Heavy reliance on subject-matter expertise | experience 3
People
Small dedicated team, relationship-building skillset
Enabling function, with key quantitative and qualitative skillsets
Dedicated function, with proven expertise and experience 4
Metrics and Reporting
Defined functional performance metrics aligned to business
Help to define business benefits and track realization
Performance metrics tied to program or project success

6. What are your target capabilities?
In addition to definition of the role and interaction model required, it is important to remember that capability will be built over time, regardless of which model is chosen
Capability Level
Characteristics
BT Capability
Function well defined
Dedicated resources trained and in place
Processes and tools are optimized
Core resources support functions and LOBs
Processes fully documented and followed
Metrics and targets defined
Resources identified but little central expertise exists and/or ongoing coordination
Processes are defined but not always consistently followed
Common tools exist and are used
Success depends on key individuals
Processes performed intuitively
Resources not linked or coordinated across organization or projects/initiatives
No dedicated resources
Processes and tools do not exist
Ad hoc projects and performance
Ongoing excellence in managing an array of programs and/or projects concurrently
Able to manage smaller ad hoc projects and initiatives
“Initial”
Level 1
“Repeatable”
Level 2
“Defined”
Level 3
“Managed”
Level 4
“Optimized”
Level 5
Objective
What are your target capabilities?

7. Based on our time working together, and our experience with other organizations, we would offer the following lessons learned…
Critical Success Factors
Benefit
Risk
Driven by the Business
Ownership of the problem definition and solution needs to be by the business
Unclear accountability and decision-rights
Ensures relevance, sustainability
Linkage to Enterprise Projects
Function should be aligned with broader identification, definition and prioritization of organizational priorities
Marginalizes function and capability
Builds pipeline of opportunities
Focus on Qualitative Skillsets
Strongest competency to help build function and role will be driven by ‘soft skills’
Ability to navigate dynamic process
Builds culture of collaboration
Define and Track Value Creation
Well-defined business benefits defined upfront, alongside mechanisms to monitor and track value creation
Mitigates cost centre impact
Measures ‘functional’ contribution

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