Business Transformation Management
The Business Transformation Management Methodology (BTM²) is a four-phase holistic and integrated business transformation management methodology developed by SAP Business Transformation Services and their extended network of academic and business partners throughout the world.
This post serves as an introduction to an intensely documented approach to holistic business transformation management, which addresses the transformation journey from strategy through to business benefit realisation and everything in between.
Strategy More Difficult to Deploy Than Develop
It is often said that strategy is three times more difficult to deploy than develop, which explains why so many strategies result in a painful execution journey for everyone involved. Budgets and timelines are frequently exceeded and stakeholders get tired of the noise excreted from the project, programme or portfolio due to inadequate transformation orchestration.
The colourful benefits on display in the business case begin to fade as it becomes clear that the planned return on investment is diminishing as more time and resources are sucked into the initiative. This is not to mention the fact that the people and business areas that will inherit the new world, are ill prepared.
This is a reality in many companies, because they lack the right transformation tools and transformation management capabilities. The failed BBC Digital Transformation is one example, and thousands of others are swept under the carpets of companies who thrive on operational excellence, but discover to their cost that, transformation excellence requires a very different set of capabilities.
"By 2018, 70% of siloed digital transformation initiatives will ultimately fail due to insufficient collaboration, integration, sourcing or project management."
BTM² was the world's first holistic business transformation management methodology that provides a framework with clear phases, deliverables and corresponding methods. It is a generic framework, which can be applied to different business transformation use cases, and is not specific to one business function, technology or industry.
BTM² is a leading holistic and integrated business transformation methodology which is based on academic and business research and has been used and validated in multiple business cases. It is described in this 348 page reference book which refers to countless external resources. So this article can serve only as a short introduction to the mission critical subject that many organisations still struggle to get right.
Four Phases of Transformation
There are four phases in the of BTM² transformation lifecycle, which are:
Nine Transformation Management Disciplines
BTM² consists of nine transformation management disciplines which are:
- Meta Management (Leadership, Culture, Values, Communication)
- Strategy Management (Transformation Direction)
- Value Management (Transformation Direction)
- Risk Management (Transformation Direction)
- Project and Programme Management (Transformation Enablement)
- Business Process Management (Transformation Enablement)
- IT Transformation Management (Transformation Enablement)
- Organisational Change Management (Transformation Enablement)
- Competence and Training Management (Transformation Enablement)
Transformation Management Components
The illustration above shows a very high level of BTM². The next level down is shown in the chart below and a detailed body of knowledge resides within each of the 65 components.
An Introduction to Each Management Discipline
In the context of business transformation, Meta Management provides the overarching frame for a business transformation and provides the linkages amongst the disciplines and also the management structure, which will allow the transformation process to be effective. It addresses individual disciplines which include guidelines, leadership, culture, values, and communication.
In the context of business transformation, Strategy Management primarily addresses the Envision phase of the transformation life-cycle, during which a strategy is developed. Strategy Development involves the selection of appropriate team members, collection of data, analysis of transformation needs and readiness, design of a business vision, and a business model and the definition of an integrated transformation plan.
In the context of business transformation, Value Management involves defining the business benefits and changes needed to realise them, evaluating the feasibility of making the changes successfully, and producing an evidence-based, rigorous business case and supporting benefits realisation plan. Value Management relies heavily upon the engagement of stakeholders in the preparation of the business case and benefits plan to create the knowledge and commitment required to realise the benefits described in the business case.
Risk management provides fundamental guidance to the planning, development and effective execution of a business transformation. It is vital that business transformation managers to manage the risks that relate to the process of transforming their organisation towards a desired future state and those risks that relate more to the possibility that this desired state becomes either obsolete or sub-optimal.
Business Process Management
Business Process Management defines the scope of process changes needed for the expected improvements in performance. To make the transformation effort a continuous success, business processes have to be considered from a strategic perspective. The identification of end-to-end business processes and the assignment of responsible process owners is a major task. It is important to understand that process management does not equal process modelling, but rather the relationship between IT, Business and People related tasks.
IT Transformation Management
IT Transformation Management evaluates the impact of current IT processes, competencies and systems on business transformation, and vice versa. It assesses and enables solution readiness of the business, defines and assesses the gap between the as-is and to-be of IT, deploys IT operations and services, and implements IT governance. It also improves IT operations and services, and manages the IT lifecycle.
Organisational Change Management
Organisational Change Management (OCM) addresses the human element of business transformation. It deals with the people who have to change their ways of working and involves setting up a foundation for effective OCM with respect to governance and assessing organisational change readiness. Establishing and implementing stakeholder communication and performance management strategies, and continuously receiving feedback to make improvements is key.
Competence and Training Management
Competence and Training Management provides qualification and enablement with respect to the competences required for business transformation, and the strategic core competences vital for the company's future success. Competence and Training Management identifies and analyses training needs and objectives, develops training measures for the identified gaps, foster the learning transfer and analyses the success of the measures.
Project and Programme Management
Programme management aims to support the implementation of the transformation strategy in order to achieve the business benefits described in the business case. Programme management focuses on high-level specification and the “why and what” of transformation. It includes stakeholder management, benefit realisation, dependency management, transition management/change acceptance and integration with corporate strategies. Project management focuses on detailed specification and the “how” of implementation, along with control of activities to produce products.
Listen to a BTM² Introduction
The Business of Digital Transformation
If digital business transformation efforts are to be successful, all of the above nine transformation management disciplines need to be adequately addressed, and it is worth noting that technology is just one of nine disciplines in the list. This highlights the fact that transformation is less about technology and more about people and business.
Organisations need to ensure that their digital business transformation leaders do not fall into the pitfall of placing an unbalanced emphasis on technology, process and some project management, while paying lip-service or light touches to the other transformation management disciplines. Research has shown that this common error is the basis for countless failed and struggling transformation programmes throughout the world.
Why Use BTM² ?
- BTM² is based on extensive academic research and commercial knowledge
- BTM² helps its adopters build credibility among their business peers
- BTM² is an objective, unbiased framework to identify and solve business challenges
- BTM² is a ideal tool for regular and quick assessments of business transformation
- BTM² addresses both the rational and irrational aspects of business transformation
- BTM² distinguishes managers/leaders who use a proven approach to transformation
- BTM² creates a competitive advantage
- BTM² is not focused on any particular technology or company
- BTM² is open for any organisation to use without having to engage a partner
- BTM² provides guidance, support and structure for transformation programmes
Are there any certified BTM² experts I can turn to?
The Business Transformation Management Methodology (BTM²) is accompanied by two levels of certification:
- Business Transformation Program Manager (BTPM)
- Global Business Transformation Master (GBTM)
There are now probably a little over 1,000 certified BTPM practitioners and fewer GBTM practitioners in the world. Many are the senior consultants that reside within SAP's Business Transformation Services division, and some can be found in firms such as Daimler, LG, Samsung, DHL, and Unilever, etc. A small number of independent professionals such as Rob Llewellyn have also been awarded the certifications.