by Betsy Burton

I have been thinking a lot about the hype regarding business transformation. And more recently I am hearing TSPs and industry watchers talk about “business innovation” as the new hype term.

There is real value in business automation, transformation, and innovation. But it is important to differentiate these concepts, as they require different levels of investment in your business, people, process, and information. Additionally, your organization may want to support a combination of business automation, transformation, and innovation in different parts of your business.

Business Automation

Business automation is the application of technology and services that minimize the amount and complexity of human work. In other words, business automation is not primarily focused on introducing new business models or processes, or even dramatically changing business models or processes.

The primary focus for business automation is on remediating and optimizing existing business models or processes. As a result, the business strategy planning, change management, and business operating investments are fairly low. Even the technology investments tend to be lower cost and risk because business automation capabilities are largely available within existing applications and services.

A business transformation model requires a careful appraisal of enterprise software, an automation definition that suits your enterprise, and more strategic planning focused on new ideas.

Business Transformation

Business transformation is the process of specifically designing new business strategies, processes, and operations to support new business models (such as digital business) and changing existing solutions, systems, processes, and information to support their new business models.

Business transformation requires significant business strategy and modeling investments because the primary focus is on creating and supporting completely, or at least largely, different business operating models. Business transformation requires investments in business change management, governance, and performance metrics in addition to investments needed to support new technology to enable transformation (applications, services, chatbots, AI, etc.).

Business Innovation

Supporting business innovation means your organization is specifically creating new business models that are different from what has been supported in your market in the past. In most cases, this means taking advantage of new and emerging technologies to innovate in your markets.

Business innovation requires a significant business and technology investment and is inherently higher risk. Traditionally, business innovation efforts have been supported by start-ups businesses, or as pilots within larger organizations. However, the COVID pandemic as well as current economic pressures are forcing more organizations into the position of needing to support business innovation.

Be Clear About What You Are Doing

It is critical that organizations do not just fall into the market hype around automation, transformation, and innovation; not all organizations need to transform or innovate, either across their entire business or within a part of their business.

It is also critical that organizations be clear about where and how they are supporting automation, transformation, and innovation, and recognize the investments that are needed for each of these.

Bottom Line

Differentiating business automation, transformation, and innovation is not just a semantic argument. Business and technology leaders must be careful to not conflate or confuse these concepts.

Organizations that seek to support business transformation and innovation that do not invest in change management, governance, business planning, and supporting technologies/services risk doing more harm than good.

This concept is challenging. Need help sorting through the confusion and clarifying your specific business needs? Schedule an inquiry >>