While the vast majority of executives (86 percent) said that business transformation is necessary for continued success, many are struggling with it, according to an Oracle Primavera study of 534 executives from large global enterprises.
The study reveals that one in five respondents felt that their attempts at transformation had failed, and three in five have not yet attempted a transformation.
In addition, nearly half (48 percent) of executives said they believe their organization is only somewhat or not at all prepared to successfully execute a business transformation today.
Top challenges to successful business transformation are related to the ability to accurately account for, predict and build contingencies around risk.
"In general, increased competition, economic fluctuation, resource constraints, political factors and even forces of nature all pose potential risks," Guy Barlow, director of industry strategy for Oracle Primavera, told eWeek. "What is different today in our increasingly interconnected economies and supply chains is how quickly these risks can develop and deepen across an enterprise, industry, or region. The ability to take informed action quickly is increasingly essential business currency for transformational success."
Nearly four in 10 (39 percent) said failing to anticipate market changes was the biggest planning challenge threatening their business transformation activities, while 35 percent said misjudgment or failure to anticipate risk factors posed a substantial threat.
In addition, 30 percent pointed to the inability to evaluate and model different options or plans, as well as ensuring a standardized/consistent approach presented challenges (29 percent).
Global executives said that changes in client expectations and technology advances are key internal drivers for business transformation today, followed by a shifting competitive landscape.
This means they need to innovate to do things such as develop new business models, rationalize their portfolios or improve processes to stay ahead of the curve—82 percent cited the need for innovation, and the increased ability to develop and deliver new products and services to the market and clients, as a very important external driver of the need for business transformation.
Executives rated a balanced scorecard showing key metrics and achievement toward goals (46 percent), understanding the true impact of a proposed change to an initiative on all other initiatives across the organization (40 percent) and a clear summary of costs associated with the initiative (40 percent) as the capabilities most critical to a successful transformation execution.
In percentage terms, roughly twice as many of those who feel extremely well prepared to execute a business transformation (versus total respondents) felt they were very well equipped for these challenges.
Additionally, top reasons for successful initiatives include support from leadership (51 percent) and strong, competent execution (48 percent).
"Businesses will have to get better at transformation or face the daunting reality of obsolescence. While charting the course to true transformation will not happen overnight, there are steps organizations can take today to set the foundation, not only for a single successful transformation, but for the many future iterations of transformation that they will require as their market continues to grow and evolve," Barlow explained. "While many factors go into becoming a transformation-ready enterprise, EPPM solutions are critical in aligning these factors and providing the visibility, control, and accountability required to move forward confidently."