Enterprise Transformation 

What Is Enterprise Transformation?

Enterprise transformation refers to a fundamental change in the way a business operates. This could include a change to an organization’s core technology, the way the company structures its teams, or how it develops and sells its products.

What Are Examples of Enterprise Transformation?

Enterprise transformation can take many forms. Let’s review a few common types of these fundamental changes—with real-world examples of each.

1. Product/solution transformation.

One common type of enterprise transformation is when an organization makes a fundamental shift to its products or services. These shifts are becoming more common in the digital era. Businesses are discovering they need to adapt their solutions to address both the ever-changing demands of consumers and the ever-growing landscape of competitors.

Real-world examples: Adobe and Microsoft

In recent years, Adobe and Microsoft have transformed the way they package and sell their solutions. For most of their history, both companies sold traditional software applications, using packaged physical media such as CD-ROMs, which customers purchased one time and installed.

Recently, both businesses began turning their solutions from packaged products to ongoing services—offering digital subscriptions to their software. Customers can now buy Adobe Creative Suite or Microsoft Office, for example, without installing any physical media on their computers, and they can receive continuous updates to ensure they are always using the latest versions of these apps.

2. Organizational/cultural transformation.

Another type of enterprise transformation is a business’s decision to fundamentally change some aspect of its organizational structure or its corporate culture. This could include transitioning from a working environment with private offices, for example, to an open bullpen in which all employees and managers work in a shared environment of open desks or cubicles.

Real-world examples: IBM and Yahoo!

Businesses such as IBM and Yahoo! have historically been well-known as companies that allowed full-time employees to work remotely.

But in recent years, both IBM and Yahoo! decided to require all employees to report to a corporate office every day. This represented a fundamental change in the companies’ corporate culture, which is why it qualifies as a form of enterprise transformation.

3. Business process transformation.

Still another type of enterprise transformation is an organization’s decision to make a fundamental change to some aspects of its core business processes. One example of this is the move from a waterfall approach to agile for a company’s project management or product development.

Real-world example: Sony PlayStation

Sony Interactive Entertainment, the business division responsible for the PlayStation, historically used the waterfall approach to building products. Over time, the company migrated to the Scrum agile framework to speed and improve its output and to react more quickly to needed changes and updates. But the challenge, even with their newer agile approach, was that Sony Interactive Entertainment’s development team included more than 1,000 engineers across eight cities. This created unpredictable results in the output across the teams.

Then the team’s leadership decided to switch to the Scaled Agile Framework (SAFe), designed to carry the benefits of the agile approach over to larger enterprises.

An Example of Failure to Transform an Enterprise That Needed It

Not every organization embraces the idea of enterprise transformation, even when this type of adaptation is called for. One of the most well-known examples is Blockbuster Video (or, should we say, was Blockbuster Video).

Blockbuster built its business on physical movie-rental stores. In fact, it became the dominant player in this space. Blockbuster also performed a successful enterprise transformation when the dominant video media went from VHS tapes to DVDs.

But when Netflix introduced an entirely new way to rent movies—through the mail—Blockbuster was slow to see the threat. By the time they rolled out a DVD-by-mail service to compete with Netflix, it was too late. Netflix owned the new industry, and Blockbuster failed.

Deeper Dive:

When It’s Time to Pivot Your Product

What Is an Enterprise Transformation Roadmap?

Because an enterprise transformation of any type will affect most if not all of an organization, and will likely take months to implement, this type of fundamental change requires long-term strategic planning. This is why part of the plan should include developing and sharing an enterprise transformation roadmap.

Examples of these types of roadmap could include:

Related Terms

business transformation / digital transformation / agile transformation / change management / change management principles