November 18, 2014 (Tue): Oracle Corporation, the world’s leading IT solution provider, yesterday unveiled the findings of its recent study in partnership with Forbes titled “Making the Change: Planning, Executing and Measuring a Successful Business Transformation” which surveyed 534 executives from large global enterprises.
While the majority of executives (86%) said that business transformation is necessary for continued success, many are struggling with it. 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.
Overall findings from the study include:
- Continual transformation is crucial to staying ahead of the curve but many business leaders say their organization is not well prepared. Eighty-six percent of executives believe their organization should execute a business transformation initiative regularly to stay competitive. But nearly half (48%) of executives believe their organization is only somewhat or not at all prepared to successfully execute a business transformation today.
- Execution can make or break it. The most often cited cause for failure in the rollout of a business transformation initiative is inefficient execution (41%), followed by resource and budget constraints (35%). Additionally, top reasons for successful initiatives include support from leadership (51%) and strong, competent execution (48%).
- It’s not just about efficiency, it’s about innovation. Global executives say that changes in client expectations and technology advances are key internal drivers for business transformation today, followed by a shifting competitive landscape. 82% cited the need for innovation—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.
- The key to executing a successful business transformation is a clear understanding of financial reality. Executives rated a balanced scorecard showing key metrics and achievement toward goals (46%), understanding the true impact of a proposed change to an initiative on all other initiatives across the organization (40%) and a clear summary of costs associated with the initiative (40%) as the capabilities most critical to a successful transformation execution
- Failure to anticipate and account for risk can quickly derail a business transformation. Thirty-nine percent said failing to anticipate market changes was the biggest planning challenge threatening their business transformation activities, while 35% said misjudgment or failure to anticipate risk factors posed a substantial threat. In addition, 30% pointed to the inability to evaluate and model different options or plans, as well as ensuring a standardized/consistent approach presented challenges (29%).
- Adoption of enterprise project portfolio management (EPPM) makes a difference. Twenty-seven percent of business transformation leaders leverage EPPM across their entire enterprise, compared with 13% of total executives surveyed; 55% of transformation leaders leverage EPPM across either their whole company or their business unit, compared with 38% of total respondents.
Oracle Primavera Global Business Unit’s senior vice president and general manager, Mike Sicilia shares that for businesses to remain ahead of an ever-changing market and meet rapidly evolving customer demands, they must effectively plan and execute transformational initiatives to create breakout growth and sustainable market leadership.
“Enterprise project portfolio management (EPPM) solutions can help organizations address these challenges and needs simultaneously to support transformational investments on all fronts.”
The study surveyed 534 senior executives (defined as director or above—with 61% of respondents C-level executives) at companies with $1 billion or more in revenues. Respondents spanned the Americas (37%), Europe-Middle East-Africa (EMEA) (29%) and Asia Pacific (34%), as well as a range of industries including professional services (10%), banking and finance (7%), manufacturing (13%), retail (6%) and engineering (6%).