Business change relates to planned endeavours structured to improve organisational performance, respond to external factors or accomplish strategic objectives. To successfully implement change, accurate planning, effective governance and knowledge of both opportunities and risks are required.
The Business Change Lifecycle
The business change lifecycle is a framework to manage change from initial concept to benefits realisation. Different models are available, but the common stages are, as defined by Sandford (2022):
- Alignment - Ensuring proposed change supports organisational strategy and objectives. It should meet company policy and legal obligations.
- Definition - Defining business needs, problems and requirements through root cause analysis techniques.
- Design - Developing and evaluating potential solutions by stating specifications, developing and testing solutions, and identifying business processes and software required.
- Implementation - Planning, delivering and embedding the change.
- Realisation - Measuring outcomes and evaluating benefits that have been achieved and what needs to be investigated.
Business Analysts are key players in supporting the organisation to progress through stages of the lifecycle by gathering requirements, managing stakeholders, evaluating impacts and assisting with delivery and implementation.
Drivers of Change
Change is typically prompted by internal or external causes.
Internal drivers may include process inefficiencies, cost reduction initiatives, growth objectives, organisational restructuring, technology upgrades, cost pressures and skills shortages. External drivers may include customer expectations, regulatory changes, market competition, economic conditions, emerging technologies and social and environmental pressures.
Understanding the drivers supports organisations in defining the urgency, scale and priority of change initiatives. Change drives business, and for it to be successful, it must be thoroughly managed through consultation and frequent discussions, while external collaboration should be considered accordingly (Olaghere, n.d.).
Risk Appetite
Risk appetite relates to the risk level that an organisation is inclined to accept when pursuing its goals. Some companies are more open to risks to grow and innovate, while others prefer a stable and controlled route. A clear evaluation of an organisation’s risk appetite must consider innovation decisions against investment capacities, regulatory compliance and digital resources to assess its capabilities for achieving its objectives.
Understanding risk supports key stakeholders in assessing their options for change and selecting approaches which align with strategic goals. As IRM (n.d.) states, “It is often said that no company can make a profit…[or] achieve its objectives…without taking risk”.
Risk Categories
A variety of risks are present across business changes, and they should be evaluated and managed appropriately. According to UK Government (2023), some common risk categories include:
- Strategy risks - Arising from recognising and pursuing a strategy that is not well-defined.
- Operational risks - Affecting internal processes, people or service delivery.
- Legal risks - Failure to take appropriate measures to adhere to legal or regulatory requirements.
- Financial risks - Impacting costs, budgets or expected benefits, resulting in less favourable investment returns.
- People risks - Ineffective leadership, insufficient resource capacity and skills gaps or reduced engagement.
- Technology risks - Technology not delivering expected outcomes.
Identifying risks and putting in place mitigation measures allow organisations to reach their targets more effectively.
Venkatraman’s Business Transformation Model
Venkatraman’s Business Transformation Model describes how technology can support different levels of transformational change.
The model states five levels from a “bottom-up” approach (Shiels et al, 2003). Localised Exploitation improves existing activities. Internal Integration connects internal processes. Business Process Redesign transforms processes. Business Network Redesign transforms organisational relationships. Business Scope Redefinition creates new business models.
This model supports business analysts in comprehending technology-driven change more appropriately and classifying the range from operational improvements to strategic transformation.
Change Projects versus Change Programmes
Organisations usually deliver change through projects or programmes. According to Lesingham (2020), a project focuses on precisely defined outcomes within specific timescales and budgets, whereas a programme coordinates multiple related projects to gain wider strategic outcomes and benefits.
For example, the delivery of a customer relationship management system may be classified as a project, whereas a broader digital transformation proposal which involves technology, processes and culture change would be classed as a programme.
Building Successful Change
Successful business change demands more than solution delivery. Organisations must ensure that there is an understanding of the business change lifecycle, drivers of change, risk appetite and transformation approaches. Business Analysts can support companies through these phases to improve decision-making and deliver sustainable change.
Action Point
Identify a recent or current change proposal in your company and define at which stage it is on the business change lifecycle. Determine the key drivers for change, evaluate risk appetite and group any major risks, and state whether it should be classified as a project or programme. Consider its place in Venkatraman’s model and how benefits should be realised.