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How to navigate complex transformation

A framework for sustainable growth in an era of compound volatility

Inside the article:

  • Most companies now manage multiple transformation initiatives at once
  • Despite efforts to improve performance, value is often left on the table
  • Strong leadership and partner ecosystems create a crucial foundation for change
  • By prioritizing four key areas, leaders can better achieve positive transformation results
  • A first step to transformation success is understanding the role of AI, how to measure value, and other elements of the transformation agenda. See our FAQ below.
  • KPMG has experience helping clients across sectors achieve transformation outcomes

The transformation agenda has changed

Multiple, continuous transformations are now a strategic necessity.

Routine performance improvements and cost take-outs are no longer enough. To keep up with market volatility, competition, and technology, companies are pursuing simultaneous transformation initiatives to fundamentally change how they operate.

Value can be hard to achieve.

After automating processes, redefining roles, and introducing new business and operating models, executives often see mixed results that are difficult to quantify. Making sure transformation pays off is increasingly important as the cost of funding projects is rising, and the strategic stakes are higher than ever. 

Companies can master today’s complex transformation agenda.

To meet their aspirations for effective transformation, company leaders should focus on four priorities in the transformation agenda: value creation, culture and people, orchestration, and the technology foundation.

88% of enterprises are running 2+ significant transformation programs at the same time.

Yet common barriers still stand in the way of success, including shortages of resources or expertise, cultural resistance, organizational change fatigue, and technology or data shortfalls. One foundation determines every enterprise’s ability to overcome these transformation challenges: leadership.

Find out how to unlock the full potential of your organization in Transforming the enterprise of the future.

Four priorities for successful transformation

To meet transformation goals in today’s faster-paced and less-forgiving business environment, leaders should take action on four fronts:

01
Clearly define value

Assign a leader responsible for delivering outcomes, identify milestone-based achievements and use advanced tools to measure results.

02
Invest in people and culture

Build belief in the vision for change, demonstrate that leaders have “skin in the game” and upskill the workforce to thrive in an AI-driven environment.

03
Learn to orchestrate multiple initiatives

Develop a single enterprise view of organizational change, define a clear set of design principles and objectives and track the value of each initiative early and often.

04
Build technology and data foundations

Align the technology roadmap with transformation goals, address technical debt and prioritize projects that add value and give end users tools to empower innovation.

Featured insight

Partner ecosystems are critical to transformation

Companies lean on third parties for expertise, but choosing partners solely to solve a temporary challenge or capability gap leads to missed opportunities. Take an intentional approach to partnering for transformation. Read our full report, “Accelerate growth and innovation with the right partner ecosystem” to learn more.

Featured insight

Don’t leave transformation value on the table

There’s more to successful transformation than introducing new capabilities and finishing on time and on budget. To realize value, transformation must deliver tangible, measurable outcomes. Organizations that take steps early in the transformation process to align key actions with desired results are more likely to achieve the value they seek.

Get more on strategies for delivering business value in Winning transformations put value first.

Access actionable insights

Get the latest thinking on how to realize value from business transformation.

Client stories

Digital transformation boosts a food company’s revenues and margins

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Client challenge

Dawn Foods serves bakers around the world as a maker and distributor of everything from raw ingredients to ready-to-sell goods. After a century in operation, Dawn Foods undertook a complex, multi-functional transformation to become more competitive and accelerate growth.

Key initiatives

KPMG helped Dawn Foods move through every stage of an ambitious digital transformation journey to realize a new operating model. The transformation team first identified and prioritized two dozen initiatives before embarking on a series of operational efficiency improvements.

Business impact

The transformation digitally integrated key functions, including product strategy, supply chain, data and analytics, e-commerce, technology architecture, and the partner network. Dawn Foods saved tens of millions of dollars—money that was used to invest in new processes, technology, and people for the larger transformation. The company met its targets for adoption, revenue, and margin growth.

Embracing data-driven, tech-enabled transformation

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Client challenge

BKV, a natural gas exploration and production company, acquired assets that more than quadrupled its size in just one fiscal year, leading to a flood of data far beyond what they had managed in the past.

Key initiatives

KPMG helped BKV establish a “data smart” approach to data management and governance. This included helping to build a cloud-based data lake to allow analysis of its 5,000-plus wells without increasing headcount; boost data literacy among employees; and create a data governance structure based.

Business impact

The effort enabled BKV to pursue diversification within the energy sector while incubating a new sustainable energy portfolio, supporting the company’s growth n to a top 20 US-based sustainable natural gas producer.

Orchestrating a global symphony for an enterprise transformation

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Client challenge

A global oil and gas company was struggling to manage a $500+ million enterprise transformation portfolio, including a global ERP replacement.

Key initiatives

KPMG partnered with client leadership to review and refine their strategic plan, program governance, and integrated execution, including a target vision and strategy with a new operating model; prioritized initiatives; an implementation roadmap; and change management.

Business impact

Together, we designed and executed a flexible program that hit timelines, aligned to culture, and delivered on both early and ultimate business value targets.

Meeting the culture challenge in healthcare transformation

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Client challenge

Our healthcare client set an ambitious digital strategy to improve innovation and agility, recognizing that  execution depended upon addressing underlying cultural challenges. Leaders felt the impact of these challenges diluted their ability to drive necessary change at scale.

Key initiatives

We worked with senior leaders across functions to understand their perspectives, experiences, needs, and pain points, with a goal of delivering both transformative patient care and financial growth.

Business impact

We helped the client quickly diagnose the cultural challenges and set out recommendations to systematically address these issues through tangible, practical actions that could be incorporated into their transformation approach.

Consumer & retail

Digital transformation boosts a food company’s revenues and margins

Placeholder

Client challenge

Dawn Foods serves bakers around the world as a maker and distributor of everything from raw ingredients to ready-to-sell goods. After a century in operation, Dawn Foods undertook a complex, multi-functional transformation to become more competitive and accelerate growth.

Key initiatives

KPMG helped Dawn Foods move through every stage of an ambitious digital transformation journey to realize a new operating model. The transformation team first identified and prioritized two dozen initiatives before embarking on a series of operational efficiency improvements.

Business impact

The transformation digitally integrated key functions, including product strategy, supply chain, data and analytics, e-commerce, technology architecture, and the partner network. Dawn Foods saved tens of millions of dollars—money that was used to invest in new processes, technology, and people for the larger transformation. The company met its targets for adoption, revenue, and margin growth.

Energy

Embracing data-driven, tech-enabled transformation

Placeholder

Client challenge

BKV, a natural gas exploration and production company, acquired assets that more than quadrupled its size in just one fiscal year, leading to a flood of data far beyond what they had managed in the past.

Key initiatives

KPMG helped BKV establish a “data smart” approach to data management and governance. This included helping to build a cloud-based data lake to allow analysis of its 5,000-plus wells without increasing headcount; boost data literacy among employees; and create a data governance structure based.

Business impact

The effort enabled BKV to pursue diversification within the energy sector while incubating a new sustainable energy portfolio, supporting the company’s growth n to a top 20 US-based sustainable natural gas producer.

Enterprise

Orchestrating a global symphony for an enterprise transformation

Placeholder

Client challenge

A global oil and gas company was struggling to manage a $500+ million enterprise transformation portfolio, including a global ERP replacement.

Key initiatives

KPMG partnered with client leadership to review and refine their strategic plan, program governance, and integrated execution, including a target vision and strategy with a new operating model; prioritized initiatives; an implementation roadmap; and change management.

Business impact

Together, we designed and executed a flexible program that hit timelines, aligned to culture, and delivered on both early and ultimate business value targets.

Healthcare

Meeting the culture challenge in healthcare transformation

Placeholder

Client challenge

Our healthcare client set an ambitious digital strategy to improve innovation and agility, recognizing that  execution depended upon addressing underlying cultural challenges. Leaders felt the impact of these challenges diluted their ability to drive necessary change at scale.

Key initiatives

We worked with senior leaders across functions to understand their perspectives, experiences, needs, and pain points, with a goal of delivering both transformative patient care and financial growth.

Business impact

We helped the client quickly diagnose the cultural challenges and set out recommendations to systematically address these issues through tangible, practical actions that could be incorporated into their transformation approach.

Understand the new transformation agenda

What transformation outcomes are executives prioritizing?

Most executives are focused on improving business performance, boosting return on investment, and growing market share. Additional goals include improving customer experience, successfully entering new markets or channels, and increasing the organization’s ability to pivot quickly and respond to external market forces.

How is transformation value defined and measured?

First, a successful transformation is a fundamental shift in the way an organization does business that spans departments, functions, and business units, therefore, it should deliver significant company-wide improvements. Second, transformation creates three types of value: strategic, financial, and operational. Within each area, organizations should set milestone-based KPIs; ensure data can be gathered to measure results; and use advanced analytics to calculate value and refine efforts through a continuous feedback loop.

Why are KPIs critical for transformation?

The top three ways organizations define transformation success are improved business performance, improved ROI/capital efficiency, and market share growth. However, both top leaders and middle managers agree that they struggle with tracking and measurement. Making sure a transformation pays off has never been more important than at a time when the cost of funding projects is rising, and the strategic stakes are higher. Establishing adequate KPIs is key to making sure transformation efforts capture value as intended.

How does technology enable transformation?

The technological capability gap is the number-one challenge encountered during transformation. A strong technology foundation, including a well-developed technology platform and a data strategy, offers three types of benefits—particularly key for organizations transforming under economic constraints.

  • Strategic: Enhanced decision-making throughout the transformation process to avoid waste, enable better allocation of resources, and achieve a faster path to value
  • Technical: Streamlined implementation processes, reduced technology surprises, improved agility, and lower risk
  • Cultural: Increased support for transformation as employees access tools that help them use their time effectively

Importantly, technology should not be the driver behind transformation. Rather, technology enables companies to achieve the strategic, technical, and cultural benefits of transformation.

How is generative AI impacting transformation?

Generative AI (GenAI) is a tool that can help design and execute transformations, transform operating models and processes, and analyze results. We are working with companies to use GenAI in areas such as:

  • Shared services. In finance, purchasing, and HR, companies are adopting GenAI to help streamline reporting, offload repetitive tasks, and generate communications.
  • Cybersecurity. GenAI helps identify or detect anomalies, fraud, network intrusions, insider threats, and software vulnerabilities.
  • Research and development. Pharmaceutical companies are exploring GenAI’s ability to speed the search for new therapies. In asset management, GenAI can help build ETFs.
  • Software development. GenAI helps companies improve code generation quality, design, and compliance to guidelines so that software developers can spend more time designing and less time coding.

Ultimately, GenAI will help employees within the organization work smarter and faster through advances such as streamlined reporting, a reduction in repetitive tasks, and improved communications.

Why do transformations fail?

Organizations often focus disproportionately on technology and process, forgetting the human element. Insufficient leadership buy-in/stakeholder alignment and an unclear vision are top issues, according to company leaders. When the human experience through transformation is acknowledged and handled well, employees will continue to engage with the new ways of working after the heavy lifting of the transformation is done.

What are the greatest people and culture barriers to transformation?

Our brains are wired to resist change, and leaders can have a tough time convincing people to embrace transformation. Leaders can help counter this issue by modeling change through behavior, properly aligning resources to prevent employee burnout, and encouraging feedback loops to address what’s not working. 

How can organizations manage overlapping transformation initiatives?

Organizations are managing multiple transformation initiatives, accelerating complexity. Those that succeed tend to have superior capabilities in drafting detailed, outcome-based roadmaps, an enterprise-wide view, and effective governance. They are then able to juggle several initiatives, understand where they intersect, and mitigate risk.

We can help you meet your transformation goals

Service
Achieve transformation and make the difference
An integrated, cross functional approach to organizational change focuses on digitizing processes, optimizing operations, and capturing value — driving toward growth.

KPMG professionals work closely with company leaders to determine their organization’s unique definition of transformation value, and to address technology, cultural and other barriers to success. As you pursue multiple, simultaneous transformation efforts, we show you how to orchestrate through the complexity, making technology and data work hard for you.

From initial vision, to planning and execution, to analysis and improvement, we are with you every step of the transformation journey. 

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