on May 20, 2023 in Digital Transformation

Change versus Transformation

For years, transformation has been a buzzword and a catchall term for how organizations make the right path to achieve their full potential. In business presentations and at workplace meetings, the words “change” and “transformation” are lumped together and often used interchangeably. While both the terms are connected in terms of usage and outcome, their distinction is critical if organizations were to survive the competition and to adapt quickly to vagaries in their business environment.

Change refers to planning and implementing a specific set of actions to make something that exists now look better, work faster, or sell cheaper.  In other words, change necessitates one to becoming familiar with the current situation and then working toward reconditioning or improving the existing things.

A change can either be small and incremental or be large and complex. It can be local that impacts just a section of the organization or global that engulfs the entire organization. It is often a response to certain disadvantageous circumstances in the organization such as higher cost of goods, poor conversion rate of prospects, frequent delays in production, or higher churn rate of employees. Irrespective of the nature of change and extent of its impact, change is something that needs to be continually monitored and maintained.

If change makes something better, transformation makes a better something. Change makes old things look better while transformation replaces the old with new. While change connotes the implementation of several finite initiatives that may or may not affect the whole organization, transformation focuses on a portfolio of interdependent or intersecting initiatives that aims to reinvent the organization as a whole. Whereas change focuses on the execution of a pre-defined shift, transformation seeks to break with the past to discover or invent a business model with an eye toward the future. Transformation is much more unpredictable and fundamentally shifts the way an organization operates, and as such, it involves significantly higher risk to the organization.

In general, business transformations are led by the C-Suite to ensure that their organization survives and stays ahead of the competition. It is an approach that attempts to align the organization’s activities relating to people, process, and technology more closely with its business strategy and vision. This decision is enacted in order to make an organization “future-proof.” A few factors that influence the C-Suite to resort to business transformations are the availability of newer technologies for an increased production capacity, shifts within the market segments creating new service channels, or an M&A activity opening up a broader set of product offerings.

To state the contrast between change and transformation clearer, change initiatives may be included within a transformation, but certainly not the other way around. Even if change management leads to the success of a couple of initiatives within the transformation portfolio, the overall transformation could still fail.

How to differentiate a change from transformation?

To recognize a transformation from a change, consider the following key aspects:

  • Scope – Changes tend to be so narrower and more incremental in nature that it leads to a tune-up in the existing system. If an adjustment is broader in scope that involves many functions, regions, products, or services and it tends to displace the existing system to a newer system, then it is likely that it is a transformational effort.
  • Schedule – While not always true, transformations tend to be longer due to the broader organizational scope. Changes usually happen within a functional area or a business unit whereas transformations often disturb every process and person in the organization.
  • Focus – Change aims to modify outward practices, whereas transformation engages inward
Why a platform to enable Transformation Management?

Because transformation involves a higher degree of risks, a fine alignment of people, processes, and technology is critical. Discrete change initiatives might be able to succeed without sufficient alignment, but transformation requires a much broader set of capabilities. In particular, transformation requires a more dynamic coordination of resources (both human and financial), stronger collaboration across organizational silos. As the transformation progresses, a continual communication all the way up to the senior leadership is essential for its success.

Of course, transformation management consultants and change champions can help in transformation in a variety of ways, but they need to be empowered with the right set of tools to collect all relevant data from multitude of sources, manipulate and dissect them in variety of ways to make business sense, and to render visualizations for the leadership team to make decision-making based on facts and supporting evidences.

One such tool that empowers the C-Suite to effectively manage business transformations is Inpensa. The Inpensa platform helps organizations keep transformational initiatives together in one place, while giving the senior leadership, in real time, the insight needed to continually monitor and reprioritize their portfolios to meet their business objectives. The tool is not meant to replace the existing project management tools, but rather a complementary strategic tool that provides “project-like” real-time data at the portfolio level for the C-Suite to more effectively manage transformations.


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