The "6 P's" of Business Transformation - what's required to prepare your business to leverage eCommerce

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When businesses work through an eCommerce replatform project, or investment is put into fixing the existing eCommerce channel, there are teams of people dedicated to the digital tasks at hand.

However, fixing/replacing/enhancing the eCommerce channel is only part of what needs to be done to fully leverage the opportunity. The other "part" is preparing the business: "business preparedness".

This "business preparedness" is called many things, most commonly "Business Transformation" but let's do away with that scary term and simply call it what it is. It's the process of massaging your business in a way that wraps it's business structure and resources around the eCommerce channel.

Physical Retail Example:

To help get this clear in your mind, consider a physical retailer with 200 physical stores around the country.

There will be a head office entity in place and its entire existence is designed to support the physical stores in every way possible to drive sales and success from each location. Now imagine that structure, the resources, the investment, and the business processes being spun around and designed to drive success for the eCommerce channel.

You need to look no further than the likes of Warby Parker and Casper to see other disruptive retailers who have done exactly this. They are perceived as being "disruptors" but all they did was flip the retail model and focus their business structures around the online channel first, and physical retail second. They are now the clear retail-leaders in their space.

Transformation Brings Business [Cohesion?

The need to run an iterative business transformation process in parallel with any form of eCommerce enhancement project delivers cohesion and tight alignment between the the digital and physical. Think about it this way...

The enhanced eCommerce channel is meant to be designed to improve its connectedness to two different entities....

  1. Your Customers and,
  2. Your Business

The current version of your business is designed to respond and react to the current version of the eCommerce channel. The new and improved eCommerce channel will bring new things the business was never previously prepared to deal with, such as....

  • New levels of business performance (higher volume of sales)
  • New challenges as a result of new levels of business performance: such as out of stock issues, and business capacity issues
  • New types of customer enquiries/questions (new experiences brings new questions)
  • Different impacts on other departments: sales, the physical store network, customer support

The "6 P's" designs the right type of change:

From over 20 years of working with businesses to evolve, a proven "Transformation Methodology" was born. It's a highly collaborative process between myself and the business.

I know the direction the business needs to take (based on what the eCommerce channel will bring), and the business leaders know business dynamics. Together, we build/design an iterative evolutionary plan that prepares you to harness the online opportunity.

If this transformation/evolution does not happen the result is operational chaos, and introduces the risk of a reduction in business profitability as a result.

The "6 P's":

#1. Predict:

There are two sub-steps to this:

A: We first work together to take existing business performance data and conservatively predict the performance lifts that will come once the new online channel is live and working. This is one of the benefits of collaborating with a specialist in the eCommerce channel and in business transformation. He/she will know how best to calculate the lifts that will come.

B: From the array of predictions made, we plan ahead and define what will happen once these increases hit the business in its current state.

This forms the basis for a business case for change and sets the foundation for change planning.

#2. Plan:

Based on the "Predictions" (in the first "P") we plan an "alternative business reality". This is done to illustrate what the business needs to look like to handle what the predictions suggest is coming.

The "Plan" also explains who to mitigate the risks called out in the the "Prediction" step. The outputs of this "Planning" step is defining a "Phase 1 Evolution" which defines the first batch of changes, which can include...

  • New workflows, new processes
  • Introduction of new resources (people and software)
  • Potential new restructuring of department roles

A subset to this is to identify how best to monitor all the changes (once they are in place) to ensure they are working to the new standard. These will be business specific KPI's.

#3. Prepare:

This is the step where a "Phase 1" transformation scope is agreed on (from the "Plan") and the business starts to get ready for the change. This is the step where the plan is implemented.

The pace of the execution of this first phase is (ideally) in alignment with the completion of the Replatform project timeline (or whatever enhancements that are being applied to the online channel).

#4. Practice:

In preparation for the new online channel, the business sets up scenarios (based on the predictions) and allows the business to run the "new state" ahead of time.

This is where the business can see some or all of the new changes in action in a "safe/closed test environment". The outputs of this "Practice" step is to monitor and modify any new processes (or business change) that does not produce the desired result.

The alternative is to put the new changes live before the replatform project is completed. This allows time for the changes to embed into the business before new online channel is live.

There is always a teething period when changes are implemented. To work through the teething before the business performance increases is one way to de-risk the business evolution.

#5. Put live:

The business agrees on a "Hard Go Live" date where all the business launches the change. As stated earlier, the ideal time for this is in alignment to when the new online channel is live.

#6. Post Live Audit:

As part of "Planning" step, there is a need to define how best to monitor how the business change is operating in the context of delivering business wide value and supporting the new online channel.

This step is where the close monitoring of these KPI's are being conducted. This is crucial for two reasons...

  1. The business needs immediately quantitative and qualitative feedback to define if the changes are adding value.
  2. This data becomes critical proof to stakeholders, the investment is showing clear signals its paying off.

Once the business leaders can see positive metrics, they are more likely to embrace change and approve future phases of transformation.

These data-driven proof points plays a key part to the science to change.

Then a "Rinse-Repeat" of the 6 P's commences.

Work with a Specialist:

While the above seems to make sense, the recommendation (not biased at all) is to work with a specialist for the following reasons...

  1. Internal staff who lead change always come with a bias. They will do everything to protect their own patch and not look out for the best interests of the wider business.
  2. Strategic planning needs to happen prior to this type of change commencing and must be approved by the Exec team.
  3. A key part of the direction of any business transformation comes from the knowledge and understanding as to what the new eCommerce channel is going to look like and how it will impact the business. Having this clear understanding is a specialist skillset.
  4. There is a science to business change. To have someone who knows how to navigate change makes the experience less impactful on the employees who are affected by it.

Conclusion - "Wait and See" does not work:

Many business leaders take the "wait and see" approach. Meaning, they would rather not change the business until they see the lifts that come from the eCommerce channel. For smaller businesses, this is their way of de-risking the costs of change, investment in training and potentially increasing headcount.

However, this "wait and see" approach becomes a self-fulfilling prophecy in the sense that, if the business is not structured to support the online channel, realising the opportunity total business growth will not be realised. It's a way of setting up the eCommerce channel to fail in some respects.

Are you wondering what change could look like for you? More than happy to have a chat and talk through the above process and how it could look for your business.

This article was as tagged as Best Practice , Business Transformation , Digital Strategy , Ecommerce

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