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INTERVIEW QUESTION:

Describe some key differences between business automation and business transformation

Posted by Chris Adams

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Categories: Business Analysis, Systems Analysis, General, Project Management

ANSWER

The differences between business automation and business transformation can be understood by examining them across a few key areas.

Focus
Approach
Who/What Drives It
Breadth of Impact
Scale of Investment

Business Automation

Focus: Business automation focuses on what already exists and how to make it better, cheaper, and more efficient. This places the focus on existing business processes.

Approach: The approach is usually that of incremental improvement to continuously make things better over time.

Who/What Drives It: Usually automation projects are driven by the IT side of the organization. IT will manage the project with input and limited support from business stakeholders.

Breadth of Impact: The impact on business is rather limited with the exception of those who are directly involved with the newly automated process. But the impacts are mostly technological.

Scale of Investment: Automation projects, being incremental in nature and limited in scope, are usually relatively small IT budget expenditures with very clear returns on investment.

Business Transformation

Focus: Business Transformation focuses on where the business is going. Therefore the focus tends to be on data in order to understand the current environment and predict what is possible and the direction to take the business.

Approach: The approach is often a large scale, many changes at once, reimagining of how the business operates.

Who/What Drives It: Transformation projects are driven by the business and by its strategic goals with IT in a supporting role. The catalyst for such projects can be externally driven as well in order to stay competitive within an industry.

Breadth of Impact: The impact on business, and also on its clients and customers, is extensive with significant cultural changes occurring throughout many different areas. Little remains unaffected.

Scale of Investment: Transformation projects are relatively large in scale. The drivers that necessitate transformations are the primary motivator and therefore sometimes return on investment is uncertain. But the projects must happen for the company to stay relevant.

The table below is a more concise summary of the two.

Business Automation	Business Transformation
Focused on business processes	Focused on data
Incremental improvements	Significant changes in the way business is done
Typically driven by IT to meet business problems	Typically driven by the business and business related drivers
Primarily technological change internally	Significant cultural changes, both internally and externally
Smaller expenditures in IT budget with clear return on invest	Large investment with uncertain returns

Based on an excerpt from the webinar "The BA and Digital Transformations", presented by Steve Blais

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