Change Management.ppt

7/29/2019 Change Management.ppt

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OHT 10.1

Marketing Insights Limited 2004

Chapter 10

Change management


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OHT 10.2


Learning objectives

Identify the different types of change that need

to be managed for e-commerce;

Develop an outline plan for implementing e-

commerce change;

Describe alternative approaches to

organisation structure resulting from

organisational change.


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OHT 10.3


Issues for managers

Should we change organizational structure in

response to e-business? If so, what are the

options?

How do we manage the human aspects of theimplementation of organizational change?

How do we share knowledge between staff in

the light of high staff-turnover and rapidchanges in market conditions?


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OHT 10.4


Key change management issues

Schedule what are the suitable stages for introducing change?

Budget how do we cost e-business?

Resources needed what type of resources do we need, what aretheir responsibilities and where do we obtain them?

Organizational structures do we need to revise organizationalstructure?

Managing the human impact of change what is the best way tointroduce large-scale e-business change to employees?

Technologies to support e-business change the role of

knowledge management, groupware and intranets are explored. Risk managementapproaches to e-business led change.


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Key factors in achievingchange

Figure 10.1 Key factors in achieving change


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Scale of change

Hammer and Champy (1993) defined BPR as

the fundamental rethinking and radical redesign of business processes toachieve dramatic improvements in critical, contemporary measures ofperformance, such as cost, quality, service, and speed.

Fundamental rethinking re-engineering usually refers to changing ofsignificant business processes such as customer service, sales orderprocessing or manufacturing.

Radical redesign re-engineering is not involved with minor, incrementalchange or automation of existing ways of working. It involves a completerethinking about the way business processes operate.

Dramatic improvements the aim of BPR is to achieve improvementsmeasured in tens or hundreds of percent. With automation of existingprocesses only single figure improvements may be possible.

Critical contemporary measures of performance this point refers to theimportance of measuring how well the processes operate in terms of thefour important measures of cost, quality, service and speed.


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Different scales of change

Term Involves Intention Risk of failureBusinessprocess re-

engineeringFundamental redesign

of all main company

processesLarge gains in

performance

(>100%?)Highest

Businessprocessimprovement

Targets key processes

in sequence for

redesign(


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OHT 10.8


Project management activities

Estimation identifying the activities involved in theproject, sometimes referred to as a work breakdownstructure (WBS).

Resource allocation after the initial WBS,appropriate resources can be allocated to the tasks.

Schedule/plan after resource allocation, the amountof time for each task can be determined according tothe availability and skills of the people assigned tothe tasks.

Monitoring and control monitoring involves ensuringthe project is working to plan once it has started.Control is taking corrective action if the projectdeviates from the plan. In particular the projectmanager will want to hit milestones


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Stages in developing ane-business solution

Figure 10.2 Stages in developing an e-business solution


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An example web site developmentschedule for the B2C Company

Figure 10.3 An example web site development schedule for The B2C Company


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Automating the employeedevelopment process

Figure 10.4 Automating the employee development process

Source: Confirmit Copyright 2003 FIRM


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Organisational structures fore-business and e-commerce

Organizational structure Circumstances Advantages Disadvantages(a) No formal structurefor e-commerce Initial response to e-commerceor poor leadership with no

identification of need for

change.

Can achieve rapid response to

e-commerce service

responses (e-mail, phone).

Priorities not decided logically.

Insufficient resources

Poor quality site in terms of

content quality and

customer

(b) A separate

committee ordepartment managesand coordinates e-commerce

Identification of problem and

response in (a) Coordination and budgeting

and resource allocationpossible.May be difficult to get

different departments todeliver their input due to

other commitments

(c) A separate businessunit with independent

budgetsInternet contribution (Chapter

6) is sizeable (>20%) As for (b), but can set owntargets and not be constrainedby resources. Lower riskoption than (d)

Has to respond to

corporate strategy. Conflict

of interests betweendepartment and traditional

business(d) A separate operatingcompany Major revenue potential orflotation. Need to differentiate

from parentAs for (c), but can set strategy

independently. Can maximize

market potentialHigh risk if market potential

is overestimated due to

start-up costs


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Summary of alternative organizational structuresfor e-commerce suggested in Parsons et al.

Figure 10.5 Summary of alternative organizational structures for e-commerce

suggested in Parsons et al. (1996)


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Hallowell on scalability 1

described as virtual (either pure information orautomated) andphysical (requiring some degree ofhuman intervention).

because the nature and quantity of physical servicenecessary to deliver value to customers influences thequantity of human intervention required, it also influencesa firms ratio of variable to fixed costs, which alters itsscalability.

The paradox comes in that while reduced scalability is

viewed negatively by many venture capitalists andproponents of ecommerce, the cause of that reduction inscalability, human intervention, may help a firm todifferentiate its offering to customers, thus providing asource of competitive advantage.


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Hallowell on scalability 2

For firms that are very high on the scalability continuum, the need for physicalservice does not present a scalability problem.

At these firms, information is the core service offering. Physical service is

relatively insignificant, both from customers perspectives (use of physical

service is infrequent,if at all) and from the firms perspective (it represents a

very small portion of total costs).

Thus, these firms do not rely on physical service (and the employees it

requires) to differentiate their offering; their differentiation tends to come from

the quality of their content and the ease with which users can access it.

In contrast, firms that sell non-information services such as travel, or goods

such as books, toys, or antiques require significantly more complex physical

service operations. The degree to which they need more physical service is

inversely proportional to the degree to which they are scalable.


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Outsourcing example

Amazon:

manages customer relationships through its

website while relying on publishers for productdevelopment, Visa and Mastercard forrevenue collection and UPS, the parcelservice, for logistics. It also outsources much

of its call-centre management to specialistsuppliers.


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Outsourcing benefits activity


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BUT

The snag, as many failed internet ventures

discovered, is that it is hard to co-ordinate the

activities of business partners without a large

supporting bureaucracy. Poor customerservice and higher-than-anticipated costs

often resulted. Amazon is one of the few

companies of its generation that made the

idea work.


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Outsourcing risks - activity


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Outsourcing - Hagels view

Companies try to excel at three different typesof activity:

managing customer relationships,

routine processing of information anddevelopment of new products.

He believes that companies will in future tend

to concentrate on just one, while buying in theothers as required.

Examples?


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Oticon


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Transition curve indicating thereaction of staff through time from

when change is first suggested

Figure 10.7 Transition curve indicating the reaction of staff through time fromwhen change is first suggested

Source: Bocij et al. (2003)


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Key staff in systems acceptance

System sponsors

System owners

System users

Stakeholders

Legitimizer

Opinion leaders


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The role of organisational culture

Survival (outward-looking, flexible) the external environmentplays a significant role (an open system) in governing companystrategy. The company will likely be driven by customerdemands and will be an innovator. It may have a relatively flatstructure.

Productivity (outward-looking, ordered) interfaces with theexternal environment are well structured and the company istypically sales-driven and is likely to have a hierarchicalstructure.

Human relations (inward-looking, flexible) this is theorganization as family, with interpersonal relations moreimportant than reporting channels, a flatter structure and staffdevelopment and empowerment is thought of as important bymanagers.

Stability (inward-looking, ordered) the environment isessentially ignored with managers concentrating on internalefficiency and again managed through a hierarchical structure.


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Knowledge Management Saunders (2000)

Every day, knowledge essential to your

business walks out of your door, and much of

it never comes back. Employees leave,

customers come and go and their knowledgeleaves with them. This information drain costs

you time, money and customers.


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IDC objectives of KM

Improving profit/growing revenue (67 per cent)

Retaining key talent/expertise (54 per cent)

Increasing customer retention and/or satisfaction (52per cent)

Defending market share against new entrants (44 percent)

Gaining faster time to market with products (39 percent)

Penetrating new market segments (39 per cent) Reducing costs (38 per cent)

Developing new products/services (35 per cent)


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Differences between knowledge management, dataprocessing and information management

Consider a retail manager analysing their sales figures.

Raw data on sales figures consist of figures in eachindividual store for a given month. IS can present thisdata within the context of sales compared to previous

months as information. This information is of little value if the manager does not

know how to act in response to it. Managers apply theirknowledge to decide how to respond if the sales in one

region are much lower than others, or if one store isunderperforming against budget.

Thus knowledge is the processing of information and isa skill based on previous understanding, proceduresand experience.


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Explicit and tacit knowledge

Knowledge Management - Techniques and tools forcapturing and disseminating knowledge within anorganization.

Explicit details of processes and procedures.Explicit knowledge can be readily detailed in

procedural manuals and databases. Examples includerecords of meetings between sales representativesand key customers, procedures for dealing withcustomer service queries and management reportingprocesses.

Tacit less tangible than explicit knowledge, this isexperience on how to react to a situation when manydifferent variables are involved. It is more difficult toencapsulate this knowledge, which often resides in

the heads of employees.


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Binney classes of KM applications

1. Transactional. Help desk and customer serviceapplications.

2.Analytical. Data warehousing and data mining forCRM applications.

3.Asset management. Document and contentmanagement.

4. Process support. TQM, benchmarketing, BPR, SixSigma.

5. Developmental. Enhancing staff skills, competencies training and e-learning.

6. Innovation and creation. Communities, collaborationand virtual teamwork.


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2 perspectives on KM

It is impossible to achieve full benefits fromknowledge management unless individualsare willing and motivated to share their

knowledge or unless organizations lose theirstructural rigidity to permit information andknowledge flow - IDC 2000

Knowledge can only be volunteered itcannot be conscripted Snowden 2002


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Chevron example connections in $2 billion saving

1. Connection to the explicit knowledge via an intranetwith a portal with search tools and a directory ofinformation.

2. Connection of people to people with specialized

knowledge through an expertise locator; a type ofphone directory with people in different expertisecategories, again also accessed via search tools.

3. Connection to communities of practice which can

help sharing and learning between people.4. Connection of knowledge and people with processes,

products and services.


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Risk Management

1. Identify risks including their probabilities and

impacts.

2. Identify possible solutions to these risks.

3. Implement the solutions, targeting the

highest impact, most likely risks.

4. Monitor the risks to learn for future risk

assessment.


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OpenText Livelink(www.opentext.com)
http://www.opentext.com/http://www.opentext.com/


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Activity identify risks for e-business project

Risk Probability Impact SolutionInsufficient senior management

commitment 5 7 Education/training/lobbying by e-business manager toachieve buy-inHigh staff turnover/key staff

leave 6 5 Use monetary incentives and improve workingenvironmentProject milestones not met,

overrun budget 8 6 Appoint experienced project manager and providesupport and resources needed. Manager will performrisk management such as this

Problems with new technology

delaying implementation (bugs,

speed, compatibility)8 8 Allow sufficient time for volume, performance testing

Staff resistance to change 4 4 Education, training identification of change facilitatorsamongst staff

Problem with integrating with

partners systems (e.g.

customers or suppliers)6 8 Tackle these issues early on, identify one contact

point/manager for each of partnershipsNew system fails after

changeover (too slow or too

many crashes)9 See solution to delayed implementation


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Barriers to KM IDC survey

Lack of understanding of KM and its benefits (55 percent)

Lack of employee time for KM (45 per cent)

Lack of skill in KM techniques (40 per cent)

Lack of encouragement in the current culture forsharing (35 per cent)

Lack of incentives/rewards to share (30 per cent)

Lack of funding for KM initiatives (24 per cent)

Lack of appropriate technology (18 per cent) Lack of commitment from senior management (15

per cent)

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Change Management.ppt

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