CHANGE MANAGEMENT
SUMMARY OF CHAPTER 10
BY DR. SAWYERR PROJECT GROUP, MIT 2, 2012 LECTURER: DR. ADEWOLE
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1 2 3 4 5 Kayode Sanni-Olodo Akinleye olumide Ebegbetale Victoria Ogundare Olusayo Adesegha Cosmas
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109074061 109074208 010407011 109074098 109074075
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Ore Isaac Adebayo
Williams Olubukola Edeyoe.O.Helen Okwuoha Nwabueze Oluwatope Adegbulugbe Okon Solomon Kayowa Ogunrinde Nwachwukwu Kelechi Ojo oladipo alagbon
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TABLEOFCONTENTS
Introduction The challenges of e-business transformation Different types of change in business Planning change Human Resource Requirements 3 4 8 10 12 Revising organizational structures Approaches to managing change Focus on knowledge management Risk Management Key Points 17 19 26 31 32
INTRODUCTION
What Is Change Management?
Change management is defined as the approaches to managing changes to organizational processes and structures and their impact on organization staff and culture. This chapter emphasized on approaches to managing change associated with e-business.
Objectives
Identifying the different types of change that need to be managed for e-commence Develop an outline plan for implementing e-commence change Describe alternative approaches to organizational structure resulting from organizational change
THE CHALLENGES OF E-BUSINESS TRANSFORMATION
Figure 2.0 shows the key factors in achieving change. The main change levers required are: Market and business model Business process Organizational structure, culture and staff responsibilities Technology infrastructure changes
a) b) c) d)
THE CHALLENGES OF E-BUSINESS TRANSFORMATION MODEL
Fig. 2.0
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THE CHALLENGES OF E-BUSINESS TRANSFORMATION
To achieve these change, a series of success factors are required. These success factors are: Leadership commitment effective project management Employee acquisition and retention Employee ownership
THE CHALLENGES OF SELF-SIDE E-COMMERCE IMPLEMENTATION
The seven (7) strategic useful framework for reviewing an organizations capabilities to manage e-business-related change are: Strategy: The contribution of e-business in influencing and supporting organizations strategy; Structure: The modification of organizational structure to support e-businesses; System: The development of specific processes, procedures or information systems to support Internet marketing; Staff: The breakdown of staff in terms of their background, age and sex and characteristics such as IT vs. marketing, use of contractors/consultants; Style: Includes both the way in which key managers behave in achieving the organizations goals and the cultural style of the organization as a whole; Skill: Distinctive capabilities of key staff, but can be interpreted as specific skill sets of team members; Superordinate: The guiding concepts of the e-commerce organization which are also part of shared values and culture. The internal and external perception of these goals may vary.
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DIFFERENT TYPES OF CHANGE IN BUSINESS
Change takes two forms: Incremental change and Discontinuous change. Incremental change: involves relatively small adjustments required by changes in the business environment. Discontinuous or transformational change involves a major change in the business environment which changes the basis for competition. The introduction of e-business requires organizations to manage both types of change. Other forms of change are: Anticipatory change: occurs when an organization makes proactive changes in order to improve its efficiency or to create an advantage within the competitive environment. Reactive change: is a direct response to a change in the external environment.
FORMS OF ORGANIZATIONAL CHANGE
The four different forms of organizational change identified by Nadler et al. (1995) are: 1 Tuning: This is an incremental form of change when there is no immediate need f or change. 2 Adaptation: Also an incremental form of change, but in this case it is in response to an external threat or opportunity. 3 Re-orientation: A significant change or transformation to the organization is identified as a priority in the short-to-medium term. There is not an immediate need for change, but a significant change is anticipation of change. 4 Re-creation: In re-creation, the senior management team of an organization decides that a fundamental change to the way it operates is required to compete effectively.
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PLANNING CHANGE
Web projects require a project management approach that helps with: Evolving requirements; Putting focus on the end-customer; Collaboration between different skill sets; Managing stakeholder expectations. Managing projects should satisfy the business requirement: To set priorities and to deliver on time and within budget and be enabled by: The organization identifying and prioritizing projects in line with the operational plan and the adoption and application of sound project management techniques for each project undertaken and takes into consideration:
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PLANNING CHANGE
Business management sponsorship for projects Program management Project management capabilities User involvement Task breakdown, milestone definition and phase approvals Allocation of responsibilities Rigorous tracking of milestone and deliverables Cost of manpower budgets, balancing internal and external resources Quality assurance plans and methods Program and project risk and assessments Transition from development to operations
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HUMAN RESOURCE REQUIREMENTS
E-business implementation requires specialist skills that may not be present within an organization. E-business project managers have a choice of building a new skills set within their organization or outsourcing and partnering with other organizations Staff Retention The five intrinsic characteristics of a job that improve staff motivation and so help staff retention are: Skill variety Task identity, how well the work is defined relative to other tasks and whether an employee sees a job through from start to finish. Task significance or the importance of the work. Autonomy or freedom in completing work. Feedback from employer.
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HUMAN RESOURCE REQUIREMENTS
To enhance these psychological characteristics the following approaches can be used: Task combination by combining tasks employees see more of the whole task. Natural workgroups this also helps in task combination through creating a team to complete task. Establish customer relations this helps in task significance. Vertical loading employees take responsibility for tasks completed by supervisors. Opening feedback channel from internal or external customers, via managers where necessary.
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HUMAN RESOURCE REQUIREMENTS
Another approach is to share the skills between staff, so that if key staff leave, then not all their knowledge will leave with them. Certain types of collaboration can assist with staff sharing knowledge and experience: Co-locating staff including marketing staff in the digital team or ecommerce staff in the marketing team was mentioned. Job-swapping a slightly different approach, which also involves colocation, was noted as effective. Combined planning sessions rather than the digital team developing a plan and then discussing with the marketing team who may then incorporate it into their plan, a more collaborative approach is used with both working on creating an integrated plan.
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HUMAN RESOURCE REQUIREMENTS
Interim collaborative teams (SWAT teams) a temporary multidisciplinary team (for example, teams from e-commerce, marketing and technology) is formed to drive a particular initiative or performance improvement, e.g. home page improvement, web analytics or supporting customer journeys between channels. Creation of a central Centre of Excellence for Digital Marketing can provide a clear resource which marketing staff can turn to for advice and best-practice documentation. Members of this team can also be involved in proactively spreading the word through involvement in training or operational campaign planning.
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OUTSOURCING
Many companies turn to third parties to assist with their e-business implementation. Two outsourcing patterns are evident: 1. Outside-in: The company starts an e-business initiative by outsourcing some activities where there is insufficient in-house expertise. These may be areas such as strategy or online promotion. The company then builds up skills internally to manage these areas as e-business becomes an important contributor to the business. 2. Inside-out: The company starts to implement e-business using existing resources within the IT department and marketing department in conjunction with recruitment of new media staff. They may then find that there are problems in developing a site that meets customers needs or in building traffic to the site. At this point they may turn to outsourcing to solve the problems.
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REVISING ORGANIZATIONAL STRUCTURES
When a company first embarks on e-business, perhaps through creating a new web site to promote its products, it will normally operate within the existing company structure, perhaps using outsourcing to make good a resource deficit. However, as the contribution of the website to the company increases, the work involved increases and more staff from different parts of the organization are involved in e-business, it may be necessary to adopt new organizational structures and working practices. Four major stages in the growth of the digital marketing organization are recognized: 1. Ad hoc activity: At this stage there is no formal organization related to ecommerce and the skills are dispersed around the organization. At this stage it is likely that there is poor integration between online and offline marketing communications. The web site may not reflect the offline brand, and the web site services may not be featured in the offline marketing communications. A further problem with ad hoc activity is that the maintenance of the web site will be informal and errors may occur as information becomes out of date.
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REVISING ORGANIZATIONAL STRUCTURES
2 Focusing the effort: At this stage, efforts are made to introduce a controlling mechanism for Internet marketing. At this stage the efforts to control the site will be experimental with different approaches being tried to build, promote and manage the site.
3 Formalization: At this stage the, Internet marketing will have reached a critical mass and there will be a defined group or separate business unit within the company which manages all digital marketing. 4 Institutionalizing capability: This stage also involves a formal grouping within the organization, but is distinguished from the previous stage in that there are formal links created between digital marketing and a companys core activities.
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APPROACHES TO MANAGING CHANGE
Change management is conducted by change agents who are the managers responsible for controlling change. In the context of e-business, the change agent could be the project manager responsible for implementing a new information system, an e-business manager responsible for increasing adoption of e-business by an organization, or specialist digital marketing or supply chain managers seeking to increase adoption of e-channels.
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SENIOR MANAGEMENT INVOLVEMENT
The role of leadership style in e-commence implementations include: Collaborative widespread participation of employees occurs to define the techniques to achieve them. Consultative management takes the final decision, after calling on some employees for input. Directive the management team takes the decisions, with the employees generally trusting them to do so and being generally informed. Coercive the management team takes the decision with very limited recourse to employees. Of these approaches, the consultative approach was most common, but other statements used in the research suggested that there were elements of other approaches.
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MODELS FOR ACHIEVING CHANGE
A classic model for achieving organizational change involves three stages: Unfreeze the present position by creating a climate of change by education, training and motivation of future participants. Quickly move from the present position by developing and implementing the new system. Refreeze by making the system an accepted part of the way the organization works.
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MODELS FOR ACHIEVING CHANGE
To achieve the unfreeze stages different staff can be identified for different roles by the project manager: System sponsors are senior managers or board members who have bought into the e-business initiative, are committed to major change and want to achieve success. The sponsors will try to fire up staff with their enthusiasm and stress why introducing the system is important to the business and its workers. System owners are managers in the organization of key processes such as a procurement manager or marketing manager who will use the ebusiness system to achieve benefits in their area. System users. These are staff in the different areas of the business who are actively involved in making the process happen. They could be a buyer in procurement or a brand manager within the marketing department.
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MODELS FOR ACHIEVING CHANGE
Special types of system users can be identified, and it is important for the change manager to try to influence these staff to help achieve commitment among other staff. The three main types of system users that should be influenced are as follows: Stakeholders should be identified for each of the process areas where change will be introduced. These will be staff who are respected by their co-workers and will again act as a source of enthusiasm for the system. The user representatives used in specification, testing and sign-off are key stakeholders.
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MODELS FOR ACHIEVING CHANGE
The legitimizer protects the norms and values of the system; they are experienced in their job and regarded as the experts by fellow workers; they may initially be resistant to change and therefore need to be involved early. Opinion leaders are people whom others watch to see whether they accept new ideas and changes. They usually have little formal power, but are regarded as good ideas people who are receptive to change and again need to be involved early in the project.
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ORGANIZATION CULTURE
Social relationships in an organization that are part of its culture are important. The efficiency of any organization is dependent on the complex formal and informal relationships that exist within it. Formal relationships include the hierarchical work relationships within and between functional business areas. Informal relationships are created through people working and socializing with each other on a regular basis and will cut across functional boundaries. E-business-led change has the capacity to alter both types of relationships as it brings about change within and between functional business areas. This concept includes shared value, unwritten rules and assumptions within the organization as well as the practices that all groups share. Corporate cultures are created when a group of employees interact over time and are relatively successful in what they undertake.
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FOCUS ON KNOWLEDGE MANAGEMENT
Knowledge management has an important role within e-business since business success is critically dependent on staff knowledge about all aspects of the micro-environment such as customers, suppliers, intermediaries, competitors and how to shape internal processes to best deliver customer service. What is knowledge? Knowledge is the combination of data and information, to which is added expert opinion, skills and experience, to result in a valuable asset which can be used to aid decision making. Knowledge may be explicit and/or tacit, individual and/or collective.
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FOCUS ON KNOWLEDGE MANAGEMENT
The main activities of knowledge management include: 1. Identify knowledge: This is an analysis of the availability of existing knowledge to support the activities forming existing processes and a gap analysis showing what is missing. 2. Create new knowledge: This reviews methods to create new knowledge. At the personal and team levels, recommended techniques are through training, process problem improvement sessions or brainstorming. At the departmental or organizational levels, knowledge creation can occur through benchmarking against other organizations and through establishing expert groups known as communities of practice or use of consultants or other companies to acquire new knowledge. 3 Store knowledge: Knowledge can also be embedded or become part of the organizational memory through revising processes that form team routines. Storing explicit knowledge requires a structured approach to selecting, updating, organizing or categorizing knowledge within information systems. 4 Share knowledge: This increases knowledge availability to ensure it is available in the right context i.e. for the right person, at the right time to support their current activity.
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OBJECTIVES OF KNOWLEDGE MANAGEMENT
Improving profit/growing revenue Retaining key talent/expertise Increasing customer retention and/or satisfaction Defending market share against new Gaining faster time to market with products Penetrating new market segments Reducing costs Developing new products/services
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IMPLEMENTING KNOWLEDGE MANAGEMENT
The reasons for difficulties in moving to knowledge management are: Lack of understanding of KM and its benefits Lack of employee time for KM Lack of skill in KM techniques Lack of encouragement in the current culture for sharing Lack of incentives/rewards to share Lack of funding for KM initiatives Lack of appropriate technology Lack of commitment from senior management
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TECHNOLOGIES FOR IMPLEMENTING KNOWLEDGE MANAGEMENT
Hansen et al. (1999) identify two contrasting approaches for implementing knowledge management which they illustrate through case studies of management consultancies. They refer to these approaches as codification and personalization. Codification: In this approach, knowledge is codified or translated into a form suitable for searching using a database. Codification in this respect means that the organisations knowledge management relies primarily on repositories of explicated information. Personalization: relies on person-to-person contact to allow for sharing experiences and knowledge directly between the organisation's members. This strategy facilitates a controlled approach to information retrieval by letting the employees collectively arrive at deeper insights by going back and forth on problems they need to solve.
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RISK MANAGEMENT
Risk management is intended to identify potential risks in a range of situations and then take actions to minimize the risks. Risk management involves these stages: Identify risks, including their probabilities and impacts. Identify possible solutions to these risks. Implement the solutions targeting the highest-impact, most-likely risks. Monitor the risks to learn for future risk assessment.
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KEY POINTS
1. Change as a result of e-business needs to be managed on two levels. First, the change that needs to be managed as part of projects to introduce ebusiness. Second, organization-wide change is required for e-business. 2. Sound project management is required to achieve change. Traditional project management activities such as estimation, resource allocation, scheduling, planning and monitoring are all important here. A project manager also needs to facilitate change by communicating the need for change. 3. Traditional lifecycle stages analysis, design and build can be used to estimate the tasks required for an e-business implementation. Since most e-business solutions will be based on tailoring off-the-shelf packages, there will be a change in balance between the analysis, design, build and implementation phases in comparison with a bespoke solution. Prototyping is essential to achieve the fast timescales required by ebusiness.
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KEY POINTS
4. Building a team for e-business will require technical, marketing and project management skills. This will be difficult in the face of a competitive marketplace for these skills and high staff turnover. Tactics should be developed to help retain staff in this environment. 5. To implement e-business, a company will need to partner with a variety of companies. The e-business manager will need to decide whether to outsource activities such as strategy, content development and site promotion at the outset of an e-business project and whether it may be necessary to bring these activities back in-house at a later stage.
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KEY POINTS
6. Changes to organizational structures are likely to be required to build the e-business. Coordination of e-business-related activities can be achieved through a working party, e-business manager or separate department. Companies may also spin off sell-side e-commerce to a completely separate business. 7. Managing staff responses to change is an important aspect of change. Managers will need to consider how to achieve commitment and action from senior managers and also how to gain staff acceptance of the new system and new working practices. Techniques that may be used are user education, user involvement and achieving support from respected staff. Companies with an outward-looking cultural orientation will be predisposed to e-business-led change while others that have an inward facing, inflexible cultural orientation may have to consider changes in culture.
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