Description
types of process change implementations, what are the process change project risks, what are barriers to BPR implementations. It explains change management with the help of case of Mobil Oil Australi
Business Process Change Management
Process Change Project Types
• Intra-functional Projects are aimed at single and isolated tasks, activities or single function. • Inter-functional Projects target cross-functional business processes, but are contained within a business unit. • Inter-organisational Projects bridge between two or more business units. • Process Improvement Cost effectiveness • Achieving Best-in-Class Competitive parity • Break-Point Rewriting the rules of business.
Business Process Change Management
2
Process Change Project Examples
Project Type Intrafunctional
Process Improvement
Eliminate costly paper work by introducing an e-mail system to internal communication. A bank creates a simplified, one-page form for loan applications for customers seeking small loans. Link up with one particular vendor for cost saving purposes in product design and parts delivery.
Achieving Best-in-Class
Redesign the sourcing process to ensure that the lowest cost suppliers are being selected.
Break-point
Use a digital voice recording system to streamline acquisition process, and to improve communications. A bank dissolves all existing branches and introduces a direct banking system on the Internet. A company externalises all employees, except a core staff of 30. Former employees form a network of its suppliers.
Interfunctional
Introduce self-directed work teams to the order management process in a manufacturing company.
Interorganisational
Redesign the delivery process between a machine manufacturer and all its European suppliers (JIT).
Business Process Change Management
3
Types of Process Change Implementations
• Technology centric: BPR is largely regarded as a technological task. • User acceptance centric: assumes that the BPR implementation obtains the desired effect only when accepted by the users. • Organisation centric: assumes that BPR enables options for modifying the organisational framework of the enterprise. Addresses issues involving the process, organisational structure and the users.
Business Process Change Management
4
Process Change Project Risks
• The success of BPR projects is largely dependent on the knowledgeable management of BPR project risk factors. • Types of risks Financial risks: Project does not yield the high Return-on-Investment expected. Technical risks: Process-oriented IT solution either not available or not working. General project risks: Organisation is looking for solutions outside its competence or the project team is not performing. Functional risks: Organisation is confronted with a reorganisation plan, which is not applicable to the kind of business the company is in. Political risks: People confront the project (resistence), or the project gradually loses commitment by upper management.
Business Process Change Management 5
Assessing the Business Process Change Risks
• • • • •
Key questions for assessing an organisation?s readiness for a BPR project: Are the related processes likely to remain stable in the near future? Will executives provide strong leadership? Is the organisation likely to be stable? Does the organisational culture promote change? Are employees dissatisfied with the process to be reengineered?
Business Process Change Management 6
Nature of Change in BPR
• Work units change -- from functional departments to process teams. • Jobs change -- from simple tasks to multi-dimensional work. • People’s roles change -- from controlled to empowered. • Job preparation changes -- from training to education. • Focus of performance measures and compensation shifts -- from activity to results. • Advancement criteria change -- from performance to ability. • Values change -- from protective to productive. • Organisational structures change -- from hierarchical to flat. • Executives change -- from storekeepers to leaders.
Business Process Change Management 7
BPR Implementation Barriers
• Barriers are severe, unexpected and not planned for problems in BPR projects. • Barriers increase the impact of project risk factors. • Barriers hinder implementation efforts such that without intervention the project falters or may even fail altogether. • Barriers have to be eliminated, because they take away much needed energy from the project team and the people affected. • The energy for and against the barrier is not injected into the project steps and thus is lost to the project?s outcome.
Business Process Change Management 8
Change Management
“The greatest opportunities are created out of crisis. Crisis forces people to change, and change often brings new opportunities.” - Chinese proverb
Business Process Change Management
10
Case: Change Management at Mobil Oil Australia
Project Phoenix at MOA
• Purpose:
– Process review to improve financial performance, such as ROCE (return on capital employed).
• Terms of Reference for Process Review:
– A company-wide, zero-based, cross-functional study, resourced modestly (to start) with a clear time horizon, responsive to other major changes impacting the organisation and targeted to the expectation of performance in the medium term.
Business Process Change Management 12
Process Transformation Objectives
• Financial
– A net improvement of 3+ percent in ROCE with the aim to become the low cost producer in the industry.
• Behaviour
– Customer focused, internally as well as externally, and profit driven.
• Cultural
– A team oriented, motivated, and committed workforce.
Business Process Change Management
13
Project Management
• • • • • • Initiation Diagnosis Process reengineering Organisation design Implementation Post-implementation review
Business Process Change Management
14
Project Structure
• Executive leadership
– Senior executive from MOA
• Venture team
– Four senior executives from marketing, logistics, manufacturing and administration
• Natural Work Team (NWT)
– Cross-functional employee teams to redesign and simplify process activities and workflow (with support from consultants)
Business Process Change Management 15
Issues to be addressed by NWT
• • • • • Business planning and optimisation Management information Sales force effectiveness Customer service improvement Alignment of marketing staff support and services (general administration) • Engineering, technical, environmental and occupational health and safety support services • Conservation of expenditure • Logistics/operations effectiveness
Business Process Change Management 16
Process Reengineering
• Week 1: team training and activity planning. • Week 2: interviews and data collection. • Week 3 and 4: issues confirmation and documenting the AS-IS case. • Week 5 and 6: data analysis, including benchmarking and the design of alternatives (TO-BE case). • Week 7: alternatives tested with the organisation. • Week 8: recommendations finalised and presented. • Week 9: implementation steps developed and documented.
Business Process Change Management 17
Major issues emerging from NWT process
• • • • • • • • • Lack of profit and customer focus throughout the organisation. Poor communication to employees of the profit position. Many functional barriers to an integrated operation (silo effect). Very complex and unresponsive set of processes that did not meet the customer/ organisation needs. Ineffective management information characterised by excessive reporting. Ineffective strategic planning and optimising. Ineffective product forecasting. Poor management of expenditure (inadequate ownership and control). Unresponsive/inadequate customer service.
Business Process Change Management 18
Changes in Organisation Design
• From functional to business units with profit and ROCE objectives. • Reduction in management layers by an average of two levels.
Business Process Change Management
19
Impact of Changes
• Increase in income after tax by more than six times. • Increase in ROCE from 2% to 7%. • Expense savings of $27.5 million in the first year. • 20% of non-represented workforce removed.
Business Process Change Management
20
Managing People Change
Why People Resist Change ?
People resist change when: • they are comfortable with the status quo; • they do not understand why the change is desirable; • they have doubts about the organisation?s ability to achieve the desired change; • they fear that the new process may de-skill them.
Business Process Change Management
22
Attitude of Participants in a Change Process
+
Idealism Frustration Commitment Decision Awareness
Attitude
Anger
_
Resignation
Time
Business Process Change Management 23
Transition Process in Change
Ending state
Neutral state
(transition)
Emerging state
(beginning)
Business Process Change Management
24
Socio-humanological Issues
• • • • • Info-phobia Hacking Power-shift Collaboration Technology trust (past experience!)
Business Process Change Management
25
Concern-Based Adoption Model (CBAM)
Principles: • Change is a process, not an event, and it takes time to institute change. • Individuals must be the focus if change is to be facilitated. Institution?s will not change until their members change. • The change process is an extremely personal experience. How the individual perceives it will strongly influence the outcome. • Individuals progress through various stages regarding the emotions and capabilities relating to the innovation. • People responsible for the change process must work in an adaptive and systematic way where progress need to be monitored constantly.
Business Process Change Management 26
Stage 6: Refocus/ Refine
• “How can we implement improvements?”
Stage 5: Collaboration
• “How can I help others with the change?”
Stage 4: Consequences
• “What are the benefits on the business?” • “What will the overall impact of the change be?”
Stage 3: Management
• “How will this change be conducted?”
Stage 2: Personal
• “How will the change affect me and my job?” • “How will I be evaluated?”
Stage 1: Information
• “How does it work?”
Stage 0: Awareness
• “What is it?”
Business Process Change Management 27
Best Practices in Process Change Management
• Recognise and articulate an “extremely compelling” need to change. • Start with and maintain executive-level support. • Understand the organisation?s “readiness to change”. • Communicate effectively to create buy-in; then communicate more.
Business Process Change Management
28
Trade Union Concerns
• Job losses resulting from increased efficiency. • Significant and substantive change in the organisational structure, affecting „union-management relations?. • Fear that workers may be asked to undertake more work with a higher level of responsibility (due to empowerment) with no adjustment in pay. • Significant changes in the rewards and recognition system which will reduce equity across departments as well as increase number of equity issues within the departments.
Business Process Change Management
29
Management?s Response to Unions for BPR
• Systematically work to understand union?s concern. • Encourage union to work out their own position on BPR on the basis of fullest information about actual intentions of management. • Develop understanding of conditions under which the union will work with management. • Involve the union formally in any BPR team.
Business Process Change Management
30
Strategies for Implementing Change
• Present a non-threatening image. • Cast arguments for change proposals in terms of the benefits that will accrue to the programme. • Diffuse opposition through an open discussion of ideas. Deal with conflicts by engaging the opposition in legitimate discussion, answering objections, and allaying fears and facts. • Build alliances with operating or line managers who are directly affected by the change. • Bargain and make trade-offs. Resistors may reduce their resistance if they are assured that other changes, which they favour, will be forthcoming. • Begin as an experiment. When something is viewed as temporary, it is less threatening. • Start small and slowly expand the change project.
Business Process Change Management 31
Managing Change:
Few Things to Ponder When Planning for BPR/ERP
• • • • •
Which processes are most important now and why? Does this system meet our needs or go beyond them? Who will be the change champion(s)? Who are the stakeholders? What is the business culture at our company and what are its strengths? • What subcultures do we have and what are their strengths? • How can we apply those strengths to business change?
Business Process Change Management
32
Managing Change:
Few Things to Ponder When Planning for BPR/ERP (contd.)
• What cultural attributes are weak or will interfere with the change? • What will be the toughest changes, and how will we address them? • Who will be responsible for change management?
Business Process Change Management
33
Planning Change Management
• BPR project should explicitly recognise that there will be resistance to the changes that the project introduces and that the change must be managed if the project is to be successful • The most powerful tool that management and the BPR team have in managing change is communication.
Business Process Change Management
34
Change Management Plan Contents
• Stakeholders and their interests: Whom will the project affect? How? • Communication plan • Assessment plan • Intervention plan
Business Process Change Management
35
Communication Plan
• • • • What information people will need? When this information will be available? How to get this information to the people that need it? Feedback mechanism that will let the BPR team know that the information has been received and understood and that will let the recipients submit questions, comments, and suggestions.
Business Process Change Management
36
Contents of Initial Communication
1. 2. 3. 4. 5. 6. 7. Why the BPR project is needed? What is its scope? What results management expects? Who was selected to be on the BPR team and when? What will happen during the project and to whom? What involvement people will have in the project? What can be told now about how BPR will affect all involved? 8. When the rest of the story can be told? }Sp }on }so }r }B }P }R }te }am
Business Process Change Management
37
Change Assessment Tools
• • • • • • Confidential employee survey Focus groups Informal conversations Bulletin boards Attendance trends Monitoring of suggestions, comments, and questions • Interviews
Business Process Change Management 38
Intervention Tools
• • • • • • Coaching Incentives Negotiation Discipline Individual or group counseling Training and education
Business Process Change Management
39
Tips for Managing BPR/ERP?s Cultural Issues
• View ERP implementation as a business initiative, not an IT initiative. Educate and engage senior management as early as possible. • Do not let technical problems dominate the project’s time. Create a dedicated staff position for change management. Use your best and brightest people on the change team. • Articulate expectations before implementation. What will the project?s stakeholders say are the attributes of the new environment in a year? Where are the gaps in the plan? What conflicts of opinion exist today?
Business Process Change Management
40
Tips for Managing BPR/ERP?s Cultural Issues (contd.)
• Avoid political infighting between previously isolated divisions. Managers from the various business units must have a clear understanding of the reasons behind the change. What?s in it for them? Write a change management document that includes the communication strategy and core business principles of the company. • Encourage users to change their job roles. If employees are already overworked, eliminate any nonessential tasks the system may require. Develop incentive programmes to motivate change and incorporate them into performance reviews.
Business Process Change Management
41
Tips for Managing BPR/ERP?s Cultural Issues(contd.)
• Don’t change too much at once. Major change requires an evolutionary approach. Don?t overwhelm your organisation with a system that has more functionality than you absolutely need. Consider a phased rollout and target for short wins to generate momentum during the project.
Business Process Change Management
42
PPT Approach to BPR Change Management
People
Process
Technology
Business Process Change Management
43
PPT Approach
1. People Change
– – – – – – – – –
(Sub-processes)
Process view of business Sub-process identification, mapping and measurement Sub-process team set-up Building process ownership
2. People Change
(Cross-functional processes)
Cross-functional view of process Identifying cross-functional interfaces and extending process teams Defining process outcomes and effectiveness goals Identifying problems/ issues in the existing process Defining process benchmarks and applying it
Business Process Change Management 44
PPT Approach (contd.)
3. People Change
– – – – – – – –
(Team-building)
Institutionalising process management Process management; tool selection and process benchmarking Developing process performance MIS Building process quality rewards
4. Process Change
(Change definition)
Process performance benchmark gap analysis Setting up process vision and performance goals Defining process improvement/ redesign opportunities Defining change management team
Business Process Change Management 45
PPT Approach (contd.)
5. Process Design Change
– – – –
(Redesign definition)
Social system design Technology system design Technology gap analysis Business case analysis for change implementation
6. Technology Change Plan (Redesign implementation)
– Technology evaluation and selection – Planning and monitoring change implementation – Post-implementation measurement
Business Process Change Management
46
Pitfalls to Avoid in BPR
• Do not undertake BPR without reference to the strategic goals and objectives. • Do not underestimate the change required to achieve a process orientation. • Organisations must be „ready? for BPR. Could be due to a history of TQM, a crisis situation, or a new visionary leader. • Do not expect too much from BPR too soon. • Do not be wary of the BPR title -- it is the successful „organisational change? that matters! • Do not delegate BPR efforts to IT department. • Always pilot the new process.
Business Process Change Management 47
Vulnerability of BPR Projects
High Vulnerability
• Radical change target • Unrealistic expectations • Top management „out of touch? with reality; a „yes? culture • Fast pace, highly visible results • Diverse motives and understanding • Significant resources required • Little knowledge of how to proceed
Low Vulnerability
• Incremental improvement target • Realistic expectations • Top management „in touch? and supportive • Slow pace, results not immediately apparent • Common vision and understanding • Few extra resources needed • Clear method
48
Business Process Change Management
Vulnerability of BPR Projects (contd.)
• • • • •
High Vulnerability Complex interdependencies Dependent on others Large scale, wide scope Dynamic environment Confused responsibilities of process and outcomes
• • • • •
Low Vulnerability Few interdependencies Self-contained Small scale, narrow scope Stable environment Clear ownership of process and outcomes
Business Process Change Management
49
Why BPR Projects Fail?
• • • • • • • • • Fatal mistake 1. Fatal mistake 2. Fatal mistake 3. Fatal mistake 4. Fatal mistake 5. Fatal mistake 6. Fatal mistake 7. Fatal mistake 8. Fatal mistake 9. Unclear definitions Unrealistic expectations. Inadequate resources. Taking too long. Lack of sponsorship. Wrong scope. Techno-centricism. Mysticism. Lack of an effective methodology.
Business Process Change Management 50
BPR?s Nine Commandments
1. 2. 3. 4. 5. 6. 7. 8. 9. Be clear. Be realistic. Be prepared. Hurry up. Have a champion. Focus. Technology yes, but people first. Don?t get snowed. Follow a methodology.
Business Process Change Management 51
doc_200395411.pptx
types of process change implementations, what are the process change project risks, what are barriers to BPR implementations. It explains change management with the help of case of Mobil Oil Australi
Business Process Change Management
Process Change Project Types
• Intra-functional Projects are aimed at single and isolated tasks, activities or single function. • Inter-functional Projects target cross-functional business processes, but are contained within a business unit. • Inter-organisational Projects bridge between two or more business units. • Process Improvement Cost effectiveness • Achieving Best-in-Class Competitive parity • Break-Point Rewriting the rules of business.
Business Process Change Management
2
Process Change Project Examples
Project Type Intrafunctional
Process Improvement
Eliminate costly paper work by introducing an e-mail system to internal communication. A bank creates a simplified, one-page form for loan applications for customers seeking small loans. Link up with one particular vendor for cost saving purposes in product design and parts delivery.
Achieving Best-in-Class
Redesign the sourcing process to ensure that the lowest cost suppliers are being selected.
Break-point
Use a digital voice recording system to streamline acquisition process, and to improve communications. A bank dissolves all existing branches and introduces a direct banking system on the Internet. A company externalises all employees, except a core staff of 30. Former employees form a network of its suppliers.
Interfunctional
Introduce self-directed work teams to the order management process in a manufacturing company.
Interorganisational
Redesign the delivery process between a machine manufacturer and all its European suppliers (JIT).
Business Process Change Management
3
Types of Process Change Implementations
• Technology centric: BPR is largely regarded as a technological task. • User acceptance centric: assumes that the BPR implementation obtains the desired effect only when accepted by the users. • Organisation centric: assumes that BPR enables options for modifying the organisational framework of the enterprise. Addresses issues involving the process, organisational structure and the users.
Business Process Change Management
4
Process Change Project Risks
• The success of BPR projects is largely dependent on the knowledgeable management of BPR project risk factors. • Types of risks Financial risks: Project does not yield the high Return-on-Investment expected. Technical risks: Process-oriented IT solution either not available or not working. General project risks: Organisation is looking for solutions outside its competence or the project team is not performing. Functional risks: Organisation is confronted with a reorganisation plan, which is not applicable to the kind of business the company is in. Political risks: People confront the project (resistence), or the project gradually loses commitment by upper management.
Business Process Change Management 5
Assessing the Business Process Change Risks
• • • • •
Key questions for assessing an organisation?s readiness for a BPR project: Are the related processes likely to remain stable in the near future? Will executives provide strong leadership? Is the organisation likely to be stable? Does the organisational culture promote change? Are employees dissatisfied with the process to be reengineered?
Business Process Change Management 6
Nature of Change in BPR
• Work units change -- from functional departments to process teams. • Jobs change -- from simple tasks to multi-dimensional work. • People’s roles change -- from controlled to empowered. • Job preparation changes -- from training to education. • Focus of performance measures and compensation shifts -- from activity to results. • Advancement criteria change -- from performance to ability. • Values change -- from protective to productive. • Organisational structures change -- from hierarchical to flat. • Executives change -- from storekeepers to leaders.
Business Process Change Management 7
BPR Implementation Barriers
• Barriers are severe, unexpected and not planned for problems in BPR projects. • Barriers increase the impact of project risk factors. • Barriers hinder implementation efforts such that without intervention the project falters or may even fail altogether. • Barriers have to be eliminated, because they take away much needed energy from the project team and the people affected. • The energy for and against the barrier is not injected into the project steps and thus is lost to the project?s outcome.
Business Process Change Management 8
Change Management
“The greatest opportunities are created out of crisis. Crisis forces people to change, and change often brings new opportunities.” - Chinese proverb
Business Process Change Management
10
Case: Change Management at Mobil Oil Australia
Project Phoenix at MOA
• Purpose:
– Process review to improve financial performance, such as ROCE (return on capital employed).
• Terms of Reference for Process Review:
– A company-wide, zero-based, cross-functional study, resourced modestly (to start) with a clear time horizon, responsive to other major changes impacting the organisation and targeted to the expectation of performance in the medium term.
Business Process Change Management 12
Process Transformation Objectives
• Financial
– A net improvement of 3+ percent in ROCE with the aim to become the low cost producer in the industry.
• Behaviour
– Customer focused, internally as well as externally, and profit driven.
• Cultural
– A team oriented, motivated, and committed workforce.
Business Process Change Management
13
Project Management
• • • • • • Initiation Diagnosis Process reengineering Organisation design Implementation Post-implementation review
Business Process Change Management
14
Project Structure
• Executive leadership
– Senior executive from MOA
• Venture team
– Four senior executives from marketing, logistics, manufacturing and administration
• Natural Work Team (NWT)
– Cross-functional employee teams to redesign and simplify process activities and workflow (with support from consultants)
Business Process Change Management 15
Issues to be addressed by NWT
• • • • • Business planning and optimisation Management information Sales force effectiveness Customer service improvement Alignment of marketing staff support and services (general administration) • Engineering, technical, environmental and occupational health and safety support services • Conservation of expenditure • Logistics/operations effectiveness
Business Process Change Management 16
Process Reengineering
• Week 1: team training and activity planning. • Week 2: interviews and data collection. • Week 3 and 4: issues confirmation and documenting the AS-IS case. • Week 5 and 6: data analysis, including benchmarking and the design of alternatives (TO-BE case). • Week 7: alternatives tested with the organisation. • Week 8: recommendations finalised and presented. • Week 9: implementation steps developed and documented.
Business Process Change Management 17
Major issues emerging from NWT process
• • • • • • • • • Lack of profit and customer focus throughout the organisation. Poor communication to employees of the profit position. Many functional barriers to an integrated operation (silo effect). Very complex and unresponsive set of processes that did not meet the customer/ organisation needs. Ineffective management information characterised by excessive reporting. Ineffective strategic planning and optimising. Ineffective product forecasting. Poor management of expenditure (inadequate ownership and control). Unresponsive/inadequate customer service.
Business Process Change Management 18
Changes in Organisation Design
• From functional to business units with profit and ROCE objectives. • Reduction in management layers by an average of two levels.
Business Process Change Management
19
Impact of Changes
• Increase in income after tax by more than six times. • Increase in ROCE from 2% to 7%. • Expense savings of $27.5 million in the first year. • 20% of non-represented workforce removed.
Business Process Change Management
20
Managing People Change
Why People Resist Change ?
People resist change when: • they are comfortable with the status quo; • they do not understand why the change is desirable; • they have doubts about the organisation?s ability to achieve the desired change; • they fear that the new process may de-skill them.
Business Process Change Management
22
Attitude of Participants in a Change Process
+
Idealism Frustration Commitment Decision Awareness
Attitude
Anger
_
Resignation
Time
Business Process Change Management 23
Transition Process in Change
Ending state
Neutral state
(transition)
Emerging state
(beginning)
Business Process Change Management
24
Socio-humanological Issues
• • • • • Info-phobia Hacking Power-shift Collaboration Technology trust (past experience!)
Business Process Change Management
25
Concern-Based Adoption Model (CBAM)
Principles: • Change is a process, not an event, and it takes time to institute change. • Individuals must be the focus if change is to be facilitated. Institution?s will not change until their members change. • The change process is an extremely personal experience. How the individual perceives it will strongly influence the outcome. • Individuals progress through various stages regarding the emotions and capabilities relating to the innovation. • People responsible for the change process must work in an adaptive and systematic way where progress need to be monitored constantly.
Business Process Change Management 26
Stage 6: Refocus/ Refine
• “How can we implement improvements?”
Stage 5: Collaboration
• “How can I help others with the change?”
Stage 4: Consequences
• “What are the benefits on the business?” • “What will the overall impact of the change be?”
Stage 3: Management
• “How will this change be conducted?”
Stage 2: Personal
• “How will the change affect me and my job?” • “How will I be evaluated?”
Stage 1: Information
• “How does it work?”
Stage 0: Awareness
• “What is it?”
Business Process Change Management 27
Best Practices in Process Change Management
• Recognise and articulate an “extremely compelling” need to change. • Start with and maintain executive-level support. • Understand the organisation?s “readiness to change”. • Communicate effectively to create buy-in; then communicate more.
Business Process Change Management
28
Trade Union Concerns
• Job losses resulting from increased efficiency. • Significant and substantive change in the organisational structure, affecting „union-management relations?. • Fear that workers may be asked to undertake more work with a higher level of responsibility (due to empowerment) with no adjustment in pay. • Significant changes in the rewards and recognition system which will reduce equity across departments as well as increase number of equity issues within the departments.
Business Process Change Management
29
Management?s Response to Unions for BPR
• Systematically work to understand union?s concern. • Encourage union to work out their own position on BPR on the basis of fullest information about actual intentions of management. • Develop understanding of conditions under which the union will work with management. • Involve the union formally in any BPR team.
Business Process Change Management
30
Strategies for Implementing Change
• Present a non-threatening image. • Cast arguments for change proposals in terms of the benefits that will accrue to the programme. • Diffuse opposition through an open discussion of ideas. Deal with conflicts by engaging the opposition in legitimate discussion, answering objections, and allaying fears and facts. • Build alliances with operating or line managers who are directly affected by the change. • Bargain and make trade-offs. Resistors may reduce their resistance if they are assured that other changes, which they favour, will be forthcoming. • Begin as an experiment. When something is viewed as temporary, it is less threatening. • Start small and slowly expand the change project.
Business Process Change Management 31
Managing Change:
Few Things to Ponder When Planning for BPR/ERP
• • • • •
Which processes are most important now and why? Does this system meet our needs or go beyond them? Who will be the change champion(s)? Who are the stakeholders? What is the business culture at our company and what are its strengths? • What subcultures do we have and what are their strengths? • How can we apply those strengths to business change?
Business Process Change Management
32
Managing Change:
Few Things to Ponder When Planning for BPR/ERP (contd.)
• What cultural attributes are weak or will interfere with the change? • What will be the toughest changes, and how will we address them? • Who will be responsible for change management?
Business Process Change Management
33
Planning Change Management
• BPR project should explicitly recognise that there will be resistance to the changes that the project introduces and that the change must be managed if the project is to be successful • The most powerful tool that management and the BPR team have in managing change is communication.
Business Process Change Management
34
Change Management Plan Contents
• Stakeholders and their interests: Whom will the project affect? How? • Communication plan • Assessment plan • Intervention plan
Business Process Change Management
35
Communication Plan
• • • • What information people will need? When this information will be available? How to get this information to the people that need it? Feedback mechanism that will let the BPR team know that the information has been received and understood and that will let the recipients submit questions, comments, and suggestions.
Business Process Change Management
36
Contents of Initial Communication
1. 2. 3. 4. 5. 6. 7. Why the BPR project is needed? What is its scope? What results management expects? Who was selected to be on the BPR team and when? What will happen during the project and to whom? What involvement people will have in the project? What can be told now about how BPR will affect all involved? 8. When the rest of the story can be told? }Sp }on }so }r }B }P }R }te }am
Business Process Change Management
37
Change Assessment Tools
• • • • • • Confidential employee survey Focus groups Informal conversations Bulletin boards Attendance trends Monitoring of suggestions, comments, and questions • Interviews
Business Process Change Management 38
Intervention Tools
• • • • • • Coaching Incentives Negotiation Discipline Individual or group counseling Training and education
Business Process Change Management
39
Tips for Managing BPR/ERP?s Cultural Issues
• View ERP implementation as a business initiative, not an IT initiative. Educate and engage senior management as early as possible. • Do not let technical problems dominate the project’s time. Create a dedicated staff position for change management. Use your best and brightest people on the change team. • Articulate expectations before implementation. What will the project?s stakeholders say are the attributes of the new environment in a year? Where are the gaps in the plan? What conflicts of opinion exist today?
Business Process Change Management
40
Tips for Managing BPR/ERP?s Cultural Issues (contd.)
• Avoid political infighting between previously isolated divisions. Managers from the various business units must have a clear understanding of the reasons behind the change. What?s in it for them? Write a change management document that includes the communication strategy and core business principles of the company. • Encourage users to change their job roles. If employees are already overworked, eliminate any nonessential tasks the system may require. Develop incentive programmes to motivate change and incorporate them into performance reviews.
Business Process Change Management
41
Tips for Managing BPR/ERP?s Cultural Issues(contd.)
• Don’t change too much at once. Major change requires an evolutionary approach. Don?t overwhelm your organisation with a system that has more functionality than you absolutely need. Consider a phased rollout and target for short wins to generate momentum during the project.
Business Process Change Management
42
PPT Approach to BPR Change Management
People
Process
Technology
Business Process Change Management
43
PPT Approach
1. People Change
– – – – – – – – –
(Sub-processes)
Process view of business Sub-process identification, mapping and measurement Sub-process team set-up Building process ownership
2. People Change
(Cross-functional processes)
Cross-functional view of process Identifying cross-functional interfaces and extending process teams Defining process outcomes and effectiveness goals Identifying problems/ issues in the existing process Defining process benchmarks and applying it
Business Process Change Management 44
PPT Approach (contd.)
3. People Change
– – – – – – – –
(Team-building)
Institutionalising process management Process management; tool selection and process benchmarking Developing process performance MIS Building process quality rewards
4. Process Change
(Change definition)
Process performance benchmark gap analysis Setting up process vision and performance goals Defining process improvement/ redesign opportunities Defining change management team
Business Process Change Management 45
PPT Approach (contd.)
5. Process Design Change
– – – –
(Redesign definition)
Social system design Technology system design Technology gap analysis Business case analysis for change implementation
6. Technology Change Plan (Redesign implementation)
– Technology evaluation and selection – Planning and monitoring change implementation – Post-implementation measurement
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Pitfalls to Avoid in BPR
• Do not undertake BPR without reference to the strategic goals and objectives. • Do not underestimate the change required to achieve a process orientation. • Organisations must be „ready? for BPR. Could be due to a history of TQM, a crisis situation, or a new visionary leader. • Do not expect too much from BPR too soon. • Do not be wary of the BPR title -- it is the successful „organisational change? that matters! • Do not delegate BPR efforts to IT department. • Always pilot the new process.
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Vulnerability of BPR Projects
High Vulnerability
• Radical change target • Unrealistic expectations • Top management „out of touch? with reality; a „yes? culture • Fast pace, highly visible results • Diverse motives and understanding • Significant resources required • Little knowledge of how to proceed
Low Vulnerability
• Incremental improvement target • Realistic expectations • Top management „in touch? and supportive • Slow pace, results not immediately apparent • Common vision and understanding • Few extra resources needed • Clear method
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Business Process Change Management
Vulnerability of BPR Projects (contd.)
• • • • •
High Vulnerability Complex interdependencies Dependent on others Large scale, wide scope Dynamic environment Confused responsibilities of process and outcomes
• • • • •
Low Vulnerability Few interdependencies Self-contained Small scale, narrow scope Stable environment Clear ownership of process and outcomes
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Why BPR Projects Fail?
• • • • • • • • • Fatal mistake 1. Fatal mistake 2. Fatal mistake 3. Fatal mistake 4. Fatal mistake 5. Fatal mistake 6. Fatal mistake 7. Fatal mistake 8. Fatal mistake 9. Unclear definitions Unrealistic expectations. Inadequate resources. Taking too long. Lack of sponsorship. Wrong scope. Techno-centricism. Mysticism. Lack of an effective methodology.
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BPR?s Nine Commandments
1. 2. 3. 4. 5. 6. 7. 8. 9. Be clear. Be realistic. Be prepared. Hurry up. Have a champion. Focus. Technology yes, but people first. Don?t get snowed. Follow a methodology.
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