Ch10 Change Management

Slide 10.
CHAPTER 10 CHANGE MANAGEMENT
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007
Slide 10.2
Learning outcomes

Identify the different types of change that need to managed for e-commerce Develop an outline plan for implementing e-commerce change Describe alternative approaches to organizational structure resulting from organizational change.
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Management issues
What are the success factors in managing change? Should we change organizational structure in response to e-business? If so, what are the options? How do we manage the human aspects of the implementation of organizational change? How do we share knowledge between staff in the light of high staff turnover and rapid changes in market conditions?
Slide 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 are their responsibilities and where do we obtain them?
Organizational structures do we need to revise organizational structure? Managing the human impact of change what is the best way to introduce large-scale ebusiness change to employees? Technologies to support e-business change the role of knowledge management, groupware and intranets are explored. Risk management approaches to e-business-led change.
Slide 10.5
The challenges of e-business transformation
To help achieve change

Management
buy-in and ownership Effective project management Action to attract staff Employee ownership of change
Figure 10.1
Key factors in achieving change
Slide 10.7
The challenges of sell-side ecommerce implementation

The 7S strategic framework:
A useful framework for reviewing an organizations capabilities to manage ebusiness related change
Slide 10.8
McKinseys 7-S framework
The 7-S framework of McKinsey is model that describes how one can holistically and effectively organize a company. Together these factors determine the way in which a corporation operates. It looks at the seven key elements that make the organizations successful, or not:
strategy; structure; systems; style; skills; staff; and shared values.

Slide 10.9
The 7-S framework of McKinsey

Slide 10.10
McKinseys 7-S framework
1. Strategy
Strategy are plans an organization formulates to reach identified goals, and a set of decisions and actions aimed at gaining a sustainable advantage over the competition. Plans for the allocation of a firms scarce resources, over time, to reach identified goals. Environment, competition, customers.
2. Structure
The way the organization's units relate to each other: centralized, functional divisions (top-down); decentralized (the trend in larger organizations); matrix, network, etc.
Slide 10.11
Structure is the organizational chart and associated information that shows who reports to whom and how tasks are both divided up and integrated. In other words, structures describe the hierarchy of authority and accountability in an organization, the way the organization's units relate to each other: centralized, functional divisions (top-down); decentralized (the trend in larger organizations); matrix, network, holding, etc. These relationships are frequently diagrammed in organizational charts. Most organizations use some mix of structures pyramidal, matrix or networked ones to accomplish their goals.
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3. System
The
procedures, processes and routines that characterize how important work is to be done:
Eg: financial systems; hiring, promotion and performance appraisal systems; information systems.
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Systems define the flow of activities involved in the daily operation of business, including its core processes and its support systems. They refer to the procedures, processes and routines that are used to manage the organization and characterize how important work is to be done.
Systems include:
- Business System - Business Process Management System (BPMS) - Management information system - Innovation system - Performance management system - Financial system/capital allocation system - Compensation system/reward system - Customer satisfaction monitoring system
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4. Staff
"Staff"
refers to the number and types of personnel within the organization and how companies develop employees and shape basic values
refers to the cultural style of the organization, how key managers behave in achieving the organization's goals, how managers collectively spend their time and attention, and how they use symbolic behavior. How management acts is more important that what management says.
5. Style
"Style"
Slide 10.15
6. Skills
"Skills"
refer to the dominant distinctive capabilities and competencies of the personnel or of the organization as a whole.
7. Shared Value
The
interconnecting center of McKinsey's model is: Shared Values. Values are the identity by which a company is known throughout its business areas, what the organization stands for and what it believes in, it central beliefs and attitudes.
Digital marketing activities that require management as sell-side e commerce

Figure 10.2
Source: E-consultancy (2005)
Slide 10.17
Key Challenges of e-business marketing
Gaining buy-in and budget Conflicts of ownership Coordination with different channels Managing and integrating customer info. Achieving a unified reporting Structuring the specialist digital team In-sourcing vs. outsourcing online marketing tactics Staff recruitment and retention
Figure 10.3
The main challenges of managing sell-side e-commerce (n = 84)
Slide 10.19
Different types of change in business
Incremental relatively small adjustment Discontinuous major transformation Organizational includes both incremental and discontinuous
initiate change Reactive direct response to change
Anticipatory
Slide 10.20
Four different forms of organizational change
Tuning:
Incremental
form of change when there is no immediate need for change. "doing things better New procedures, policies
Adaptation
Incremental
form of change, but in response to an external threat New product introduce by competitor
Slide 10.21
Re-orientation: Discontinuous form of change which causes an transformation or a significant change to the organization IBM using e-business reoriented the way it delivered a services Re-creation: Discontinuous form of change where a senior management team of an organization decides that a fundamental change to the way it operates is required to compete effectively doing things differently eg.: airline industry
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Planning Change
E-business projects need project governance Effective project management must includes:
Estimation Resource
allocation Schedule/plan Monitoring and control
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Approaches to managing change

Collaborative widespread participation of employees to define changes Consultative management take final decisions Directive the management team takes the decisions Coercive the management team takes the decision with very limited recourse to employees
Slide 10.24
Business process management
An approach supported by software tools intended to increase process efficiency by improving information flows between people as they perform business tasks Continuous, incremental change
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Discontinuous Process Change
Hammer and Champy (1993) defined BPR as: the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed.
Fundamental rethinking re-engineering usually refers to changing of significant business processes such as customer service, sales order processing or manufacturing. radical redesign re-engineering is not involved with minor, incremental change or automation of existing ways of working. It involves a complete rethinking about the way business processes operate. dramatic improvements the aim of BPR is to achieve improvements measured in tens or hundreds of percent. With automation of existing processes only single-figure improvements may be possible. critical contemporary measures of performance this point refers to the importance of measuring how well the processes operate in terms of the four important measures of cost, quality, service and speed.
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Emerging of new concepts
BPR often linked to downsizing New terms emerged:

Business
Process Improvement: Optimizing existing processes Business Process Automation: Automating existing ways of working manually through information technology
Slide 10.27
Planning Change
E-business projects need project governance Effective project management must includes:
Estimation Resource
allocation Schedule/plan Monitoring and control
Figure 10.4
Stages in developing an e-business solution
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Differences with typical IS
The timescales for delivery of the system are compressed The e-commerce system may be hosted outside The focus of project is content and services Once launched the site is more dynamic
Figure 10.5
An example web site development schedule for The B2C Company
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Prototyping
Rapid Simple Iterative Incremental User-centred
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Staff retention
Hackman and Oldham (1980): Skill variety Task identity Task significance Autonomy Feedback from employer
Figure 10.6
Typical structure and responsibilities for a large e-commerce team
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Outsourcing
Outside-in Inside-out
Slide 10.35
Revising organizational structure

Four stages of growth: Ad hoc activity Focusing the effort Formalization Institutionalizing capability
Advantages and disadvantages of the organizational structures shown in Figure 10.7

Table 10.4
Figure 10.8
Options for location of control of e-commerce
Slide 10.38
Approaches to managing change

Collaborative widespread participation of employees to define changes Consultative management take final decisions Directive the management team takes the decisions Coercive the management team takes the decision with very limited recourse to employees
Slide 10.39
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 knowledge leaves with them. This information drain costs you time, money and customers.
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Explicit and tacit knowledge
Knowledge Management - Techniques and tools for capturing and disseminating knowledge within an organization. Explicit details of processes and procedures. Explicit knowledge can be readily detailed in procedural manuals and databases. Examples include records of meetings between sales representatives and key customers, procedures for dealing with customer service queries and management reporting processes. Tacit less tangible than explicit knowledge, this is experience on how to react to a situation when many different variables are involved. It is more difficult to encapsulate this knowledge, which often resides in the heads of employees.
Figure 10.9
Knowledge management framework
Slide 10.42
KM framework
1.
2.
3. 4. 5.
Identify knowledge Create new knowledge Store knowledge Share knowledge Use knowledge
Slide 10.43
IDC Objectives of KM

Improving profit/growing revenue (67 per cent) Retaining key talent/expertise (54 per cent) Increasing customer retention and/or satisfaction (52 per cent) Defending market share against new entrants (44 per cent) Gaining faster time to market with products (39 per cent) Penetrating new market segments (39 per cent) Reducing costs (38 per cent) Developing new products/services (35 per cent).
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1. Transactional. Help desk and customer service applications. 2. Analytical. Data warehousing and data mining for CRM applications. 3. Asset management. Document and content management. 4. Process support. TQM, benchmarketing, BPR, Six Sigma. 5. Developmental. Enhancing staff skills, competencies training and e-learning. 6. Innovation and creation. Communities, collaboration and virtual teamwork.
Binney classes of KM applications
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Alternative tools for managing knowledge
Knowledge capture tools, e.g. mind maps Knowledge sharing techniques, e.g. chat Knowledge delivery tools, e.g. email Knowledge storage, e.g. database Electronic document management system Expert systems
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Risk management
1.
2. 3.
4.
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.
Slide 10.47
Activity identify risks for ebusiness project

Risk Insufficient senior management commitment Probability 5 Impact 7 Solution Education/training/lobbying by e-business manager to achieve buy-in
High staff turnover/key staff leave

Project milestones not met, overrun budget
6
8
5
6
Use monetary incentives and improve working environment

Appoint experienced project manager and provide support and resources needed. Manager will perform risk management such as this Allow sufficient time for volume, performance testing
Problems with new technology delaying implementation (bugs, speed, compatibility) Staff resistance to change Problem with integrating with partners systems (e.g. customers or suppliers) New system fails after changeover (too slow or too many crashes)
4 6
4 8
Education, training identification of change facilitators amongst staff Tackle these issues early on, identify one contact point/manager for each of partnerships See solution to delayed implementation

Ch10 Change Management

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Slide 10.

CHAPTER 10 CHANGE MANAGEMENT

Key change management issues

The challenges of e-business transformation

To help achieve change

Key factors in achieving change

The challenges of sell-side ecommerce implementation

McKinseys 7-S framework

strategy; structure; systems; style; skills; staff; and shared values.

The 7-S framework of McKinsey

McKinseys 7-S framework

Digital marketing activities that require management as sell-side e commerce

Key Challenges of e-business marketing

The main challenges of managing sell-side e-commerce (n = 84)

Source: E-consultancy (2005)

Different types of change in business

Four different forms of organizational change

allocation Schedule/plan Monitoring and control

Approaches to managing change

Business process management

Discontinuous Process Change

Emerging of new concepts

BPR often linked to downsizing New terms emerged:

allocation Schedule/plan Monitoring and control

Stages in developing an e-business solution

Differences with typical IS

An example web site development schedule for The B2C Company

Rapid Simple Iterative Incremental User-centred

Typical structure and responsibilities for a large e-commerce team

Source: E-consultancy (2005)

Revising organizational structure

Advantages and disadvantages of the organizational structures shown in Figure 10.7

Options for location of control of e-commerce

Source: E-consultancy (2005)

Approaches to managing change

Knowledge management Saunders (2000)

Explicit and tacit knowledge

Knowledge management framework

Binney classes of KM applications

Alternative tools for managing knowledge

Activity identify risks for ebusiness project

High staff turnover/key staff leave

Use monetary incentives and improve working environment

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