FINAL PROJECT CHANGE MANAGEMENT Submitted to: MA’AM TALAT REHMAN
Group members: Fawad Haider Azeem Ayaz Malik Komal Salman
Change Management Final Project Report Introduction Fauji Fertilizer Bin Qasim Limited Plant site is a modern Urea and Di-Ammonium Di -Ammonium Phosphate (DAP) fertilizers manufacturing complex located in Eastern Zone of Bin Qasim, Karachi, with Head Office located at Harley Street, Rawalpindi. Initially named as FFC-Jordan Fertilizer Company (FJFC), with FFC (30%), FF (10%) and JPMC (10%) as main sponsors. The company was formally listed with stock exchanges in May 1996 and commercial production commenced commenced on Jan 2000. In 2003 the company was renamed renamed as Fauji Fertilizer Bin Qasim Limited (FFBL) as Jordan Phosphate Mines Co. (JPMC) had sold its entire equity in the company. Accordingly Phosphoric Phosphoric acid supply agreement with Jordan was terminated. The company turned out to be profitable after 3 years i.e, by 2004 and declared 'maiden dividend' in 2004. Profitability has constantly been on the rise since then and 2007 has been the most profitable year of the company. One of the milestones in the success of FFBL is its accreditation of ISO certification, which was achieved in Mar 2006 for both t he Head Office and Plant site. FFBL also have membership of industry association and trade bodies;
Rawalpindi Chamber of Commerce
International Fertilizer Association
The facility is designed with an annual capacity of 551,000 metric tons of urea and 445,500 metric tons of DAP, revamped to 670,000 metric tons of DAP. Our Distinction
FFBL has been declared as Top Third Company amongst leading top 25 listed Companies by the Karachi Stock Exchange (KSE) by acknowledging its performance. FFBL is the only fertilizer complex in Pakistan producing DAP fertilizer and Granular Urea thus making significant contribution towards agricultural growth of the country by meeting 45% of the demand of DAP and 13% of Urea in domestic market.
Vision Statement “To be a premier organization focused on quality and growth, leading to enhanced stakeholders value.”
Mission Statement “FFBL is committed to remain amongst the best companies by maintaining the spirit of
excellence through sustained growth rate in all activities, competitive price, quality f ertilizer and providing safe and conducive working environment for the employees.”
Organizational Structure:
MD:
Lt Gen Muhammad Zaki, HI, HI (M), ( Retd) Company Secretary
Brig Shaukat Yaqub Malik SI (M), (Retd) General Manager Finance
Syed Aamir Ahsan General Manager Plant
Mr. Anwar Mehmood Shahid Head Supply Chain Management
Brig. Imtiaz Ahmed, SI (M), (Retd) Senior Manager (Human Capital Management)
Brig Pervez Khalid, SI (M), (Retd) Senior Manager (Admin)
Lt Col Muhammad Saeed, TI(M), (Retd)
Performance & Production
FFBL fertilizer complex is state of the art manufacturing facility with advanced Distributed Control System for safe and efficient operation. The phosphoric acid being raw material for DAP plant is imported from Morocco and initially stored in tanks at Port Qasim. Design capacity viz-a-viz actual production of Plants is as under: Manufacturing Plants
Production (Metric Ton / Day)
Original
Actual (Approx)
Urea Granular
1670
1920
DAP
1350
2230 (After Revamp)
Ammonia
1270
1570 (After Revamp)
Market Share
Recently, FFBL is making significant contribution towards agricultural growth of the country by meeting 45% of the demand of DAP and 13% of Urea in domestic market. Competitors
Their competitors in the domestic market are:
ENGRO Chemicals Pvt. Ltd.
Fatima Fertilizer Company National Fertilizer Development Company
Dawood Hercules
Key Environmental Issues FFBL is facing a lot of environmental issue such as political, economic, technological issue. POLITICAL ISSUES:
The political condition of Pakistan is very unstable, everyday there is instabilities in government which cause problem for ffbl. FFBL also deal with international stakeholders, so for that instabilities in government cause problems in making deal with ffbl. The overall image of Pakistan also damaged by the political condition of Pakistan. The tax policies the trading policies all effect the ffbl business. Economic condition:
The economic condition of Pakistan is also instable, due to which world wide the value of rupee depreciate day by day, which cause problem for ffbl to doing business. The petroleum prices also effect the ffbl business, because day by day the instable petroleum prices effect the ffbl business. shortage of gas is big problem for ffbl because for the production gas is required without that manufacturing is not possible. So availability of gas is main issue which currently ffbl is facing. Technological issue:
As world moving very fast and technology is making advancement very fast. So for ffbl to remain in the market it is necessary to adopt new technology. Because in market there is a lot of competition and for maintain your value ffbl should adopt new technology. As the major change which we observed is implementation of SAP(software). That is one of major change and one of the most expensive software in market.
INTERNAL FORCES OF CHANGE IN ORGANIZATION The internal environment of an organization refers to events, factors, people, systems, structures and conditions inside the organization that are generally under the control of the company. The company's mission statement, organizational culture and style of leadership are factors typically associated with the internal environment of an organization. As such, it is the internal environment that will influence organizational activities, decisions and employee behavior and attitudes. Changes in the leadership style, the organization's mission or culture
can have a considerable impact on the organization .In FFBL there are internal forces which push ffbl to apply change. That is structure and people. The people on top management understand the importance of SAP in market and feel that for maintaining in market it is necessary for implement SAP in organization.
Why People Resist Change and how resistance might be managed 1. When the status quo is perceived to be satisfactory.
Resistance will be less if participants clearly understand the basic problem or opportunity and the consequences to maintaining the status quo. Create a “burning platform,” outline a real or
hypothetical scenario about what will happen if status quo continues to be the norm. 2. When the purpose of change is not clearly understood.
Resistance will be reduced if provisions are made for participants to ask questions and give feedback about the change. They need to know the “why” behind the “what” and the “how.” In
the absence of adequate information, people will invent their own —this may lead to imaginary problems. 3. When people become engaged in short-term, myopic thinking. People resist change because they won’t defer gratification and because they can’t see beyond
the boundaries of their own worldviews. Resistance will be less if you can substantiate the longterm payoffs of the change effort and encourage participants to see the personal benefits to the change. 4. When the change agent is not trusted or respected.
Resistance will be less if participants see that the change effort is supported and endorsed by key opinion leaders within the organization. Do you have credibility? Have you EARNED the respect of those affected by the change? Personality conflicts between the change agent and participants may cause resistance to change. Treating people with dignity, respect, and integrity helps in eliminating this type of resistance.
5. When those affected by it are not involved in the planning.
Resistance will be less if participants feel that the project is their own —not one devised by outsiders. Participants should be asked to contribute (knowledge, attitudes, suggestions, feelings, opinions) to the change.
6. When those affected lack courage and self-confidence.
Change threatens our self-esteem. Resistance will diminish when we help people focus on things they can control. By focusing on things we can control we can reduce the innate fear of the unknown. As you help people successfully break down a major change into manageable parts, you will help them develop the courage and confidence to proactively confront and manage other aspects of the change. 7. When there is personal fear of failure to master n ew skills.
Resistance will be less if participants are given the appropriate training & education. Tell them why you choose them (for what qualities) to be a part of the change effort. Implementing the change on a trial basis may reassure the person that success is possible. Change on a trial basis can reduce the fear of personal loss and give the people involved an opportunity to get more facts about the change. 8. When there is a fear of personal loss of ego, status, power, or resources.
Change can step on the ego of the recipient — it requires “those who think they have arrived” to admit they have been wrong. Reduction in the skill required, the importance of the job, or the responsibility of the worker involved may create insecurity and lead to resistance. Reassure people of their worth to the organization. Resistance will be reduced when participants understand how the change effort will further or contribute to their vested interests. 9. When work pressure is excessive and planning is haphazard or insufficient during the implementation phase of the change.
Resistance will be less if the change is timed and planned well. When change comes as a surprise people will resist it. Participants need time to evaluate change before it occurs. Those affected should be informed well in advance. If a new change comes on the heels of a previous change, particularly one that failed, you may be overloading the system. The timing for change must be well thought-out.
10. When implementation strategies appear to be rigid and inflexible.
Resistance will be less if the change effort is kept open to revision and reconsideration if experience indicates that modifications would be desirable.
Managing Resistance to Change It is normal to experience resistance whenever there is change. Understanding that there will be resistance to change will help you anticipate resistance, identify its sources and reasons, and modify your efforts to manage the issues of change to ensure the success of your change efforts. Resistance is actually healthy. Try not to react against it defensively. It is good for you because it makes you check your assumptions and it forces you to clarify what you are doing. You must always probe the objections to find the real reason for resistance. Many times, it comes down to personal fear. As the leader, you must take the time to understand resistance and you may have to come at it from several different angles before it is conquered. You must understand what your employees are feeling, as well as thinking. Ways to reduce resistance to change:
Involve interested parties in the planning of change by asking them for suggestions and incorporating their ideas. Clearly define the need for the change by communicating the strategic decision personally and in written form. Address the "people needs" of those involved. Disrupt only what needs to be changed. Help people retain friendships, comfortable settings and group norms wherever possible. Design flexibility into change by phasing it in wherever possible. This will allow people to complete current efforts and assimilate new behaviors along the way. Allow employees to redefine their roles during the course of implementing change. Be open and honest. Do not leave openings for people to return to the status quo. If you and your organization are not ready to commit yourselves to the change, don't announce the strategy. Focus continually on the positive aspects of the change. Be specific where you can. Deliver training programs that develop basic skills as opposed to processes such as: conducting meetings, communication, teambuilding, self-esteem, and coaching.
CHANGE And How They Help The Organization Many companies are realizing that SAP solutions have become extremely important to their businesses. This realization is arising from the fact that many Fortune 500 companies use SAP systems extensively internally for their daily operations and reporting. So what exactly does SAP stand for? It is an acronym for Systems, Applications and Products in data processing. Over time, many companies start to discover deficiencies in their information systems architecture. Most legacy business systems were made up of islands of automation – separate systems that handled some core business needs. There may have been systems to handle the General Ledger, another to handle the sales processes, a separate system to manage the manufacturing or production processes, etc. Data had to be exchanged between these subsystems in order to generate the reports that various levels of management needed to run their operations. When there were errors or inconsistencies between these sub-systems, these flowed on into the consolidation process and skewed the management reports. SAP ERP systems – Business Suite / R/3 and Business One – are fully integrated business realtime systems. They enable transactions to be processed end-to-end and eliminate data inconsistencies between sub-systems. Many companies replace their old business systems with the best-of-breed ERP package developed by SAP. The benefits of using SAP for your business are numerous. SAP delivers systems that are modern and highly efficient. Their support infrastructure is unparalleled in the software industry. In addition, SAP has developed industry-specific ERP solutions that address the needs of over 28 industrial sectors. SAP is present in more than 120 countries worldwide. SAP has managed to build up a client base of more than 12 million users worldwide. Those numbers are estimated to grow as more and more enterprises jump on the SAP ERP bandwagon. The main business benefit of using SAP is that you get a comprehensive set of integrated, crossfunctional business processes. Here are some other benefits of using SAP: Align Strategies and Operations
Prior to the implementation of an SAP system, a thorough analysis of the current environment is done. This is usually referred to as the ‘As-Is’ analysis. All issues are identified for rectification during the project. The short, medium and long-term strategies of the business are identified, clarified and prioritized. All internal workflows are aligned to enable the eventual effective use of the SAP system. In the next major step, the future state of the business’ information system is specified. This is referred to as the ‘To-Be’ state. It is the responsibility of the project team and possibly consultants
to bridge the gaps between the ‘As-Is’ and ‘To-Be’ states to build a workable project
plan.
Enhance Productivity and Insight
The productivity enhancements arising from an SAP implementation can be tremendous. Data is only entered once. There are no sub-systems to consolidate and verify. Data can be forwarded to others within the organization by efficient workflows – using internal messages, emails, SMS alerts or other means. Operations can be authorized and passed along for the next person to process. Employees can process many transactions on their from various access terminals. This can include leave applications and submission of expense claims. The overall reporting and analytics environment is enhanced to a level that facilitates operation management.
Minimize Costs by Increasing Flexibility
In order to improve process standardization, efficiency and adaptability, SAP relies on enterprise services architecture. SAP extends its business eco-system by extrapolating transactions, information and collaborative functions.
Reduce Risk
Solve complex business challenges today with SAP, your trusted partner for long-term growth, with over 30 years of experience working with organizations of all sizes in more countries than any other vendor.
Improve Financial Management and Corporate Governance
Financial and management accounting functionalities combined with business analytics offers the SAP user deep visibility into their organizations. Furthermore SAP increases profitability, improves financial control, and manages risk.
Optimize IT Spending
SAP integrates and optimizes business processes as well as eliminates high integration costs and the need to purchase third-party software. Use of SAP incrementally improves cash flow and reduces costly borrowing.
Gain Higher ROI Faster
A business can deploy SAP by using rapid-implementation techniques which cost less than half what traditional approaches cost. It is also possible in certain cases for companies to reduce implementation time and costs by leveraging on preset defaults and prepackaged versions available for specific industries.
SWOT Analysis Strengths
Sole DAP producer in Pakistan Ideal Location Authority and Command Product Quality IMS and SAP Certifications Health & Safety Brand Name Pricing Power
Opportunities
Unsaturated Urea and DAP market in Pakistan Forward Integration Proper Research & Development Innovation New services and products
Weaknesses
Marketing Lack of Training Raw Material Import Management Online Presence
Threats
Competitors Loss of trained staff Depleting Natural Gas Reserves Unstable Political/Economic Conditions Substitute Products
Strengths Only DAP Producers in Pakistan
FFBL is the only fertilizer complex in Pakistan that produces DAP fertilizer. Thus makes significant contribution towards agricultural growth of the country by meeting 45% of the demand of DAP from entire country.
Ideal Location
Being located near sea port; FFBL enjoys an ease in transportation of raw material. Phosphoric acid and UF-85 are the major raw materials that are being imported through shipments Morocco and Jordon.
Authority lies with CEO and Chairman
All authorities lie with CEO and chairman. There’s a hierarchical reporting system of problems. Junior Staff reports to the senior staff and this report can further go to the GM, CEO or the Chairman depending up on the nature of the issue.
High Urea quality
FFBL product, granular urea (Sona Urea) has the cutting edge over the conventional Prilled urea with the following superior qualities:
Cheapest among all nitrogenous fertilizers based on per unit cost of nutrient
Less acidifying than many other nitrogenous fertilizers hence most suited for high pH soils
High concentration of nutrients makes packing, storage and transport costcheaper
Larger granular size
Greater granules strength
Minimum fines, dust and powder
Minimum losses in the air Least caking property
Easy to spread in the fields
No settling on crops/leaves
IMS and SAP Certification
FFBL adopted IMS (Integrated Management System) in 2007 which integrated ISO9001, ISO 18001 and ISO 14001; which is one of the milestone and later on the company has implement the SAP software throughout the FFC and FFBL and it is considered to be another great achievement for the company. The SAP implementation project was kicked off in May 2009 and took 11 months for its completion. FFBL implemented 11 modules covering all the business processes of FFBL operations.
Health & Safety
FFBL maintains a safe workplace by following safety and health rules and practices. Accidents, injuries, and unsafe equipment, practices or conditions are immediately reported to a supervisor or other designated person. FFBL is committed to keep the workplace free from hazards.
Weaknesses Marketing being outsources to FFC
FFBL doesn’t have its own marketing department; their products are being marketed by
FFC due to which they get their revenue after a week. It may also affect their sales due priority based marketing. Lack of Training
No proper training programs have been defined and conducted for managerial staff.
Raw Material Import
Urea and DAP production at FFBL largely depends upon the imports of raw material including Phosphoric acid, sulfuric acid, sand, coating oil and UF-85. This increases their reliance on imports.
Management Lies with Army men
Most of the management in FFBL is controlled by retired army officers who have army mindset due to which the company faces difficulties in problem analyzing and problem solving steps
Online Presence
The online market is essential for displaying information and selling products through the web. A weak online presence can result in loss of opportunities. Especially, if focusing towards the foreign market.
Opportunities: Unsaturated Urea and DAP market in Pakistan
Demand for urea and DAP in Pakistan is higher than the cumulative production of all urea and DAP producers in Pakistan; resulting in urea imports, to bridge up the demand and supply gap. Therefore, there is an opportunity lies with all fertilizer manufacturers to increase with their production to meet the market needs.
Forward Integration
FFBL can integrate forward to develop its own marketing staff as well as its own distribution channels to maximize its profits.
Proper Research & Development
Proper Research & Development programs found a bright scope for the further improvement of urea quality as well as for the development of new fertilizer products. Also further determining the needs of local farmers, etc.
Threats: Competitors
The fertilizer companies like Fatima fertilizer and ENGRO Chemicals(Pvt.) Ltd in fertilizer market, pose an apparent threat for the market share of FFBL.
Loss of trained staff due to intervening competitors
The company staff is shifting to new companies in urea business as they are offering better salary packages and facilities. This creates a window of opportunity for the competitors to take advantage of a situation and to poach the executive talent and skilled labor from the company. If this situation is not handled at the moment, the BEST and BRIGHTEST may be the first to leave.
Depleting Natural Gas reserves in Pakistan
FFBL utilizes Natural Gas as the most important raw material for the production of Ammonia; which is the major input for the production of Urea and DAP. Due to depleting natural gas reserves in Pakistan the price of gas is constantly increasing which poses a certain threat to fertilizer industries in Pakistan.
Unstable Political /Economic Conditions
Unstable economic and political conditions are largely effecting the agricultural production of Pakistan, which subsequently poses a threat to the Fertilizer Industry.
Change Management and Leadership role: The ultimate goal of change management is to engage employees and encourage their adoption of a new way of doing their jobs. Whether it is a process, system, job role or organizational structure change (or all of the above), a project is only successful if individual employees change their daily behaviors and workflows. This is the essence of change management - mobilizing the individual change necessary for an initiative to be successful and deliver value to the organization. People used to discuss the importance of "organizational change". "Change" is an overarching term referring to the process or result of becoming different, while "transformation" is a specific kind of change. The "transformations" tend to refer to changes that are more radical and of a larger magnitude. These are not incremental and transitional changes that involve merely fine-tuning the status quo. Instead, they are discontinuous changes or paradigm shifts that involve redefining the organizational values, purpose, attitudes and beliefs, and they frequently require a qualitatively different set of organizational habits, such as in terms of strategy, leadership and culture. These qualitative changes in turn bring about changes to existing organizational systems, structures, management practices, organizational climate and technological innovations. The change process brought about by a transformation is complex, non-linear, full of uncertainty and open-ended. This means that the changes may happen at uneven rates at different points in time, that there may be progress towards the desired objectives followed by regression and then progress again, and that a simple action may lead to unintended consequences. In support of this, there is some empirical evidence that the transformation process may unfold in unpredictable ways and lead to unintended outcomes. This perspective of change as a complex phenomenon is in contrast to the prevailing, more traditional, theoretical paradigm of change as a simple and linear process which is
typically represented by a three-stage model by Lewin (1951) that involves unfreezing the current system, changing, and then refreezing the new system. In the first step, the current equilibrium is disturbed such that the status quo is recognized to be undesirable and there is the motivation to change. In the second step, resources are mobilized to make the necessary adjustments. In the final step, the system is stabilized at a new equilibrium so the new behaviors are safe from regression. This model assumes that change takes place neatly and predictably in a linear movement through the three steps. People are at the heart of an organization. Thus, a good understanding of how changes are typically perceived and experienced by people will help leaders of transformations play their role more effectively. Importantly, leaders cannot assume that others share their perspective of the transformation. There is a whole system of people in the organization responsible for supporting employees in making this change. From the highest levels of leadership to front-line supervisors, effectively managing change requires a system of actors all moving in unison and fulfilling their particular role based on their unique relationship to the change at hand.
Kurt Lewins’ Force field theory of Change Kurt Lewin's force field analysis change model was designed to weigh the driving and restraining forces that affect change in organizations. The 'force field' can be described as two opposite forces working for and against change.
Kurt Lewin's force field analysis change model describes a similar situation. The force field analysis is a method to:
Investigate the balance of power
Identify the key players involved in decision-making
Identify who is for and who is against change
Identify ways to influence those against change
In an organization, change is a bit more complicated; there are driving and resisting forces at work. Driving forces are those seeking change. Resisting (restraining) forces are those seeking to maintain the status quo. The goal for the driving force is to gain equilibrium, or a balance of power. Resisting forces control the status quo, while driving forces seek change. Sociologist Kurt Lewin developed a 'force field analysis' model (1951) which describes any current level of performance or being as a state of equilibrium between the driving forces that encourage upward movement and the restraining forces that discourage it. Essentially this means that a current equilibrium exists because the forces acting for change are balanced by the forces acting against change.
The driving forces are (usually) positive, reasonable, logical, conscious and economic. The restraining forces are (usually) negative, emotional, illogical, unconscious and social/psychological. Both sets of forces are very real and need to be taken into account when dealing with change, or managing change, or reacting to change. Increasing the driving forces is not enough for change, as the restraining forces remain in place, and as long as they remain in place it becomes harder to use the driving forces. An analogy is when you push against a spring; the more you push, the harder it becomes and as soon as you stop pushing the spring reverts to its previous position (after having sprung past that point). Therefore unless both the driving and restraining forces are balanced a kind of yoyo effect results; a change and then a reversion back, and then a change, and then a reversion back, and then a change, et cetera, et cetera. It’s important to note that the restraining forces
may not be conscious – i.e. they should not be regarded as being deliberate attempts to subvert change (although they may be). Lewin suggested that change would be easier and longer lasting if the forces against change were reduced, rather than the forces for change being increased. He also mentioned that modifying the forces which maintain the status quo may be easier than increasing the forces for change.
Kurt Lewin’s model has 3 steps:
unfreezing – reducing strength of forces which maintain current equilibrium
moving – developing new organizational values, attitudes and behaviors to help move the organization on
refreezing – stabilizing after the changes have been made so that there’s a new equilibrium.
This simple model provides complete information on the stages that FFBL has gone throughout its change process. Since, the inception the company had to go through various phases to apply the changes practically throughout, the organizations’ structure and its
processes. In the early 2009, when the competition was very high and technology was evolving rapidly, and those organizations whom grasped the technology at the right place and time, became the pioneers and lead them to a attain the technological edge in the highly competitive market. Speaking of the fertilizer sector, the competition is fierce, amongst the local and international
manufacturers. After 2007, there was a boom in the fertilizer industry, there were a lot of Foreign direct investments and the Government policies also encouraged the local manufacturers to invest in Fertilizer Industry. FFBL started to suffer losses as it lacked behind in responsiveness to the demand uncertainty and was not vibrant to the changes in the environment. Unfreezing and getting motivated for the change is all about weighing up the 'pro's' and 'cons' and deciding if the 'pros' outnumber the 'con's' before you take any action. This is the basis of what Kurt Lewin called the Force Field Analysis, According to our interview with the manager, all these details were addressed accordingly to ensure the success of the change implementation program. At FFBL, transition was the inner movement or journey that it took reaction to a change. This second stage occurred as FFBL thought these changes were needed. At FFBL, employees were 'unfrozen' and were moving towards a new way of being. That said this stage is often the hardest as people are unsure or even fearful. Our manager related the example of imagining bungee jumping or parachuting. He was of the view that employees might be convinced that there’s a great benefit for them to make the jump, but now they find themselves on the edge
looking down. Scary stuff! But when they do it they may learn a lot about themselves. This is not an easy time as employees at FFBL were learning about the changes and need to be given time to understand and work with them. Support was really important here for the FFBL employees and it was in the form of training, coaching, and expecting mistakes as part of the process, while learning and certifying of SAP software. According to the manager, the using role models and allowing people to develop their own solutions also help to make the changes across the organization. It's also really useful to keep communicating a clear picture of the desired change and the benefits to people so they don't lose sight of where they are heading. Then these changes are accepted and soon become the new norms. Employees form new relationships and become comfortable with their new certified routines and practices with the SAP software and then the system will become refreeze. Tackling the resistance towards change, introducing the change and new processes into the organization system, this phase was very crucial for the success of the change implementation. As it lead the company; to be molded entirely into the new system. Following this process, the company had to be restored as per the new structure and system. FFBL took some time period to attain this position but it swiftly went through all these three steps i.e. unfreezing, moving and refreezing. And consequently the change implementation program at FFBL was true success.
Learning and change
One central perspective of FFBL is that the goals for a successful
learning-based change
initiative are typically formulated in a way that combines two crucial elements: 1) meeting a critical business need 2) The FFBL management made fundamental process improvements. In each case there were different solutions to the seemingly-contradictory demands of work and learning, The shortrun business results and long-run process improvements. In implementation phase an important role is played by a "core learning team", a reflective leadership group that developed collaboratively a shared vision and strategy for the initiative which combines the two key elements in a way that works for the setting. The learning-based initiative is viewed as a living system that typically progresses through three phases, centered on the pilot change project according to the FFBL management. For FFBL, it is understood by the management very well, the ability to learn better and faster than its competitors is an essential core competency. FFBl being a learning organization can be recognized from the outside by its flexibility in changing how it relates to the external world and how it conducts its internal operations. It can be recognized from the inside by an consensus among its groups in which learning from challenges and mistakes is key learning . While successful results are very important to learning organizations -- typically they set very high standards -- they recognize that often success is only achieved after initial mistakes, and what people learn from those early mistakes is often the key to eventual success. At FFBL employees must learn from everyone's mistakes in the industry, not just their own. It is too costly to have people repeating mistakes that have already been made by others , this was exactly the case that FFBL was facing at that time . A story from FFC a subsidiary organization of FF, tells of a very worried manager going in to see his boss right after the failure of the big innovation project that he had headed. Wasting no time, he said, "I suppose you're going to fire me" . "Why should I do that," replied the boss, "when I've just invested 6 million in your department development ?" That incident reflects several ways of thinking that are characteristic of a learning organization: important learning comes from mistakes -- once they have been properly analyzed; this form of learning is at least as important as formal training, and a company must take good care of the people who develop this knowledge. The FFBL management, when bought this reactive change to its systems and processes, faced a lot of issues and tackled them effectively. This was a major change in terms of technology, a big challenge to break the existing systems and bring in the new structure, processes and technology. The implementation of THE ERP program of SAP was a major challenge in terms of
acceptance of the new systems, learning new technology, this created learning anxiety among employees of FFBL, especially the old employees perceived this as a major challenge to learn and implement new systems and forgo the conventional systems. The management and all the stakeholders at FFBl learned from their mistakes, they were open to criticism feedback, and learning this enabled them to survive the challenges throughout the change implementation, and execution. During the execution phase of the change programs mostly the Organizations fail because they anticipate the resources ineffectively, and cause exhaustion to the company resources. FFBL did a lot of anticipatory research, the financials needed were very well estimated, It took almost 3 years to implement and execute the Program effectively organization wide, and the cost incurred were extremely high as evident as SAP implementation is the costliest process to any company. According to researches many Businesses fail while implementation of the Project of SAP as it exhausts so muh of company’s resources many Organizations go bankrupt.
According to the FFBL management, and the SAP certified professionals working at the Organizations, the TOTAL COST INCURRED TO IMPLEMENT THE CHANGES AND IMPLEMENT THE SAP PROGRAM WAS ESTIMATED TO BE 85 Million DOLLARS. The management was of the view that only the implementation is not the major cost center there are major other costs associated with this execution of the project afterwards too, The costs of training , making the employees learn the new systems, and maintaining the technical back end office and certification fees etc, and license renewal these all are continued costs following the SAP implementation at the Organization. According to the SAP Certified professionals there are various questions to be answered, and issues to be addressed, they are listed under as following:
Geographies – the implementation of SAP Business One going was to cover multiple territories or countries. There were likely to be different set-up and configuration requirements based on the different legal and fiscal requirements for each country. Another potential complexity with multiple country support is different language sets. SAP Business One offered support in multiple languages covering multiple legal and fiscal requirements –it was of great help for FFBL that were looking to expand overseas.
Data conversion – Since FFBL was not a start up, it was highly likely that it had to convert data from its legacy system.
In FFBL and According to SAP solutions, Data conversions are categorized into two broad categories – master data and historical data. SAP Business One offered a Data Transfer Workbench (DTW) module which assists with the upload of master data. There is still some work to be done – export data from your legacy system, check data, import into SAP Business One and reconcile / check data again. From a pricing / implementation point of view the real relevance with regards to data conversions is whether or not there is a requirement to export historical data and if so does the historical data need to be imported in summary or detail format. Reporting – SAP Business One offers many standard reports and Dashboards. Even so it is highly likely that you will want some reports changed or custom written. The number and complexity of reports to be written to your specific requirements will have an impact on the days (and therefore price) to implement SAP Business One. Report development pricing can be substantially reduced by considering platforms like SAP HANA. Training – how many people need to be trained? Will training be on-site or off-site and will site specific user notes be required. Many companies adopt a “train the trainer” approach where
Leverage Technologies is responsible for training super users of the customer. These super users then train other users in the team. This approach helps reduce implementation pricing for remote and distributed sites. Business Processes – sound obvious but is sometimes overlooked. If your business processes are very specific to your industry and your requirements are outside of the standard functionality offered then extra days consultancy or system development will be required. The suggestion is always to try and keep the initial implementation as simple as possible. This will reduce your upfront implementation costs whilst providing you with a platform for further growth. User skill set – the skill level of users (including accounting, business knowledge and general computer skills) are all factors in determining how long it will take to implement SAP Business One in your business. Project Management – the amount of project management required will vary dependent on the factors listed above. In summary – there are a number of questions to be answered before being able to give a cost to implement SAP Business One. Answer the eight questions listed above and you will get a much better idea of the days required for implementation.
Communicating Change Message A learning organization like FFBL, is good at two kinds of learning: good at creating new solutions and good at sharing knowledge with other members who may needed it. At FFBL, there had to be openness to new ideas, wherever they come from, and to sharing knowledge for the good of the business -- setting aside the embarrassment over sharing one's mistakes and the reluctance to ask for help or to borrow someone else's solution. According to manager we interviewed MR. Hassan Ali Wasti ; It is not just individual attitudes that have to change, though, it is also the policies and patterns of FFBL management behavior that make it harder for employees to be good learners and sharers. When employees can trust that their bosses will not penalize them for revealing mistakes or for seeking help with a difficult problem then there will be more organizational learning and better solutions to be shared. Like in every learning Organization, Lack of openness in the workplace is very costly. Design engineers at FFBL of SAP Solutions, who say nothing about the problem they cannot solve run the risk that, when they do solve it, they will require other key parts of the design to be changed. And by that time others have made costly investments in tooling that must now be scrapped, compounding costs and delays. In one of the cases we studied, the FFBL new Process design project at a leading Fertilizermaker, major cost savings were achieved (over $60 million) through their ability to confront and change this powerful pattern of mainaining old conventional file systems , a long-standing part of their workplace culture. And processes. They recognized that this tacit norm was based on deeper-lying assumptions (shared by all of them) about what is expected from "a good design engineer" and that those "mental models" were reinforced by the behavior of managers who consistently chastised and humiliated engineers who brought up unresolved problems. So, naturally they concealed their problems while shifting to the new system, reporting nothing, until they were close to a solution. During the FFBL change process, it’s top managers learned to see how their own behavior was
creating results they did not want and they learned how to behave differently and get better results -- both in terms of cost savings and in the satisfaction they all derived from their work. With less blaming, there was more trust, openness, and better results. In order for the
engineers to learn new ways of behaving, though, their bosses first had to learn new ways of supervising. The key feature at FFBL was , what such a workplace looks and feels like. Keeping focus on the change process: how to become more like a learning organization. According to the interviews conducted, One of the first steps in the transformation is for members of the FFBL to begin to change how they think about organizations, for those mental images affect how people act at work and that is what needs to change According to Learning-based approaches to organizational change, they see organizations as living systems with people in essential roles. People can think for themselves and often resist those who try to change them. We will never reach the goal of building a learning organization to execute change successfully . At FFBL the organizational change involved significant personal change as well. The change message at the company was communicated very effectively through keeping in mind these factors and addressing the step by step :
From what to what? To Tell the specifics of what will be different in how
What does this change meant for at FFBL?
Will this make a difference? Is there a good business reason for doing this? How will this help the business and its competitive position in the market ?
How will success be measured at FFBL following the change process? If the company can’t measure success, how will you know that there has been a return on FFBL’s effort
and investment? And how will they know whether to reward or hold whom accountable for theirparticipation?
What is the support level for this change? Do the top, middle and lower management accepting and taken into confidence while bringing this change.
Similarly communicating change to the stakeholders at FFBL was of great importance as well to ensure the success of change implementation, the company management took into account these steps while communicating change to its stakeholders The importance of stakeholders when considering change:
Stakeholders are the groups and individuals who will be influential in the success of organizations change plans. It is often the skill with which they communicate, consult and involve these people which will determine the success of their change initiative.
For a successful change employees need to understand who their stakeholders are, like at FFBL they have various stakeholders involved , their Plant engineers, management levels in FFBL, Farmers who are the end users of the products of FFBL, and The society and the Government authorities, shareholders. •How will they measure the success of this change at FFBL ? What is it that they want to see in
Future at FFBL? •
How much influence do they have in the comapny?
•
How important are the stakeholders concerned at FFBL?
Think about what kind of power/influence they have Communicating change to stakeholders plays a very pivotal role in determining the successful implementation of the change program , Key considerations in planning communication about the change. At FFBL, just like any other company All change agents express enthusiasm, warmth, and confidence — in the change program implementation.
It is especially crucial for leaders to
communicate congruently –this is exactly what was done at FFBL, by its top management, that was , to align the spoken word with body language that supports an intended message. Then there is the matter of timing which is of very much importance while executing change at any organization. If a leader’s gestures are produced before or as he is talking about the
rationale for change, he appears open and confident that this change is likely to succeed. When developing the change communication strategy FFBL top management greatly believed in what they wanted to say was in align with what the employees wanted to hear.
Conclusions Following the change implementation keeping a follow up on the change program is very important to maintain, until and unless it is done effectively the change execution cannot be undertaken successfully. Monitoring and controlling the effectiveness of organizational change activities are often more difficult ,given their emotional and typically subtle nature. How do we know that individual employees are accepting the change or are we about to experience a resistance? How do we know that the impacted organizations have been able to adapt and accept the changes, or are the supporting roles, processes and procedures going to undermine or undo all of our efforts? How fast can we expect a change-averse culture to change? These all are key questions that need to be answered while evaluating the change program at FFBL The big difference is in how the monitoring and measuring is done. In the case of the technical component, like implementation of SAP program at FFBL, it is very necessary to establish a performance standard and collect empirical data which measures performance against that standard. If the standard is met we’re in the clear, if not it triggers alternative plan. For example, like at FFBL considering the project of first indication that training or change management were not successful when a major business process (like extracting data out of legacy and converting to SAP cannot be executed. FFBL on a regular basis keeps a track on the change program which was the implementation of SAP Solution ERP program, replacing the conventional Legacy system and automating the data systems maintenance. This evaluation analysis is done through regular basis through surveys, testing results and regular feedbacks from all the concerned stakeholders. Surveys or questionnaires to monitor critical elements associated with organizational change provide a more structured approach to monitoring organizational change risks.
In this
approach at FFBL the project team creates a survey designed to take feedback from the all stakeholders about its perception of the project and the change factors which are contributing to the success (or failure) of the effort. Through this, the team can quickly identify areas which require more attention and intervention. In conclusion, organizational changes and the management of those changes can be a critical component for project success. Great attention is required to understand what organizational changes may be required and their impact to both organizations and individuals. Understanding the nature and scope of these changes enable the project team to more
effectively plan, execute, and monitor their execution and effectiveness of the implementation of SAP Program at FFBL.
References:
http://www.ffbl.com/links.htm http://www.change-management-coach.com/kurt_lewin.html http://www.transworldnews.com/1099784/c1/fauji-fertilizer-bin-qasim-limited-ffbl-companyprofile-and-swot-analysis-new-company-profile-report http://www.scribd.com/doc/29506466/FFBL-Management-Report http://cjni.net/journal/?p=2888 http://www.bos.com.np/index.php?option=com_content&view=article&id=95:benefits-ofusing-sap-for-your-business&catid=34:articles&Itemid=5 http://www.change-management.com/tutorial-job-roles-mod2.htm http://education-portal.com/academy/lesson/kurt-lewins-force-field-analysis-changemodel.html#lesson https://www.cscollege.gov.sg/Knowledge/Pages/The-Role-of-Leadership-in-OrganisationalTransformation.aspx http://www.bia.ca/articles/chng-managing-resistance.htm http://www.freibergs.com/resources/articles/change/why-people-resist-change/
