ASSIGNMENT ON STRATEGIC
CHANGE
MANAGEMENT
COURSE CODE: GOTXH04 GROUP D
SUBMITTED BY ASHISH KUMAR MISHRA 1270394
TO THE SCHOOL OF FINANCE AND PROFESSIONAL STUDIES
IN
PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMENT STUDIES (PGDMS).
COURSE LECTURER UADE ALUPKE DATE: 29/11/2010
Abstract This report is study of implementing Enterprise Resource Planning product in Corning India and the strategic changes involved. We will be discussing the need n eed and the factors driving the change along with the resource implications of not responding to change. We will be mentioning the different models of change and its relevance to the current economic situation. Strategy to involve stakeholders in the change management planning and to deal with resistance will also be discussed. In the end of the report we will be mentioning about change models and the implementation method in the organisation and the measures to monitor the progress of change process.
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Table of Content
1. Introducti Introduction on --------------------------------------------------------------------------------------------------- 4 2. Object Objective ive ------------------------------------------------------------------------------------------------------4 3. Need for strategi strategic c Change ----------------------------------------------------------------------------------5 3.1Factors driving the need for change ----------------------------------------------------------------5 3.2Resource implications of not responding to change --------------------------------------------5-6 4. Models Models of strategic strategic change change --------------------------------------------------------------------------------6-10 4.1Relevance of models of strategic change to organisations -----------------------------------10 4.2strategic intervention techniques in organisations ---------------------------------------------11 5. Systems to involve stakeholders in the planning planning of change ----------------------------------------11-12 5.1Change management strategy with stakeholders ------------------------------------------------12-13 5.2Evaluation the systems used to involve stakeholders -------------------------------------------13 5.3Strategy for managing resistance to change ------------------------------------------- -----------13-14 6. Model for change----------change----------------------------------------------------------------------------------------------------14 6.1Plan to implement a model for change --------------------------------------------------------------14-15 6.2Measures to monitor progress ------------------------------------------------------------------------15 Strategic Change management
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7. Conclusions --------------------------------------------------------------------------------------------------------16 8. References ---------------------------------------------------------------------------------------------------------16-17
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Introduction Corning Incorporated is the world leader in specialty glass and ceramics. Corning’s operations in India are represented by Corning S.A.S India branch office. Corning India implemented Scala 5.1 ERP in year 2000.Now, the business operations of organisation has grown and so its complications. Corning hired new staff and at technology end their requirements started growing, which are not fulfilled by the Current ERP.As an ERP Consultant of Sonata Software Software Ltd.(From July 2007 to Aug 2010) , we did the business process study and suggested corning India to go for a new ERP, which can fulfill their growing business needs. Implementing an ERP is always a strategic change process, and it involves all the stakeholders. In this report, we have not only studied the needs for bringing change but have also studied the various aspects of the processes which are involved in change management. We have suggested strategic plan to involve the stakeholders and to handle the resistance .We also mentioned the implementation plan and the measures to monitor the progress of the project.
Objective The study of the Implementing Enterprise Resource Planning in Corning India, and the strategies involved to handle this change management process.
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Planning & Implementing the Change 3. Need for strategic change
Corning India implemented Scala 5.1 ERP in 2000, to automate their business processes of finance and logistics .As the business grew, the company started diversifying its business by entering into new product and market segments. The available IT system is not in position to deliver the growing needs of business. The Scala5.1 ERP has a very small base in India and henceforth there are not easily available resources that can provide support on the product. The principal company which acquired Scala, i.e. Epicor has now phased out Scala 5.1 and has started marketing their new products iscala 2.2 & 2.3 respectively. Currently, there are certain issues with the management related with the IT ,which cannot be solved with the current ERP, for example import of sales order& purchase order in the system, detailed description and classification of new products to name a few. It is becoming more time consuming to enter the daily transactions and entries in the system than the manual process and henceforth delaying the month end closing process of the company, which in turn effecting the reporting processes.
3.1 Factors that are driving the need for strategic
There are various new ERP versions with totally new functionalities available in the Indian market. These products have vast resource pools and are available at a reasonable price. The product companies are offering a wider range of services which are not available in Scala 5.1. Corning is big MNC and they have IT compliance issues, which is also one of the major reasons for planning of new ERP. The new ERP products available in market deliver wide range of functionalities and are highly scalable. They can meet the demands of future business needs as well. The current ERPs (SAP all in one, Oracle e-business suite R12) available in market have the functionalities for the current issues. The company has to depend on the freelance consultants in case of any Scala issues, which in turn becoming more time consuming and expensive. By implementing new ERP, corning will get specialized resources to help their business and also yearly support. The competitors of corning are using more specialized and latest ERP system, so it is also effecting the decisions to go for a new ERP. 3.2 Resource Implications of not responding to change
There will be great implications on the corning business and operations if the resources don’t responding to the planned change. The resources involved in this change are the business heads, the core implementation team, the end users and Strategic Change management
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the IT infrastructure that includes both hardware and software. The implications will be as follows:
Lack of IT infrastructure, will cause difficulty in taking the implementation forward and may ultimately become the cause of failure
If the business head doesn’t involve fully in the decision making, then the implementation period will stretch and it will not be able to meet the deadlines and the go live period.
If the core team members of the implementation team are not fully dedicated then it will become difficult for the external consultants to map the business processes on the system. It may also result in some wrong map, which in turn will cause issues for the business after going live.
If the end users don’t take the proper training, then they will not be able to complete their daily task on time without any issues. They may also enter wrong entries, which will further complicate the business processes.
If the transactions are not entered by the end users properly then it will cause problem in the month end closing process, resulting in late reporting.
Organisation will lose business because of late responses from the end users.
Organisation will face issues with the auditors, as it will become difficult and time consuming to find solution for wrong transactions
Failure of implementation will cost a high capital loss to organisation
4. Models of strategic change Kolb’s Model of Individual Change
In 1984 Kolb published his learning styles model. Kolb’s model of learning styles has h as four distinct learning styles which are further based on four stage learning cycles also known as learning cycles. Knowing a person's learning style allows learning to be orientated according to one’s preferred method. The brief description of Kolb’s model is as follows: •
Diverging (Feeling and watching): People with diverging styles are sensitive and they prefer to watch rather than to do. They have broad cultural interests and tend to work in groups , to listen with open mind and are usually imaginative and emotional.
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Assimilating (watching and thinking): They are the people with logical approach and concise and give more importance to ideas and concept than
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people. They are the one who excel at understanding wide-ranging information and organizing it a clear logical format.
Converging (doing and thinking) : these kind of people are interested in technical tasks than in people and interpersonal aspects. They tend to solve issues based on their past experience and learning. People with a Converging style like to experiment with new ne w ideas, to simulate, and to work with practical applications. •
Accommodating (doing and feeling): these people don’t work on logical analysis but believe on their intuitions. They tend to rely on others information and then carry out their own analysis. They work in teams and actively try out new ways to achieve the objective.
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Kotter’s 8 –Step Organisation Change Model
A professor at Harvard Business School, John P. Kotter suggested eight steps of change model in an organisation. They are as follows: •
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Create urgency: To spark the initial motivation to get the change moving, urgency needs to be created. This happens by identifying the potential threats and developing a future scenario. Form a powerful coalition: to lead a change, all the influential people, the team and the management need to be convinced and a coalition is to be formed. Create a vision for change: defining a clear vision helps people to understand the objective of the change and it gives them motivation as they know what they are trying to achieve. Communicate the vision: By communicating with the key person and every stakeholder of an organisation honestly about the vision, a momentum is being created to achieve that Change. Remove obstacles: if any structure or processes is becoming problem for the change then define a strategy to remove those barriers. Clearing obstacles can empower the people who are required to execute the vision of change. Create short term wins: Short term targets need to be created, as success of achieving these short targets will keep the team and people motivated to keep the momentum for the required change. Build on the change: Kotter argued that most of the change fails as success is declared too early. With every success a new plan and strategy to be formulated to continue that success and the area of improvements. Anchor the changes in corporate culture: Continuous effort need to be ensured to keep the change in every aspect of the organisation. The change should be brought in the corporate culture and should often be discussed and talked about by the leaders in the organisation.
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Source: http://www.dudleyconsulting-inc.c http://www.dudleyconsulting-inc.com/changemgtmodel.html om/changemgtmodel.html Tuckman’s model of team change
Dr. Bruce Tuckman published his four stage model of team change in 1965.It consists of: •
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Forming: This is a stage where the whole responsibility of change lies on the leader, as individual roles and responsibilities are unclear and team members are highly dependent on leader for guidance and direction. Storming: In a team decisions does not come easily in start. Every member seeks a position in team with respect to other members and leader in order to avoid challenges later. This is very important part of the processes as this defines and enables common understanding of purpose and roles to be achieved.
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Source: http://www.infed.org/thinkers/tuckman.htm •
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Norming: During this phase agreement and consensus is largely formed among the team. Roles and responsibilities r esponsibilities are clear and accepted. The major decisions are taken by team discussions and agreement. Performing: This is the final stage of team development. The roles are clear now and team knows clearly about the vision and the goal they are working upon. The team works in a collective and mature manner to achieve the goal.
4.1 Evaluation Evaluation of change change manageme management nt models models in the current economic economic scenario
As it’s mentioned in kotter’s model that a change should be taken as process. It starts with creating urgency in the organisation and forming a clear vision which incorporates the goals and objectives. By properly communicating the vision and taki taking ng ever every y memb member er of the the orga organi nisa sati tion on in confi confide denc nce e the the chan change ge proc proces ess s becomes more viable and feasible. As corning is planning to implement a new ERP, it requires a complete planning at the organisation level, since this change is going to impac impactt overal overalll organi organisat sation ion.. Everyo Everyone ne in the organi organisat sation ion will will be direct directly ly or indi indire rect ctly ly relat related ed or affe affect cted ed by this this chan change ge.. So a clea clearr visi vision on need needs s to be communicated among staff and management. A proper planning has to be done to remove the expected obstacles and a strategy needs to be formulated. The change shou should ld be plan planne ned d in a stag stage e wise wise form format at with with short short term term goal goals s to ke keep ep the the motivation of staff alive. And with every success a new plan should be formulated to take that change ahead. While discussing about organizational change model, we can’t give less importance to team team mode modell and and the the indi indivi vidu dual al ones ones.. As it’s it’s the the team team whic which h init initia iate tes s and and facilitates the change in an organisation, so it has a major relevance, because if the team team does doesn’ n’tt work work and and fail fails s in its its proj projec ectt then then the the chan change ge can’ can’tt reac reach h at an organizational level and hence causing failure of change process. We should also Strategic Change management
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consider the individual model of change as well, as the change is successful when it ever every y indi indivi vidu dual al acce accept pts s the the chan change ge and and chan change ges s acco accord rding ingly ly.. So in toda today’ y’s s scenario organisation has to take into account all these three models of change while deciding the strategic change. 4.2 Assessment of Strategic Intervention Techniques in organisation
Strategic intervention techniques helps organisation to find their own core of strengths and is helpful doing the process of change. Organisations need to be changing conscious and henceforth they need to develop human resource techniques to involve everyone and prepare them for the change. By adopting strategic intervention techniques model, organisations can build bridges of su ccess and advancement with all workers cooperating as team mates as well the managers. Some of the organisation development Intervention techniques are: •
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Role playing: It is basically a contingency plan to prepare a group in absence of the superior or the other team mates. Role playing is a prescribed way of behaving. Team Development: It is regarded as the very foundation of developing work group maturity and effectiveness. Setting goals, priorities and to examine the relationship between among the people doing work are few of the objectives of team development. Survey feedback: Nadler (1997) argued that recipients must see feedbacks as a stimulus for action rather than final statement. Information should be gathered by personal interviews or survey questionnaires and should be analyzed and be used effectively. Inter group problem solving: Joint meetings should be held regularly to avoid inter group conflicts. During such meetings members are allowed to speak and discuss freely and sort out their differences. Process Consultation: The process involved should sh ould be thoroughly discussed and consulted with every party concerned with. It is generally done to end the conflicts among different teams and people involved and to prepare them for the change.
5. Strategy to involve stakeholders stakeholders in planning the change
As corning need to do implement a new ERP, so a proper strategy has to be planned to involve all the stakeholders of this project. The Stake holders are: •
IT director and team
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Finance head and team
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Procurement head and team
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Sales head and team
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Supply chain management head and team, including warehouse team
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Admin team
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Managing Director
The activities which need to be undertaken to involve these stake holders in planning change are: •
Devising a communication strategy strategy which includes includes : Meetings, Emailing, Face to face interaction, interview, Voting and Questionnaire
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Send formal invitation to all the top management involving all the business heads for the meeting on the discussion of bringing strategic change in organisation. Formal presentation to the major stakeholders on the needs and factors for bringing the change in organisation. Prepare the minutes of meeting and forward it to all the members, requesting for their feedbacks. Once feedbacks are received, plan a strategy resolve the issues raised and convince them for the need of change. A formal team needs to be formed and a change leader should be chosen to initiate the change. The team should have members representing different business processes.
5.1 Developing a change management strategy with the Stakeholders
A widely accepted theory of management suggests that, within a group individual behavior and emotional responses to a given circumstances are different from each others. Similarly responses to organizational changes are different, some are early adopters and majority of the stakeholders are reluctant to accept the change while there always some who are resistant to change.
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Keeping these stakeholders in consideration, a strategy needs to be formulated. We are considering common accepted strategies of management, they are as follows: •
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Leverage Strategies: This is generally applied to the early adopters with significant influence to develop their support and utilize u tilize their influence to accelerate the change among the reluctant majority. Engagement strategies: The focus is on the influencers of the reluctant majority and the goal is to convert them to early adopters and is leverage their influence among those with less interest and commitments Containment strategies: These strategies are basically to target those resistant laggards who are unable to adapt yet because of their high skills, knowledge and abilities they still contribute to the change. Outplacement Strategies: The virulent and influential resistant laggards are prime candidates for outplacement. These stakeholders are given an early opportunity to demonstrate their acceptance and compliance with the change process but, failing that, they face unambiguous consequences.
5.2 Evaluation of the systems used to involve stakeholders in the planning of change
As we see, implementing an ERP involves the top management and also the end users, so a proper strategy needs to be formed to involve everyone in the change process. Change process can initiate only if the stakeholders are well communicated and educated about the necessities of bringing the change. They should be well informed, educated and be engaged in the decision making. Their feedbacks should always be taken in account, and all this can be possible only by devising a proper communication strategy. Every stakeholder involved should always be kept in loop on the progress of the project. Stakeholders should always be invited when a key decision need to be taken. Acceptance of their feedbacks makes them feel motivated and engaged and then they become the part of the project. Presentation to the stakeholders should always be given on the current and accurate information to keep them updated and to avoid the thoughts by them of being neglected. 5.3 Strategy for managing resistance to change
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Resistance to change is part of change process. It is something which can have both positive as well negative impacts on the organisation. Kotter & Schlesinger (1979) explained the importance of strategy to handle the resistance in the organisation. As per their theory, the principles are: •
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Education and Communication: By properly educating and communicating with the concerned stake holders about the change, their misconceptions and confusions can be sorted out without which they are full of questions and worries. People tend to accept the change once they become aware of the change. Participation and involvement: A strategy need to be devised to facilitate the participation and the involvement of the stakeholders in the change process. This gives them motivation and sense of involvement makes them feel part of the change to which they don’t try to become a resistance. Negotiation and agreement: When an organisation goes for a strategic change, then lots of things are at stake. And it becomes equally important to move towards change by forming an agreement among all the members and the management through proper negotiations. Facilitation and support: By facilitating and supporting the people who are initiating and managing the change process, the motivation level of people are increased and boosts their confidence which in turn becomes example for others as well to be a part of change and taking it forward.
6. Change Model to implement the ERP in the Organisation
To implement the ERP in corning, we are using the change management theory given by Pettigrew and Whipp. The Five main factors of change which we are considering are: 1. Environmenta Environmentall Assessment: Assessment: Corning Corning needs to define define continuous continuous monitoring monitoring of both the internal and external factors of organisation 2. Human resources resources as assets assets and liabili liabilities: ties: Employee Employees s should know know that they are seen as valuable and organisation trusts the. 3. Linking Linking strategic strategic and operational operational change change :Building :Building of operation operation activities activities can can lead to new strategic strategic changes 4. Leading Leading the change: change: By creating creating the right right climate climate for for change and and by setting setting agenda not only for the direction of change but also for the vision and values. 5. Overall Overall coherence: coherence: A change change strategy strategy should should be consistent consistent and and provide provide a competitive edge. Strategic Change management
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Corning should devise an implementation plan of ERP, by incorporating these five factors of change. 6.1 Implementation Plan
If the implementation of the change model is not well planned then the change will always jeopardize in between and will result in failure. We are considering a widely accepted change implementation plan suggested by Johnson, scholes and Whittington. The steps are as follows: •
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To gain support of key decision makers and facilitators by educating them about the planned change Make a full detailed plan with schedules and stages of the change process, agreed by all the business managers and the decision makers
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Plan to obtain staff’s commitment to making the strategic plan work
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Involving the end users in the ownership of the plan
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Rewarding the end users on plan’s success
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Train the staff and develop new skills which will contribute to the effective implementation of plan
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By keeping check on and record the process
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Evaluating the change at different stages
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Studying the weak areas and improving them in specified time
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Monitoring and reviewing the process on weekly and monthly basis.
6.2 Measures to monitor progress
Monitoring progress of change process is important as it measures the activities and performances related to it. The progress can be monitored by devising various performance metrics and systems, which will measure the success of organisation towards achieving the goal. We are suggesting su ggesting some of the widely accepted Performance measurement systems to monitor the progress, these are: Balance scorecard: it’s a performance management approach that focus on various overall performance indicators, often including customer perspective, internal-business processes, learning and growth and financials, to monitor progress toward organization's strategic goals.
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basica call lly y look looking ing outs outsid ide e the the orga organi nisa sati tion on to Benchmarking : It is basi examine how others achieve their performance level and to understand the
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•
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processes processes involved. involved. Benchmarking Benchmarking facilitat facilitate e improved improved performanc performance e within within the the orga organi nisa sati tion on and and the the ke key y busi busine ness ss proc proces esse ses. s. T The he obje object ctiv ive e of benchmarking is to ideally understand and evaluate the current position of a business in relation to "best practice" and to identify areas and means of performance improvement. Reviews Reviews and evaluation evaluations s: By setting up model of weekly and monthly revi review ews s of the the proc process ess,, to ke keep ep an eye eye on the status status of the the prog progre ress ss.. Evalu Evaluat atio ion n will will help help to find find out out the we weak aknes nesse ses s or the the stre streng ngth ths s of the the project. 180 and 360 degree feedback : By setting up this model of feedback for the individuals and the team, management will be able to get the actual perf perfor orma manc nce e and and effo effort rts s of ea each ch and and ever every y reso resourc urce e invo involv lved ed with with the the project. Setting up Milestones: Milestones of projects are generally set to keep a track on the progress of the project.
Conclusion Bringing Strategic change in an organisation has to be a well planned process. The change can only be successful if all the elements of the change process are considered which involves the stakeholders in the planning process and also strategies to handle the resistance. A well thought and implementation process should be evolved with proper measures to monitor the progress of the change process which is ERP implementation here.
References
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