Change Management - What is it and why it matters?

Complexity of Change

 According to Wiki, ‘Change management is a structured approach to transitioning individuals, teams, and organisations from a current state to a desired future state.

It is an organisational process aimed at helping employees to accept and embrace changes in their current business environment.’

Such definition of Change Management is often called Organisation Change Management to differentiate from the software change management that refers to software configuration management or project change control that refers to managing the project scope, timeline, and budget.

When we talk about the Organisation Change Management we need to understand who needs to change and who are all the stakeholders that will be affected.

Any change in the organisation involves to various degrees following stakeholders:

• Customers – they experience change in customer service at all touch points, unless change is completely internal (hard to imagine such changes these days!)
• Executive team – they need to formulate the strategy and embrace the change first so they can ‘walk the talk’ and inspire the organisation to internalise the change
• Line management (within an organisation and within partner organisations) – they need to interpret the strategy, define the ‘how to’ plan, and then embrace the change so that they can become effective mentors and coaches and continue to inspire ‘by example’
• Line workers (within an organisation and within partner organisations) – they make the change happen or not; when they are inspired and identify with the change the organisation achieves true transformation

Given the wide reach of change on all levels of stakeholders internally and externally to the organisation, the program that has to be put in place needs to define correctly the scope of the change being introduced and the areas being impacted.

Read more of this article: Business Process Management (BPM) - Change Management - What is it and why it matters?

Are ERP systems still relevant solution in a global market?

When ERP systems started to emerge, 20+ years ago, it was to address a market that had little understanding of a truly global marketplace. It was never intended to address a rapidly expanding dynamic environment. It was built for expansion in a local market not universal growth, as we understand it today.

As far as these early ERP systems were concerned the world was 'flat', or at least it was smaller and easily accessable over the local phone system provider's infrastructure.

Today's global marketplace is just that, a global market where you have to meet greater expectations, be more flexible in your systems and still manage to work within the localised environment applicable to each country. This is no easy task for an organisation and it needs effective tools to support it.

Far too often we come across ERP systems that are creeking and groaning, trying to stretch it's business model to somehow reach out into a real global market when it was developed for a more simpler local environment. One size does not fit all.

Given the major investments made in developing an ERP system you would not expect organisations to throw it out and start from scratch, even if that is what is required. The shareholders and marketplace would not tolerate it. So, instead, most providers either plugged in a 'global module' to the existing system or tried to patch in quasi-global architecture and thus added additional overhead to an already top-heavy system.

At the risk of stating the obvious, neither of these approaches embraces a true global data model, and thus blocks and frustrates any attempt at an accurate worldwide view of business transactions, reporting, forecasting, and all business-as-usual operations. It would appear that you and your organisation are living in a parallel universe, whereby your vision is not being matched by your ERP system.

Shoehorn approach
I am always surprised to discover the number of CEO's and stakeholders who still believe that you can impose an ERP system on an organisation and it will somehow circumnavigate all the internal problems that it faces; the local managers, the cultural difficulties, the silo mentality, the low morale, the lack of profit margins, etc.

The dream being sold to weary executives in the form of ERP systems, is that it will provide the organisation with good business practices overnight and will not only give you back executive control but it will pour calming oil on the somewhat chaotic and troubled waters of an undefined and struggling environment.

The scenario that you can control an un-manageable situation by turbo-charging it and making it operate faster, is more than a little flawed and is the stuff of nightmares. The obvious outcome of this is that you will either shake the operation so violently that it falls apart or you will crash headlong into a metaphorical wall.

The Gambler's Dilemma
The gambler's dilemma is whether to invest more into a loss making situation in the hope of recovering your losses or the more difficult option of cutting your losses and walk away. Unfortunately, too many organisations have experienced this dilemma at first hand and many are still trying hard to either a) dis-engage themselves from their ERP system provider and walk away with some of their honour in tact or c) to continue to justify the unjustifiable, the $Mns spent on a system that hangs like an albatross around your neck.

Conclusion
ERP systems are now seen as a legacy system for a less than global marketplace and should be retired gracefully. We are looking for the next new thing, based on where we are and where we want to go. We do not need parasitic systems that simply draw energ from the organisation simply to maintain the status quo, in the way that ERP systems do.

We are in a truly world-wide marketplace and have been for the last 10+ years. We need systems that will drive and support us in this boundless and boundary-less environment. System that can embrace the global and cultural differences that we encounter as an organisation. These may be multifaceted and will certainly need to be flexible and dynamic, but at the same time they need to be an informed aid to establishing tight control and strong management.

Maslow’s Hierarchy of Enterprise 2.0 ROI Needs

You may be familiar with Maslow's Hierarchy of Needs, a theory Abraham Maslow proposed in 1943, that provides a structure of priorities that relate to human needs. At the bottom of the pyramid are basic physiological needs: breathing, food water, etc.

The fundamentals needed for basic survival. The needs then climb the pyramid, becoming more intangible as one goes along: safety, love/belonging, esteem, self-actualisation, variety.

The theory's structure of moving from tangible/tactical needs to those that are intangible and more impactful is used here to examine the software decision-maker inside modern companies.

Maslow’s Hierarchy of Enterprise 2.0 ROI
The decision to purchase an enterprise software application is one that generally demands a variety of different views about benefits. Because with most enterprise systems - Enterprise 2.0 included - there are a variety of benefits:



Cost Savings
Saving money is one of the easier ways for an enterprise decision-maker to justify an investment.

The savings can more than offset the costs of a enterprise system. This correlates to Maslow's original hierarchy of physiological needs. The dollars saved cover the cost to purchase.

Saving money occurs in multiple ways when it comes to software. While a traditional measure is that the new application replaces a more expensive one, that's a benefit that doesn't scale.
A stronger benefit is one which opens up a pipeline of new cost-cutting and operational efficiency measures.

You've covered the lowest level ROI needs with this one, the benefit that is easiest to see and measure. The importance of this should not be underestimated. However, it's also the benefit with the lowest impact on the organization.

Revenue Generation
Next rung up the ROI hierarchy is creating new revenue. In this case, the benefit is more localized to new products and services, as opposed to entirely markets. Increasing the top line is great for the social software ROI calculation. It's not surprising to see the social CRM space heating up.

Getting ideas from employees and customers that lead to new revenue-generating products is a solid business case for Enterprise 2.0. Employees have ideas, but have lacked effective means of making them known to a wider audience.

Customers have great ideas, and provide great direction for new products. They also love to hear about your new product concepts, and will gladly offer feedback.

The reason revenue generation is above cost-cutting is that there is an increased level of uncertainty as to how the revenue will come about, from which idea. Still, this is a solid level that deeply satisfies the ROI needs of companies.

Customer Satisfaction
Happy customers. What every great company wants and continually works for. Anyone with experience on the "front lines" of a company understands the importance of this. Enterprise 2.0 platforms that help companies find ways to increase customer satisfaction hit on an important need for companies.

Having customers suggest their ideas is a valuable approach to improving products and ideas. With an eye toward higher satisfaction and lower churn.

There's also a new factor emerging: social media. Customers who are unhappy can create publicity problems for companies. Companies should factor in the power that social influence has in total Customer Value.

The other value of engaging customers is that while their ideas may be incremental, there may be patterns companies can pick up in what the customers are proposing. In other words, look beyond the tactical feature or service idea, and see what the customer really wants from your service offering.

This benefit scales well, and is of high value to companies. It does have a softer ROI story, however.

Employee Satisfaction
Enterprise 2.0 has more highly engaged and connected employees at its core. The ability to make a more substantive impact. The ability to find that right person to help with an idea or project.

The aha moments of discovering information you need. Making connections with people who see the possibilities you do. The ability to carve out a basis for recognition more broadly than has been available previously.

All of these relate to the issue of more satisfied employees. Now a social software application cannot on its own get you there. But it can play an important role in making that goal a reality. In Ideas Are Core to Enterprise 2.0, four elements of ideas are identified relating to higher employee engagement:

1. Ideas are me
2. Ideas Are the Basis for Finding Like-Minded Colleagues
3. Ideas Are Social Objects
4. Ideas Become Projects

Now the benefit of employee satisfaction is moving higher up the pyramid. Which means its measurability is limited. But it also means its impact is higher.

Cross-Organisation Collaboration
An important objective of companies to getting employees to work together. It's not enough to have the expertise and experience resident in employees. People need to work together to achieve the various objectives of a company.

Cross-organization collaboration does three things:

1.Improves outcomes as a diversity of knowledge and perspectives are brought to bear
2.Strengthen bonds for the next initiative an employee works on
3.Reduces cases of duplicative efforts and unnecessarily starting from scratch

As has been discussed here previously, people with access to a wider range of viewpoints consistently produce higher quality ideas. That only happens when the full intellectual power of employees can be tapped through collaborative networks.

There is a tremendous opportunity for organisations to help their employees increase the closer ties and extract much more value from those who are more distant, away from one's strong ties. Because for most workers, those distant connections are practically non-existent.

We're getting pretty high up on Maslow's ROI Hierarchy. The previous level of employee satisfaction was more emotional. This level weaves in intellectual benefits as well.

Innovation Culture
Innovations that arise from a social software initiative can be measured; indeed they are the most tangible ROI of Enterprise 2.0.

Ideas that are discovered and turned into action have produce an economic return of business value. Where we are finding it tougher to quantify is, determining improvements in team collaboration, communication, individual productivity and the softer side of enterprise 2.0.

It's harder to measure; how deep is a company's innovation culture? This is a culture where the nine principles of innovation management flourish inside an organisation:

1. Innovation benefits from a range of perspectives
2. Four of the most damaging words an employee can say: "Aww, forget about it".
3. Allow some freedom to try things that don't work
4. Create a culture of constant choices
5. Looking at innovation as a discipline
6. Focus employees' innovation priorities
7. Recognize innovation as a funnel with valuable leaks
8. Establish a common platform for innovation
9. Innovation must be more than purely emergent, disorganised and viral

What is the value of creating a sustainable innovation culture - as opposed to a series of one-off innovations? Recent reports tell us that companies that are the innovation leaders in their industries generate 430 basis points more in shareholder returns than do average companies.

We're talking culture here, so it's a soft ROI discussion but the end-results are quite measurable and powerful for this part of Maslow's ROI Hierarchy. Combined with executive commitment, strong incentives and a can-do attitude, social software becomes a critical tool for helping companies achieve an innovation culture.

Organisational Agility
This is the equivalent of self-actualisation, the top of Maslow's needs hierarchy. Companies that have achieved the other benefits, both hard and soft, will find they have a much higher level of organisational agility. Including:

• Seeing changes in the market faster
• Shifting resources in response to new opportunities
• Mixing incremental and disruptive innovation
• Moving on from initiatives, programs,markets, products that no longer work
• Employees can recognise opportunities and threats themselves, and act accordingly

The Future of IT Project Management Software - Business Technology Leadership

The Future of IT Project Management Software - Business Technology Leadership

Today's information technology organisations are responding to the most treacherous recession in memory. Their actions range from classic belt-tightening to innovating and improving value-added services in their organisations. A primary value-adding strategy for the most effective organisations is to further improve project management.

In view of this strategy, the project management software industry's future looks especially promising. During the global recession, industrial countries around the world devoted billions in economic stimulus funds for infrastructure and other projects. This has created considerable demand for project management software.

Thinking Cautiously about Risk Appetite

How does the current trend for Caution in Risk Management affect business potential?

Because well-considered risk taking is critical to business growth and success, not just for individual companies but also to enable or entitle the expansion of a properly functioning economy.

Food for Thought

Business-to-business lending and borrowing always involves a high degree of risk. Therefore, curtailing that appetite for risk can directly hobble entrepreneurship, deprive deserving businesses of capital, and reinforce deflation.

Take a Positive Stance

Moreover, for any business, the assessment of risk should not dwell on the potentially damaging prospects but also on the opportunities; potential rewards and gains. If you take an overly cautious stance this is more difficult to do or can create a restrictive position.

Although the need for risk taking is recognised by both businesspeople and economists, a lot of this is based on theoretical lip service and rhetoric, rather than real positive and optimistic determinations and outlooks.

Complexity

The complexity of risks in the global economy severely tests many companies, both in their judgment about how much risk to take and in their controls for tracking and managing it. What doesn’t help the situation in any way are sponsors and senior management teams who are not comfortable or practiced at discussing risk in the context of strategic decision making or in articulating those expectations to the organisation.

Positive Solution
To overcome the problem of over cautious risk taking, sponsors, senior managers and companies needs a fresh, more rigorous definition of the appropriate level of risk the organisation can accept or endure. The organisation needs to stress its structure, confirm its strengths and articulate its risk appetite.

Set the Appetite

In addition to asking how much risk to avoid and how much to accept, we need to prepare for the possible downside. Leaders should be setting a better example, by defining how much risk they want and establishing how much capital they are willing to stake against it.

Result Focus

Clearly this is only part of the algorithm, because the result of all this effort is to achieve as much potential and capital gain. The whole organisation should be involved and open to this discussion on risk appetite.

Trading on the edge

Traders and deal makers are at the sharp end of it. They, of all people need to fully understand the risk appetite of the company and the part that their individual deals might have in the corporate-wide performance, because they are the ones that have to implement it effectively.

Unshackle and empower your people, by giving them a clear framework, an appetite for risk and a plan for success.

Internal Audit - CCM and Risk Management

Internal auditors are familiar with walking those fine lines, but championing a "Continuous Controls Monitoring" (CCM) program requires an extra fine sense of balance.

Designing effective controls, especially those aimed at preventing incompetence and financial fraud, is typically defined as an activity performed by company management or business units and, under internal auditing standards, internal audit departments must be seen to be independent from management.

Clearly, that doesn't mean internal auditors don't have a role to play in Continuous Controls Monitoring (CCM). Auditors may not be able to help management design effective cost controls or tell them whether a particular control is the right one to have, but they can help in monitoring the situation.

Auditors are not 'troubleshooters' or management consultants, but they are very capable of testing your controls and processes and providing you with the results. In addition to these results, the auditor should provide some searching questions, which can be fed back into and addressed, in the next management meeting. This is an important feedback loop for management, which should not be under estimated.

The need for strong internal controls is heightened in public and financial companies, because of the Sarbanes-Oxley, Basel II requirements, etc . and external auditors have an equally heightened role to play in testing the soundness of these controls.

In these cases, the management are obliged to design controls to fulfill a regulatory obligation and win accreditation or regulatory approval, verifying the effectiveness of these controls. This verifying audit is required to be carried out by its external auditors, but this will only happen after due diligence and much work has been carried out internally, by the organisation's own audit team.

In reality, internal audit departments, conduct their audits to prevent or to root out fraud and error in high-risk transactional areas. Technology is a powerful double-edged tool, that can be used both for and against an organisation. So, it is vital that internal audit teams maintain tight control of that the tool so that the parameters of the tests don't get changed without their knowledge.

Change and Business Analysis

What makes a good and effective Business Analyst in these days of economic storms, tightened belts and changing political tides.

While strong abilities in communication, collaboration and analysis will always be the mainstays of strong business analysts, our changing technology environment is altering the world in which business analysts commonly work and therefore, their skills have to change in line with this and meet current business requirements.

While a Business Analyst's traditional skill set is still king, those decidedly non-technical leadership, communication and business-process understanding traits, the changes in software delivery methods have altered what business analysts need to offer right now.

The Rise of Agile Methodologies and Lean Concepts
It's the end of traditional software delivery as we know it, thanks to Agile and Lean. A recent survey found that 41 percent of respondents are using Agile techniques and 10 percent are exposed to Lean concepts.

Organisations are planning and implementing new, lighter-weight software delivery processes on a large scale, and this is largely changing the world of the business analysts. The BA's need to stay up to date with recent approaches and changes in methodologies, understand the subtle changes to their roles, and modify their practices accordingly.

Agile Approaches Change the Business Analyst Role
Requirements look very different in an Agile project than they do in a traditional waterfall endeavour. With Agile, the team typically describes requirements at a high level early on in the process and only elaborates on them when it's time to implement them.

The team uses different artifacts such as user stories, and the requirements definition process is much more collaborative and iterative.

Agile Methodologies

With an increase in the adoption of Agile methodologies inside businesses today, BAs need to understand what's changed and what's different in the methodologies so that they can help guide the transformation of their role and practices.

If their CIOs and business-unit leaders aren't already adapting the business analyst role to new software delivery methods and process changes, then the BAs might need to do it themselves.

Cross-Functional Knowledge

Business analysts need to obtain cross-functional knowledge and experience by being exposed to new technologies and different business units. Cross-training in project management, software development and quality assurance would help.

As with most roles in technology, it's never safe to rely on the skills you already possess. Effective business analysts are constantly seeking to improve their core skills and staying up to date with technology changes to add the most value to their organisation.

Bad Dreams, Nightmares and ERP Systems

I had the good fortune this week to be invited to the inner sanctum of the European Commission offices in Luxembourg. If it is not the famed 'Emerald City' of the European Community, then it is certainly a semi-precious substitute.

The offices themselves are tired, uncomfortable and functional, at best, lacking the sparkle and seductiveness of modern commercial enterprises and high-tech locations. There was a definite feeling of stepping back into Eastern Europe under the Communist regime.

Legacy mud baths
My hosts were very keen to distance themselves from the environment and the legacy 'systems' that they had inherited. They were seeking a rapid improvement in their physical situation and in their technological environment and that was why I was there. To help pull them from the clawing and energy sapping mud of stale and redundant legacy systems.

The offshore island of Luxembourg
Luxembourg is an island of prosperity in the vast ocean of unemployment and economic doldrums of France, Germany and Belgium, that surround it. It is the great white hope of some 120,000 people from these other nations that commute daily to work there. Beware of peak time traffic jams at the borders.

This does not take into account those that travel from much further afield, living in hotels for most of the week and travelling home on weekends. Expanding the catchment area into the UK, Spain, Italy and Eastern Europe.

My brief but interesting meeting with the technological worker gnomes of the Commission was both enlightening and concerning. The fear of legacy systems seemed out of all proportion to their overall threat and effect, a bit like the extreme measures that the UK government is currently taking against the H1N1 virus outbreak.

Bad Dreams and Software Solutions

The urgency with which these issues are driving the tactics, has more to do with political pressures than sound economic strategy. The pressure to appear active and 'moving' on the issues far out-strips the effectiveness of the results achieved. Never mistake 'movement' for 'action', or 'tactics' for 'strategy', they are completely different entities.

The headlong rush to implement a 'tool' that will absolve and absorb the responsibility for good management, is the 'holy grail' of all government bodies and corporation managers. This makes them very vulnerable and accomodating to the consultants' pitch to sell ERP system solutions, an SAP or a Tivoli, snake-oil software that will 'assume' command of the enterprise and take all your problems away.

Unfortunately, although ERP systems are sold as 'solutions' by 'solution providers', this is a 'misnomer', an elegant piece of marketing. An ERP system will not solve your problems but they will capture most of them in the one location, inside the ERP system itself. Does this help you?

'A fool with a tool, is still a fool'.

Operational Legacy systems
There are a number of reasons why a 'legacy' system remains operational; a) the management has not addressed the impact of the structural issues surrounding it, b) it is still economically viable and change cannot be justified on the grounds of a good Business Case and ROI, c) the outlay and investment in the original system has not been 'realised'.

a) The structural issues will not be resolved by shoe-horning a round-pegged ERP system into a square-wholed enterprise. Bite the bullet and address the structure first. In this way you have greater chance of success, by overlaying and mapping a new ERP system into an organisation, rather than inflicting one.

b) Unjustifiable ROI and Business Case. Do the maths, and if this is the correct answer, stick with it. Stand firm. Do not go back and change the question to fit the consultants' solution. This way monsters lie!

c) If the outlay and investment in the original system has not been 'realised' then loading another burden on top, with additional gearing, will also not work.

Who is the Villain here?

Rememeber that, although today your system is shiny and new, another year or so down the road you will have to face the withering criticism as to why your latest ERP 'rocket-to-the-moon' system is now overloaded, running out of power and falling back to Earth. Preparing to take its place as your biggest ever obsolete 'legacy' system.

'I have a garage full of tools to repair my car. Now, if only I knew why it wasn't working!'

Do not skimp on replacing old laptops

Your Business may not survive it!
Not replacing laptops can prove very costly. You will need additional service cover against losses and breakdowns, because the warranties have expired, not to mention the lost productivity in using a three year old model. Keep your laptops up to date and in the new budget. If there are cuts to be made then this not the time or the place.

Companies are trying to cope with reduced IT budgets and are postponing the purchase of new laptop computers but they are making a big mistake.

Extending the use of laptops two years beyond the traditional three-year lifetime cost companies an average of $/Euros 1,050 per machine, more than the initial replacement cost.

The additional costs will include a hype in repair costs simply due to old age, normal wear and tear and the end of three-year warranty periods.

For each laptop user that is using the outdated equipment, it costs the company about $/Euros 9,600 in lost worker productivity over the two-year period.

Many companies are keeping a tight control over new purchases because of the recession. Some forward-thinking companies have taken the more positive step of replacing some user laptops with less expensive smartphones or other handheld devices. Such devices can be far more cost-effective for users who are only using laptops to access e-mail.

The replacement of corporate laptops with mobile devices should grow significantly over the next decade. In fact, it is predicted that in less than 10 years, the majority of Internet users will be accessing the Internet via a mobile device instead of a laptop or desktop.

Mobile devices are now being seen as mission critical but organisations are not quite at the point where they are completely confident about replacing laptops with smartphones. They are looking seriously at it and planning to research the potential gains in efficiency.