Providian Trust Case: Project Management and Organizational Change

1. Providian Trust Case:Project Management and Organizational Change BA 652 Fall 2008

2. Agenda • Announcement – Next Thursday • A3 reports of Access Plus Implementation • Review of Facts of the Case • Project Management Issues • Business Process Change Issues • Current Situation • Characteristics of Successful Change

3. Next Thursday – Guest Speaker • Brian Blue • 1970 Economics Major from NAU CBA • Worked at Macy’s from 1971 until 2007 • Retired as Macy’s Group Vice President • He has done a number of implementations of the type we have been reading about in our cases. • His resume is in your email this morning. • Assignment: Develop two questions for him after looking at his resume. Due Wed.

4. Team Plans for 90 day Delay in Access Plus Implementation • Team 2 • Team 1

5. Project Facts • Size • Implement of Access Plus by Select One • 18 mil start 1993 (12 mil spent by 5/1995) • Organization • Steering Committee (LeBlanc VP Trust & Inv) • Implementation Committee (LeBlanc) • Project Team (Todd Benari VP Trust Operations) Back Office Dominant

6. Project Facts • Project Impacts • Purpose • Increase customer service • Centralize financial/statement/client administration • Reduce workforce by 180 FTE • Process Changes • Move client control to back office • Transform trust managers to client relations • Software precondition to process changes

7. How does Access Plus fit with Providian’s Business and Organizational Strategies? Business Strategy Information Strategy Organizational Strategy

8. Project Management Issues • What did you identify as the most critical shortcomings of Providian in managing this project?

9. A Project Management View • Why do 84% of IS projects fail or don’t meet original expectations? • Lack of clear system requirements • Lack of User involvement • Lack of management or executive support • Lack of thorough and detailed project plan • Unrealistic estimates about cost of schedule

10. Project Management Issues • Are there current problems with the organizational structure of the project? • Are all aspects of the organization represented on committees and analysis teams? • What is the level of executive support from Walsh? • Are there issues with the HR job selection process? • Do issues exist with composition and delivery of training? • What level of formality should exist in project processes?

11. Project Management Issues • Project Organization • Insufficient representation of “front office” personnel on Steering, Implementation, and project team. • Dysfunctional Steering committee • Lack of executive support from Walsh • Project Processes • Lack of user involvement from client services • HR screening and selection of new work force flawed • Trust officers not included in SWE • Training not offered just-in-time with equipment in place

12. Project Management Formality

13. Resistance to Change:Employees resent and resist change when: • The purpose is not made clear • They are not involved in the planning • The appeal for acceptance is based on personal reasons • Habit patterns of the work group are ignored • There are poor communications regarding the change • There is fear of failure • Excessive work pressure is involved • The cost is too high or reward is too low • The present situation seems satisfactory Source: Industrial Management, March, 1966

14. Business Process Change Issues • How will the delivery of client services change at Providian after the system implementation? • How has the job role and associated skills changed for the trust officer? • Will clients be treated differently under the new system? If so how will this affect their loyalty to Providian?

15. Business Process Change Issues • Organizational Process Impacts • Transfer client control from personal trust officer to “back office” • Trust officers must get computer literacy • Trust officer new role as relations manager only • Access Plus a precondition of process change • Mass elimination of workforce (180 FTE) • Training centers cause self-learning of new skills • High morale and stress problems • Overall lack of business process change analysis • Client Relations Impacts • Loss of client management from trust officer • Loss of customization/personalization of information • Retrain to new statements and administration procedures

16. Tactics for Dealing with Resistance to Change • Education and Communication • Participation • Facilitation and Support • Negotiation • Manipulation and Cooptation • Coercion Source: Robbins, Organization Theory

17. Elements Most Effected Change Change Change Deci-sion Rights Control Organization Pro-cesses Data People, Information& Technology Change Formal struc-ture Planning Organizational Effectiveness Strategy Infor. Net-works Perf. Meas/ Evalu-ation Change Values Incen-tives & Rew. Change Change Culture

18. Characteristics of Successful Changes • Relative advantage • Is the change perceived as better than the old way or state of being? • Compatibility • Is the change consistent with the existing values and needs of the organization and the clients?

19. Characteristics of Successful Changes II • Complexity • Is the change considered convenient, easy to use, and easy to understand? • Trialability • Can the change be experimented with on a limited basis (such as a demonstration project or limited roll-out)?

20. Characteristics of Successful Changes III • Observability • Are the benefits of the change clearly visible to organization members and clients? • Reasonable risk • Are changes perceived as too risky in any dimension?

21. Characteristics ofSuccessful Changes IV • Perceived risk dimensions • Functional – May not perform • Financial – May cost too much • Physical – May be harmful • Psychological – May not meet “self – concept needs” • Social – May cause social problems

22. Next Time • Readings • Pearlson and Saunders, Chapter 5 • Vandalay Case • Assignment • Group Assignment:  Prepare an A3 report and a set of power point slides that identifies the key issue that must be addressed to make the ERP implementation successful and lays out a plan for the remainder of the implementation process.