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Why the need for change Consultant’s Approach to OCM How OCM fits into the picture What is OCM Workplan and Deliverables

Organizational Change Management. Why the need for change Consultant’s Approach to OCM How OCM fits into the picture What is OCM Workplan and Deliverables for the OCM project Looking into the future. Presentation Objectives. Introduce Concept of Change Management

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Why the need for change Consultant’s Approach to OCM How OCM fits into the picture What is OCM Workplan and Deliverables

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  1. Organizational Change Management • Why the need for change • Consultant’s Approach to OCM • How OCM fits into the picture • What is OCM • Workplan and Deliverables for the OCM project • Looking into the future

  2. Presentation Objectives • Introduce Concept of Change Management • Outline key aspects of Consultant’s Organisational Change Management (OCM) approach • Demonstrate how Consultant’s OCM approach will add value by supporting the broader MIS upgrade • Confirm the project scope for the OCM project • Agree on key deliverables for Phase 1 (expected completion - March)

  3. Why the need for change? PRESSURE FROM WTO TO LIBERALISE FINANCIAL MARKETS COMPETITION FROM MORE ESTABLISHED COMMERCIAL BANKS BANK NEGARA REQUIREMENTS CHANGES IN CUSTOMER NEEDS, DIRECT BANKING AND INTERNET BANKING “When the rate of change outside exceeds the rate of change inside, the end is in sight” John F. Welch, Jr. Chairman / CEO General Electric Co.

  4. Consultant’s Approach to OCM • Centralisation of IT infrastructure • Reduce duplication • Increase processing response times • Reduce IT maintenance costs • Adoption of Best Practice banking Process PRESSURE FROM WTO TO LIBERALISE FINANCIAL MARKETS COMPETITION FROM MORE ESTABLISED COMMERCIAL BANK CHANGES IN CUSTOMER NEEDS, DIRECT BANKING AND INTERNET BANKING BANK NEGARA’S REQUIREMENTS

  5. Consultant’s Approach to OCM • Centralisation of IT infrastructure • Reduce duplication • Increase processing response times • Reduce IT maintenance costs • Adoption of Best Practice banking • Direct Banking • RBS, Financial & Treasury (Phase 1) • Remittances, ATMs • Internet Banking Process Technology PRESSURE FROM WTO TO LIBERALISE FINANCIAL MARKETS COMPETITION FROM MORE ESTABLISED COMMERCIAL BANK CHANGES IN CUSTOMER NEEDS, DIRECT BANKING AND INTERNET BANKING BANK NEGARA’S REQUIREMENTS

  6. Consultant’s Approach to OCM? • Centralisation of IT infrastructure • Reduce duplication • Increase processing response times • Reduce IT maintenance costs • Adoption of Best Practice banking • Resilience to change • Commitment to change • Greater skills and competencies • Direct Banking • RBS, Financial & Treasury (Phase 1) • Remittances, ATMs • Internet Banking Process Technology People PRESSURE FROM WTO TO LIBERALISE FINANCIAL MARKETS COMPETITION FROM MORE ESTABLISED COMMERCIAL BANK CHANGES IN CUSTOMER NEEDS, DIRECT BANKING AND INTERNET BANKING BANK NEGARA’S REQUIREMENTS

  7. How does OCM fit into the Picture? PROGRAMME MANAGEMENT OFFICE Analysis, Customisation & Data Conversion IT INFRASTRUCT FUTURE IT ENVIRONMENT RETAIL BANK - Analysis & Customisation FINANCIAL SYSTEMS TREASURY EXEC INFO SYSTEM RETAIL BANK - Data Conversion TRAINING & DOCUMENTATION USER ACCEPTANCE TESTING DEPLOYMENT ORGANISATIONAL CHANGE MANAGEMENT

  8. Benefits of this approach • Integration with the PMO and all initiatives associated with the MIS Upgrade Project • Greater understanding of dependencies between projects • Greater understanding of the technology and process impact • Structured and objective approach to analysis / diagnosis • Greater co-ordination of resources

  9. What is Organisation Change Management? A structured approach that helps manage the people components during a business transformation initiative to realise the desired outcomes Focus Outcome • Change Readiness Acceleration • Change Leadership Development • Performance Lever Gap Analysis • Stakeholder Involvement Strategies • Culture and Values Alignment • Transition Planning and Management • Team Development • Organisational Learning • Clear and Compelling Business Casefor the Change • Engaged, Skilled Change Leaders and Sponsors • Accelerated Change Readiness • Flexible and Adaptive Workforce • Leverage Learning Capability

  10. Cell Impact on Desired Business Objectives I Failure II Failure III Failure IV Success Why the need for Change Management? SOLUTION IDENTIFICATION WRONG RIGHT II III INEFFECTIVE 10% of occurrences 70% of occurrences SOLUTION IMPLEMENTATION I IV EFFECTIVE 10% of occurrences 10% of occurrences The value of MIS Upgrade Project is realised only through successful implementation

  11. Why efforts fail PERCEPTION MANAGEMENT OF CHANGE TECHNOLOGY INFRASTRUCTURE

  12. Why efforts fail PERCEPTION REALITY MANAGEMENT OF CHANGE INFRASTRUCTURE TECHNOLOGY

  13. Commitment versus Compliance • Commitment building costs are significantly less than the cost of: • managing post-implementation resistance • compromised implementation efforts • project failure Pay now... or pay later?

  14. Commitment versus Compliance • Commitment is a powerful phenomenon in transition management • Commitment generates productive behaviour without the need for monitoring • Compliance may result in similar behaviour, but rarely generates initiative. Compliance strategies rely on external enforcement

  15. Detailed Workplan Proposed Approach to Organisational Change Management Phase 1

  16. Change Readiness Assessment What Identifies key factors which may help or hinder the change process and is used to determine BIMB’s readiness to change. Action plans can then be developed to leverage strengths and minimise potential risks. How A series of one day workshops delivered to a select number of staff representing identified stakeholder groups. Surveys and other tools will be used to identify potential risks to MIS implementation. Benefit • Action plans to address implementation issues • Greater ownership and awareness of MIS Upgrade Project • Structured approach to identify potential implementation risks • Consistent application of E&Y world-wide OCM tools • Objective methods to determine potential implementation risks • Involvement of stakeholder groups throughout Bank • Comparison of perceived risks across management levels and locations • Comparison of perceived risks over time Value of Approach

  17. Change Readiness Assessment Implementation Factors for Success... Powerful Business Case AlignedPerformance& Culture Integrated Planning & Teams VisionClarity Change Leadership & Accountability Increased Change Capability Change Specific Communication Stakeholder Commitment

  18. Communications Strategy and Plan What Determines the strategies, goals, themes, messages and vehicles used to communicate with key stakeholders (internal and external) throughout the duration of the MIS Upgrade Project. How Working directly with Project Teams and Task Force staff, drawing on the results of the Change Readiness Assessment and using Consultant’s methods to identify most appropriate communications methods. Benefit • Accelerates contact, awareness, understanding and acceptance of the • intended changes • Reduces stakeholder resistance resulting in positive action • (thinking and behaviour) • Greater ownership and awareness of MIS Upgrade Project Value of Approach • Structured approach to develop communication plans • Consistent application of Consultant’s world-wide OCM tools • Greater re-use of data collected during Change Readiness Assessment

  19. Communications Building Commitment Through Communications is a process... Internalization Communication Phase Institutionalization Adoption Genuine Grudging Formal Compliance Commitment/ Compliance Compliance Installation Installation Installation Compliance Acceptance Threshold Phase Positive Perception Understand Understand the Change Disposition the Change Preparation Threshold Phase Awareness Awareness Awareness I Contact Noncommitment Noncommitment Noncommitment Time OC160

  20. Change Facilitator Network What Establishing an internal network of change champions to build awareness and understanding of change management principles. How Network is established initially by involving client staff in a one day workshop to explore business change principles and concepts within the context of the MIS Upgrade Project. Benefit • Establishing a change infrastructure of staff who will promote the • Bank MIS Upgrade Project • Generating greater communication across the branch network • Involvement of those most affected by the changes • Greater understanding of change and their important role in the process Value of Approach • Structured approach to managing change • Opportunities for testing management potential • Build on Change Readiness Assessment results • Develop a link to customer facing staff in the branches • Opportunities for breaking down barriers between branches

  21. Change Facilitator - Tips • Involve those most impacted by the changes • Develop objective method for selecting candidates • Select staff of equivalent seniority • Select staff who are: • well regarded by their peers • credible • reliable • eager to learn and be involved • “opinion leaders” • Do not select staff: • who are perceived to be management mouthpieces

  22. Transition Management Plan What Incorporates data gathered during the Change Readiness Assessment, Change Facilitator workshops and communication planning stages to produce a comprehensive roadmap addressing the human aspects of change for the duration of the project. It will also provide other people related issues which are beyond the scope of Phase 1. How Working with project managers and the Task Force to thread together all relevant information. Benefit • Provide a Blue Print for Bank to manage change beyond March 1998 • Provide further issues to consider to help align business needs with • desired behaviour Value of Approach • Structured approach to managing change • Benefit of E&Y experience across similar IT enabled change projects • Assistance with the identification of HR issues using Consultant’s • Organisational Alignment methodology

  23. ALIGNED CULTURE MEASUREMENT & REWARD STAFFING & DEPLOYMENT COMMUNICATION Looking into the future ORGANISATIONAL STRUCTURE LEADERSHIP EFFECTIVENESS EDUCATION & DEVELOPMENT

  24. Looking into the future The value of Organisational Alignment • Drives organisational behaviour needed for process, technology and culture changes • Creates the environment where desired behaviours are communicated, modelled, measured and rewarded • Reinforces and sustains desired behaviours over time through alignment of human and organisational systems

  25. Looking into the future Organisational Performance Levers Current State Behaviour Future State Behaviour • Act without consideration • of other units and their • purpose • Withhold information from • others • Elevate issues / problems • upwards for resolution • Discount all ideas “not • invented here” • Focus on own needs rather • than those of the • organisation • Work with other units to • address problems and • opportunities • Share information with • others • Take initiative to solve • problems • Search out and welcome • new ideas • Focus on the needs of the • company, the customers and • other employees Communication Education & Development Leadership Effectiveness Organisational Structure Measurement & Reward Staffing and Deployment

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