Managing IT: Planning and Implementing Change

1. Managing IT: Planning and Implementing Change

3. Chapter Objectives • How end user resistance to changes in business processes or IT can be minimized by end user involvement in the systems development and implementation process. • The factors that should be considered in evaluating the acquisition of hardware, software, and IS services. • The activities involved in the implementation of new information systems.

4. Planning for Business Change • Business planning is an important organizational process of team building, modeling, and consensus that analyzes and evaluates key elements of the business. • More specifically, it evaluates an organization’s internal and external environments, forecasts new developments, establishes an organization’s vision, goals, and objectives and develops strategies, tactics, and policies to realize them. • Effective IT planning is a key ingredient in achieving strategic business success with information systems.

5. Integration planning framework Strategy • Strategic priorities • Go to market strategy • Portfolio • Channel strategy Structure & process • Organization structure • Systems & processes • Information flows and decision making process • Financial & information systems architecture • Measures • Customer satisfaction • Financial • Employee satisfaction • Operational excellence • Recognition and reward systems People & culture • One common culture • Retention of top talent • New competencies for our people • Roles and responsibilities

6. IS Planning • Information systems planning involves several planning activities: • Strategic IS Planning - aligns investment in IT with a company’s business vision and strategic organizational goals. Tactical IS Planning - evaluates current and projected information needs of the organization, prioritizes IS development projects, and develops allocation plans for financial and technology resources. Operational IS Planning - develops plans such as annual operating budgets and individual IS project plans.

7. IS Planning Methodologies • Business organizations utilize a variety of IS planning methodologies. These methodologies include: • Scenario approach • Use of strategic opportunities matrix • Critical success factors • Business systems planning • Business simulation and enterprise modeling through computer-aided planning software

8. Implementing Business/IS Change • Implementing business change includes managing the introduction and implementation of changes in business processes, organizational structures, job assignments, and work relationships resulting from reengineering projects, strategic business alliances, and the introduction of new technologies. • Companies often use change management programs to lower the risks and costs and maximize the benefits of such major changes in business and IT.

9. Evaluating Hardware, Software, and Services • A formal evaluation process reduces the possibility that a business will buy inadequate or unnecessary computer hardware or software. • When evaluating hardware, the business should investigate specific physical and performance characteristics for each hardware component to be acquired. These characteristics include performance, cost, reliability, availability, and compatibility to name a few. • Software evaluation should be conducted in a similar way, investigating many of the same characteristics. • Evaluation factors for IS services should focus on the quality of support services computer users may need.

10. Implementing IS Implementation activities are needed to transform a newly developed information system into a operational system for end users. • Implementing a new system should include the following steps: • Acquisition - acquire necessary hardware and software resources • Software Development - develop necessary computer programs and make necessary modifications to software packages • Training - educate and train management, end users, etc. • Testing - test and make necessary corrections to programs, procedures, and hardware • Documentation - record detailed system specifications • Conversion - convert present system to new and/or improved system

11. Cultural Integration To build a strong, new culture that: • Is clearly defined and broadly understood • Reflects the business strategy and brand • Supports best-in-class performance with customers, partners, shareowners and employees • Produces alignment, commitment and excitement • Establishes a competitive advantage • Is reflected in the communications and actions of core leaders

12. Culture integration planning framework • Sample input • Newco execculture session • HP historical • CPQ historical • New HP brand • Competitive environment • Customer Structure & process Strategies Corporateobjectives Metrics &rewards Behaviors Values • Sample output • Vision & governance for new company • Balanced scorecard & pay metrics • Leadership selection • Formation & start-up of new teams • Customer (quality) initiatives • FastStart program Policies &practices

13. Summary • A good planning process helps organizations learn about themselves, uses resources efficiently and effectively, and promotes organizational change and renewal. • Various IS planning activities and methodologies can be used to help businesses implement business/IT change. • A formal evaluation process reduces the chance that an organization will buy incorrect hardware, software, or IS services. • An effective implementation process transforms a new information system into an operational system for business end users.

14. Some Possible Questions • 1. Name and explain the three main planning activities • involved in information systems planning. • 2. What are major evaluation factors that a business should • consider before acquiring proposed hardware, software, • or IT services?

15. The Organizational Planning Process Analyze the Organization's Environment Forecast Internal and External Developments Establish Vision Mission Goals Objectives Team Building, Modeling and Consensus Articulate the Organization's Plan Evaluate Accomplishments and Resources Develop Implementation Methods and Controls Feedback

16. Vision Strategy Tactics Business Plan Competitive Options Roles, Roles and Relationships Redefine/Define Telecommunications as the Delivery Process Success Factor Profile

17. Values Beliefs Principles C u l t u r e Mission Goals Vision Strategies Tactics Objectives and Measurements Authority and Responsibility Business Plan

18. How to Run a Business 1. The primary job of a CEO is the long term viability of the business. 2. Vision can be the key to business leadership. 3. Vision without action is poverty-stricken poetry. 4. Action without vision is stumbling in the dark.

19. Questions 1. How important is it for a company to have a well understood vision? 2. Is there something unique about a visionary executive? 3. What factors influence the creation of a vision? 4. What are the logical time dimensions of a business vision? 5. What major challenges frequently accompany establishing a new vision within a company?

20. What the company wants to be at some point in the future. Motivates people as to what the company is trying to change. Provides a continuing focus. Provides a yardstick for measuring progress. A Good Business Vision

21. Ex-Vision Statement To be recognized as the best airline in the industry by our customers, employees and shareholders. Continental Airlines

22. Delta Vision for the Future Our vision is for Delta to be the worldwide airline of choice. We will provide our customers access to the world, and we will be an innovative, aggressive, ethical and successful competitor committed to profitability and superior customer service. Looking ahead, we will consider opportunities to expand through new routes and alliances.

23. Key to the Vision Process 1.Establish a clear vision of the future. 2. Provide a basis for sharing values and views (the vision). 3. Send a message regarding the importance of the vision process throughout the entire organization to gain consensus and momentum.

24. Change Change is a significant alteration or disruption in peoples’ expectation patterns. Like it or not, people are creatures of habit. We live in a world of change, yet we act on the basis of continuity.

25. Change Continuity: Is familiar Provides safety and security We like to plan on the basis that present conditions will continue. Change: Is unfamiliar It disturbs us We avoid it We often resist it

26. Human Aspects of Change • New skills are required. • Patterns of communication are altered. • Time spans between communications are decreased. • Points of influence, authority and control are redefined. • Roles, work relationships and reporting responsibilities are • modified. • Data ownership shifts. • Privacy and security concerns increase. • New management techniques and organizational structures • evolve.

27. Change Management

28. Definition of Change Management Managing the process of implementing major changes in IT, business processes, organizational structures, and job assignments to reduce the risks and costs of change, and to optimize its benefits.

29. What Does Change Management Require? A commitment from top management and an organizational design to plan the future of IT and IS within the business. Change management involves analyzing and defining all changes facing the organization, and developing programs to reduce the risks and costs, and to maximize the benefits of change.

30. End User Resistance • New ways of doing things creates resistance among employees. • This is the biggest obstacle to the implementation of new information systems.

31. End User Implications Dealing with end user resistance: - Proper education and training. - Direct end user participation before implementation helps insure that the end users assume ownership of a system, and that its design meets their needs.

32. Reengineering a Business Process • Develop a change action plan. • Assign selected managers as change sponsors. • Develop employee change teams. • Encourage open communications and feedback about organizational changes.

33. Change Management Activities Human resource management handles: Activities - Such as developing innovative ways to measure, motivate, and reward performance. Program - Design a way to recruit and train employees in the core competencies required in a changing workplace.

34. Recommendations of Consultants • Involve as many people as possible in reengineering and other change programs. • Make constant change part of the culture. • Tell everyone as much as possible about everything as often as possible, preferably in person. • Make liberal use of financial incentives and recognition. • Work within the company culture, not around it.

35. Summary Fast paced change has frequently become essential for a business to remain efficient in its operations and/or to remain competitive. Change management has become fundamental to running a successful business.

36. Possible Questions 1. Why is change management an important aspects to running a successful business? 2. Identify key factors that would enable an organization to successfully implement a major new information system.

37. Organizational Design Change Management Measurement and Rewards Core Competencies Development Managing Organizational Change Executive Vision Organization Mission Work Redesign

38. Change: An Important Management Issue Time compression: information and communications Turbulence: political and cultural Interdependence: one economic and social world Technology advances: rapid pace of product change and its impact on other areas. Business pressures: time to market, time to develop and manufacture and time to decisions.

39. A New Attitude? Change is natural and to be expected. Continuity is unnatural and to be suspected.

40. Create Vision Determine Drivers Assess Develop Strategies Design IT Arch- itecture Develop Tactics Information Systems Planning IT Architecture Best Practices Strategic Opportun- ities Technology Platform Re- engineer Technology Implementation Plans Data Resources Specific Needs Business Vision Gap Assess- ment Business/IT Strategies Application Portfolio Investment Plans Existing Capabil- ities IT Organ- ization Organization Transformation Plans Customer Needs Long-Range Position Needs Partners Needs

41. Some Questions What is happening in our industry and related industries? What makes us special? What must be done to remain so? Who are our competitors and business partners? What type of organization and style of management do we want to have? What role should IT logically plan in our future?

42. Strategic Opportunities Matrix High Risk High Payoff Opportunities High Success High Payoff Opportunities High Strategic Business Potential Safe, but Low Payoff Opportunities High Risk Low Payoff Opportunities Low Low High

43. Goals Critical Success Factors Earnings per Share Market Share Key Areas in Which High Performance is Needed to Meet Goals Return on Investment New Product Success • Automotive Industry • Styling • Dealer System • Cost Control • Energy Standards Other Factors

44. Information Systems Architecture

45. Information Systems Architecture Architecture is determining the needs of the user and then designing and building systems to meet those needs as effectively as possible within economic and technological constraints. Fred Brooks Author “Mythical Man-month”

46. IS Architecture 1. Involves explicit ways to depict what you are trying to accomplish so that multiple people can create around the same baseline. 2. A top down approach to systems design that minimizes risk by reducing erroneous assumptions. 3. Quality expectations also force a higher level representation.

47. What is IS Architecture? • Business/IT strategies develop a basis for the IT architecture • It is a conceptual design, or blueprint, that includes: • Technology platform • Data resources • Application portfolio • IT organization • It is a conceptual design, or blueprint, that dictates • how information systems will be designed and built. • Always remember that business strategies develop a • basis for the IS architecture. • IS architecture elements includes: • Technology platform • Data resources • Application portfolio • The IS organization

48. Technology Platform • What sort of platform do you need to support the information technology in a business? • Computer system • Systems and application software • Telecommunications Networks (to provide a computing and communications infrastructure) • What sort of platform do you need to support the business with information technology? • Computer system • Systems and application software • Telecommunications Networks (to provide a • computing and communications infrastructure)

49. Different types of operational and specialized databases such as: Data warehouses Analytical databases External data banks store and provide data and information for business processes and managerial decision support. Data Resources • Different types of operational and specialized databases such as: • Operational databases • Data warehouses • Analytical databases • External databases • Provides data and information for business processes and managerial decision support.

50. A diverse portfolio of information systems that support key business functions as well as cross-functional business processes. Interorganizational business linkages Managerial decision making End user computing and collaboration Strategic initiatives for competitive advantage Application Portfolio • A diverse portfolio of information systems that support key business functions as well as cross-functional business processes. • End user computing and collaboration. • Managerial decision making. • Interorganizational business linkages. • Strategic initiatives for competitive advantage.