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Assessing the Ne Cessity of Enterprise Change

Assessing the Ne Cessity of Enterprise Change

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Assessing the necessity of enterprise change:pre-feasibility and feasibility studies inenterprise integration
GREGORY UPPINGTON and PETER BERNUS
Abstract.
The article presents a process model of the leastformalized phase of enterprise change, in which managementand all other interested parties identify a need for change,assess what change methodology is adequate to handle thatchange and make preparations for enacting that changeprocess. This process is intended to be embedded in acomplete enterprise engineering
/
enterprise integrationmethodology. The aim has been to give a more detailedaccount of the first phase of enterprise integration, called the`identification’ phase of the enterprise life-cycle. A top level of the methodology’s process is presented as a series of IDEF0diagrams and their companion explanations, although futureversions may be developed in more elaborate languages (e.g.CIMOSA modelling constructs). The original aim to developthis part of the methodology was for the method to beespecially suitable for the service industry; it has been foundthat there was no need to be service industry specific on thislevel and that considerations applied equally to service andmanufacturing.
1. Introduction
Initial planning phases of any change manage-ment process are greatly enhanced with solidfoundations and identification of whether change isnecessary, what is to change, a clear method showinghow and where change will occur and the potentialeffects of such change (Mink
et al 
. 1993, Handy1985). Resulting from the identification that changecan benefit an enterprise or that change is necessaryfor the enterprise to retain its competitive advantage,the choice of the transition method is the onemanagement often finds to be the most difficult. It isthis choice which will often determine the futuresuccess of an enterprise.To understand the selection process of a changemethodology for an enterprise within a certain industrysector entails the consideration of a number of concerns in two areas. First: tacit notions, concepts,requirements and ideals of the change methodology.Second: the target enterprise, the necessity for changeand the strategic management process of such change.The following paper indicates those considerationsmanagement will face when discussing or enactingorganizational change. The information containedwithin this paper is generic across industry sectors, withcertain required contextual alterations and is consid-ered to be applicable to any change effort. The text isorganized to represent what activities will occur at eachstage of the change process Ð from the initial discus-sion of the validity and viability of change to the finaldecision and `sign-offto enlist the most appropriateorganizational change methodology and implement thechange process. The paper is aimed at establishing anorganizational process model. The model will allow for`an integrated information, manufacturing [ or service]and human relations architecture operating as anoverall systems responsive to the human and economicenvironment at all levels’ (Williams 1994a). This modeldraws predominantly upon the Purdue EnterpriseReference Architecture (PERA) (Williams 1994b) withwhich managers can select or combine individualmethods as proposed in the literature. Furthermore,the model is presented in such a way that the proceduredoesn’t become prescriptive or overwhelming. For thiswe have selected a functional representation of theprocesses involved, whereupon it is at the strategicmanager’s discretion in which succession the describedactivities are performed as long as their logicalconnections are respected.As such, this paper develops the processes
/
activitiesthat management can follow to identify the business
INT. J. COMPUTER INTEGRATED MANUFACTURING
, 1998,
VOL
. 11,
NO
. 5, 430 ± 447
0951-192X
/
98 $12.00
Ó
1998 Taylor & Francis Ltd
Authors:
Gregory Uppington and Peter Bernus, Griffith University, School of Computing and Information Technology, Nathan 4111, QLD, Australia.
 
entity that needs change and to identify the nature of change. In PERA and GERAM (Bernus and Nemes1996) this phase is called the `Identification Layer’ of the enterprise life-cycle. Requirements of this layer(phase) have been formulated based on the `Guide toMaster Planning for Enterprise Ingetration (EI) Pro-grammes’ Ð or `Purdue Guide’ for short Ð (sec. 2,Williams 1994a). The audience for this paper rangesfrom the CEO to the Technical Specialist (in-house orconsultant): those stakeholders who will be majorplayers in the change methodology are identified bytheir role in the change process (such as InitiatingSponsor, Project Champion, Feasibility Study Investiga-tory Team, and EI Steering Committee members).The Purdue Guide assumes that the `InitiatingSponsor’ and `Project Champion’ together have allinformation available to start a master planning process,therefore no so-called as-is analysis is needed in thisinitial phase of enterprise integration.Other methodologies, e.g. GRAI-GIM (Doumeingts
et al 
. 1995) assume that the direction of change needs tobe determined as part of the methodological steps,using an as-is analysis step.Although these two methodologies are seeminglycontradictory from this regard, we have generalized anddetailed a methodology for the initial phase of EI(herein presented) thereby extending its applicabilityto situations where the direction of change must bedetermined, to justify the proposed change to companymanagement (or that management can justify thischange for themselves).In the light of the methodology presented in thispaper the methodological steps of the Purdue Guideand those of GRAI-GIM are suitably specialized cases,and are by no means in contradiction in philosophy.Thus, interpreted in the context of the here presentedchange assessment methodology the respective initialphases of the Purdue Guide and of GRAI-GIM can (andare) plugged-in at suitable points (in fact selected bythe change initiating personnel).The Purdue Enterprise Reference Architecture, adetailed Enterprise Engineering methodology calls thetop enterprise life-cycle the `identification phase’ orlayer (the terms layer and phase are used interchange-ably in this article in which an Enterprise BusinessEntity (EBE) is appropriately identified as the target forchange (see figure 1, A1: Identify EBE).
1
The methodology detailed herein investigates thevalidity and viability of the intended change process forthe organization to ensure that it maintains itscompetitive advantage both during and after thechange process. Section 2 `EBE Identification Ð Pre-Feasibility Study’, outlines the initial identification of the benefits of an enterprise integration programme,the process of identification of the EBE, and the processof gaining management commitment for the successive`EBE Identification Ð Feasibility Study’ (figure 2).
Assessing the necessity of enterprise change
431
Figure 1. The three stage process of Master Plan development (EBE Identification is shown as the first stage). (IS: InitiatingSponsor, PC: Project Champion, FSIT: Feasibility Study Investigatory Team).
1
It is not predetermined what should be the size and extent of an EBE; it canbe the entire organisation or any part of it that management want to consider asa cooperating but autonomous unit. Typically, an EBE may be a whole businessunit responsible for a type of product, product group or service. This businessunit may be situated at a given location, or distributed within a region or world-wide. The best way to delineate the EBE is by considering the service the EBEgives to the market. All activities which are considered by management to becore (strategic) activities in the provision of the above service are ideallyhandled within the EBE. Other activities which are not core are either done inseparate EBEs of the same enterprise or are performed by outside contractors.In this way an enterprise of any size can be considered an EBE, comprehensivelymanaging all activities that are needed in the value chain of its products, andwhich activities are carried out in inter-enterprise or intra-enterprise coopera-tion (between EBEs).
 
Section 3 `EBE Identification Ð Feasibility Studyutilises the information and findings from the Pre-Feasibility Study (PFS). This section covers the EBEenvironmental analysis (subjective analysis), the EBEcorporate appraisal (objective analysis), and an EBETO-BE scenario formulation (the initial EBE vision)and evaluation via a Feasibility Study (FS) to determinethe viability and validity of this scenario. Furthermore,guidelines for the Master Planning process are pro-posed and an EI Planning Team (PT) is formed.The identification phase of the enterprise life-cycleis completed with the establishment of the initial EIprogramme (this latter is not discussed in detail in thepresent paper).The methodology has been tried in its new formon two case studies. One in the Globeman 21consortium (of which the results are at the momentproprietary material), and the second involves theservice industry applied to a small proprietary en-terprise Ð where it transpired the methodology helpedidentify a new business in the field of tourism inremote Australia and was able to efficiently helpformulate the basic business strategy as well as guideinformation gathering for the establishment of thebusiness in a very efficient manner (the time scheduletook approximately three weeks).
2. EBE identification Ð pre-feasibility study
Given the increasing size and complexity of modernorganisations, it is becoming more important to payparticular attention to the initial stages of any strategyformation (Mink
et al 
. 1993, Handy 1985). This is oftenconsidered part of the project conception or initiationphase and forms the foundation for proceeding events.Within the enterprise integration framework thereexists a need to investigate the validity and viability of the intended change process to maintain competitiveadvantage both during and after the EI process. For thepurpose of this paper, we have broken the projectinitiation phase into two major components: the Pre-Feasibility Study (PFS) and the Feasibility Study (FS). Itis important to recognize that these processes areessentially different and equally important. This sectiondeals with the first of these processes Ð the Pre-Feasibility Study.In small projects, many of the activities outlinedhere may be undertaken as part of the Feasibility study.However, for large and complex organizations (e.g. amultinational hotel chain) it is essential that the valueof the intended process be established before resourcesare allocated to more costly exercises like feasibilitystudies. As a consequence, the PFS outlined in thispaper is primarily undertaken to initiate the processand to establish its likely contribution to the organiza-tion’s competitive advantage.The pre-feasibility study is carried out to determine:
·
The organisation’s current
status quo
(how it iscurrently operating in terms of market forces,competitive position, etc.).
·
Whether there is a need for the organization toundergo a change process.
G. Uppington and P. Bernus
432
Figure 2. The three stage process of Enterprise Business Entity (EBE) Identification.

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