presents

tHRive
In association with
Name of the Case:

Digital Transformation at The National Infrastructure Corporation

Introduction:

August 2017: As Kishore Bhutani, the Project Manager of the Karnataka Circle opened his email in the
morning, one announcement issued by the General Manager – IT, from Head Office, New Delhi, Mr.
Sandeep Srivastava caught his eye. It was about the implementation of the integrated technological
solution at the National Infrastructure Corporation Ltd. (NICL). This project was about the implementation
of an Enterprise Resource Planning (ERP) system at the organization.

The announcement mentioned that this project would have far reaching implications for the efficiency,
productivity, compliance, and quality of decision making at NICL.

In simple terms, the email mentioned that ERP stands for Enterprise Resource Planning. It is a software
tool for managing information to run the operations efficiently. This software is designed to support and
integrate almost every functional area of a business process such as Planning, Procurement of goods and
services, Project Management, Operations & Maintenance, Finance, Accounting, Budgeting and Human
Resource.

Background:

NICL was a large and well-known Public-Sector Undertaking (PSU). It was engaged in infrastructure
projects like bridges, roads, and buildings. A lot of Public Enterprises in India, like NICL were in the process
of implementing ERP systems. They are doing it so that the various modules developed for the processes
like Project Management, Procurement, Finance and even Human Resources which may have been
implemented over a period and developed independently have continued to work as standalone systems.
But with the growing interdependencies and complexity, all organizations need a system in which each of
these applications could talk to each other (exchange data and information) and share a common data
base. Moreover, the system eliminates information silos between departments and provides everyone a
single source of “truth”. This results in better management of projects and the availability of accurate
information results in better decision making.

Implementation at NICL
The implementation of the new ERP solution at NICL has also been triggered by similar factors. For
example, there are several applications (about 60) which are disparate and stand-alone. The new system
would eliminate majority of these legacy applications and will also allow seamless flow of information
across these applications and facilitate a changeover from information silos to a more integrated system.
In addition to the above, under this project an ambitious digitization of all key documents is envisaged
with centralized storage and indexing of all documents. This would help in providing standardized, clean
and error free data to the users, and easy accessibility and traceability of documents. In addition, the
system can provide valuable information for decision support by way of the ease of customized report
generation.
What is changing?
The biggest change is in the way that the people have been working. It is a change in the mind- set to
greater adherence to processes, transparency, and compliance. Automation of processes would result in
elimination of manual updations and approvals. Coupled with digitization, it would make the practice of
maintaining hard files redundant. Most of the processes would be managed through the system. It would
mean greater e-literacy and understanding of basic computer operations. At the organizational level, the
availability of dynamic data would result in the ease of decision making.

When will the ERP solution be implemented?

Project team had prepared an indicative delivery schedule that covered an 18-month period for the
complete roll out of new ERP solution. During the first wave, expected to begin from July 2018, a
centralized help desk will be setup to provide SLA based support for IT issues and enhancement to the
Legacy applications - for better Project Tracking & Monitoring, Wave 2 was planned for release by March
2019 to include the roll out of all the modules in SAP across all our business process. Wave 3 was planned
for release by August 2019 to include the introduction of advanced features of SAP.

Project Team
This project on digital transformation at NICL was being implemented by DC Technologies (DCT) – a global
IT company with its Indian headquarters at NOIDA, National Capital Region. DCT was the lowest bidder in
this project which was bid by all the major IT companies in the country. The ticket value of over Rs. 800
million made this to be among the high value projects that the company was implementing
internationally. The Project team was led by Firoz Mistry, who had extensive experience of implementing
such projects for other Public Sector Undertakings. The total team size which was to implement this
project was to go up to 125 people at its peak stage.

However, the Government of India (GOI) had this time made a provision of the appointment of a Change
Management Professional Agency as mandatory for the implementation of this project. This was a long-
awaited need, and in many ways, India was catching up with the rest of the world. In most of the
developed countries, for most complex projects like a major digital transformation or a major change in
processes and structure, there was a growing trend of engaging change management consultants. This
helped in early stabilization of the project, overcoming resistance to change and evaluate readiness,
capacity, and commitment to change.

Change Management Agency

After a long search, DCT had selected PSL as the Organization Development consultancy to facilitate
change. A small team of 2 people was led by Swaraj Taneja, an industry veteran. Swaraj was educated in
premium institutions in India and abroad and had a vast experience of managing different HR and OD
projects. While he had a great understanding of change management principles, at times he was impatient
and, in some ways, too much of a perfectionist. Having worked with the best MNC and other Indian
companies, he believed in transparency, a systems- oriented approach, and a very high order of
professionalism. Some of these virtues would come in the way of efficient discharge of his duties as at
times the situations demanded compromise and tolerance.

Problem Statement/Challenges Faced

July 2017:

The project director Firoz Mistry was in a sombre mood. In the last eight months since the award
of the project, he had not been able to set up the team. Critical positions like the chief program
manager and functional project leads were still vacant. The Change Management consultant’s
appointment had been delayed, and Swaraj Taneja had finally joined the project last month. He
was not getting the desired support from the client – NICL as he did not know who oversaw the
implementation of the project from NICL. The CEO of NICL was a govt. appointee, and clearly, he
had not been briefed properly. The top management team reporting to the CEO was busy in their
own work and did not seem to have ownership of the digital transformation project. Mr. Sandeep
Srivastava, GM – IT, NCIL had been appointed as the team convener, but lacked the gravitas and
the capability to lead the project. Mr. Srivastava had not made a single presentation to the top
management team about the scope of the project and its benefits.

Meanwhile Swaraj had set up to work in earnest. Though he had been in place only for a month,
he had been able to get to grips with the situation. He had been able to understand the scope of
the project, draw an implementation plan for the change management of the project, and had
put in place a schedule for the change management plan. The change management plan included
the objectives of the project, the objectives of the change management plan, the guiding
principles, rationale of the change, key stakeholders’ analysis, approach for assessment of
readiness of change and most importantly the identification of the communication messages and
the use of various channels.

Firoz was very impressed with the work that Swaraj had done and struck a great rapport with him.
He also appreciated the depth of knowledge and expertise of Swaraj. He understood the value
that change management could bring in making people understand the benefits of the project
and addressing resistance.

Swaraj was happy to collaborate with Firoz and appreciated his humility and the keenness to
learn. If this project succeeded, Swaraj had plans to sell that experience to other IT companies
and make this into a big business stream. This was a huge business opportunity as change
management was still in its infancy in India, though quite popular in advanced economies like USA
and Canada.

In his plan Swaraj had contemplated interactive workshops to be held at all the regions to inform
the people about the digital transformation project, its objectives, the timelines of
implementation, the benefits of the project to the organization and the support that was needed
from the people for its smooth implementation. He had devised a grand announcement, posters,
and videos to be issued from time to time. Also, he had developed detailed metrics for measuring
the stakeholder’s engagement and for assessing the readiness to adopt the new change.
August – November 2017:

Swaraj and Firoz teamed up together and had a good start. They planned a flurry of activities. The
first formal announcement was drafted and made by Mr. Sandeep Srivastava. Posters and Videos
about the project started to appear. The communication workshops in the various regions and
offices were scheduled.

The first workshop in the Head Office at New Delhi started off to a lukewarm reception. Though
over 200 people were expected, only a handful arrived for the one-hour session. None of the
senior managers made it to the meeting. The learnings of the first session were incorporated in
the second session at the same venue, but still the response was poor.

This trend continued and though five workshops were conducted at HO, the average response
was about 25 participants. Very few key stakeholders and other senior managers attended the
session. Worried over the tepid response, Swaraj tried to seek feedback about the reason for the
poor attendance. One of the employees who did not attend the sessions despite wide publicity
remarked, “My manager didn’t allow me to go. I was told it is a waste of time. This project is never
going to happen. We are used to making our noting on the file, and an IT system can’t replace the
old system of taking approvals and decision making.”

Other employees who attended the sessions wanted more relevant case studies about
successful ERP implementation at other PSUs to be incorporated in the presentation. Swaraj sat
with his team, and collected successful stories of implementation at other PSUs, and converted
them into animated slides explaining the workflow. In one of his interactions with Senior
Managers, Swaraj also happened to meet Mr. Basavaraj Shetty, GM – Finance. Mr. Shetty was
very excited about the ERP implementation and wondered why it was not getting accepted in the
organization. He mentioned to Swaraj that he was one of the task force members in Sriveni
Colleries, a coal mining company under the GOI about 3 years ago. Mr. Shetty further informed
Swaraj that the implementation of the digital transformation project at his last organization was
more complex. Sriveni Colleries had thousands of people in the mining department and greater
organizational complexity. But they were successful in implementing the project in time. In fact,
after this discussion Swaraj started to mention Mr. Shetty’s experience in the last organization.
But surprisingly, this backfired. He was informed by the GM – IT, Mr. Srivastava that he should
avoid taking Mr. Shetty’s name in the workshops as he was a controversial person.

Meanwhile there was a silver lining in the reception of the communication workshops at NICL. In
late September 2017, the North-eastern Subsidiary of NICL was selected for the launch of the
introductory communication workshops. The Head of HR, Mr. Goswami following a structured
approach had divided the organization into groups of 20-30 department-wise. Taking the Director
of the subsidiary in confidence, he had issued instructions to the entire subsidiary to attend the
communication sessions on each Saturday starting from the first week of October 2017. Each
communication workshop had to be attended by the head of the department along with his entire
team. The 2-hour session was structured properly. It began with the introduction of the project
by the head of the department, followed by the presentation by Swaraj and his team, and then
concluded with a question-and-answer session. A provision was also made for offering a
sumptuous lunch for all participants after the sessions. This was quite successful, and over 80% of
the subsidiary had been covered by end November 2017.

Elsewhere in the organization, the response to the communication workshops and the excitement
around the new project remained weak. In his meetings with Senior managers, Firoz and the
project implementation team were facing a lot of criticism from the users. The users complained
that the DCT’s project team leads were not able to map their As-Is processes properly. The quality
of technical people deployed was of poor quality, and many times they came to the meetings
unprepared.

Firoz was getting a major push back from a lot of constituents about the new processes as well.
He felt a huge resistance to the introduction of the new processes and many of the users and
departmental heads were not convinced that the new system would perform better than the
legacy systems in place already. In his meetings Swaraj also got some of the same feedback. He
discussed it with Firoz and recommended to him that it was important to get the ownership of
the key stakeholders like the CEO, the functional and the operational heads of NICL first.

Keeping that in mind, Swaraj had started meeting with these key stakeholders. In some of these
meetings Firoz or one of his senior leads was also present. While they did sense that many of
these managers were not convinced about the efficacy of the new project, they also picked up a
very disturbing message. In informal discussions, the project leads of DCT started whispering that
the real reason of the resistance of the project was that this project if implemented would bring
in a lot of transparency. This could make life difficult for a few people who wanted greater leeway
and secrecy in manipulating files to their advantage. This was possible when the files were
maintained in paper form, but almost impossible in the digital system format. This allegation could
yet not be proved.

December 2017 – March 2018:

By December 2017, the project delays began to show up. The first phase of the project which was
expected to roll out by the middle of next year was nowhere in sight. In fact, the Business
Blueprint (BBP), the stage prior to the Phase 1 was not even halfway through. The Project
according to the team, was more than 6 months delayed already. This began to raise the heckles
of a lot of people. The DCT team had received the first tranche of payment on project signing, but
the other payments were linked to the project milestones were beginning to get delayed.

As often happens in such cases, this led to a lot of finger pointing from both sides. NICL blamed
DCT for the delays as it had failed to deploy the full team. NICL kept on insisting that even the
ones deployed by DCT were not experienced and lacked the required competence. DCT on the
other hand blamed the delays to lack of cooperation from the NICL management and delays in
approval of plans. Swaraj tried to resolve these conflicts and had on one of the weekends
conducted a collaboration session with representatives of both the sides. This seemed to work
for a few days, but again the conflicts resumed, and in a more intensive manner.

Exasperated, the Joint Secretary in the GOI, called a meeting in mid-March 2018 to discuss the
way forward. This was a critical meeting because the continuation of the project seemed to be in
question. The meeting was to be attended by Firoz and his top team, Swaraj and the management
team of NICL along with its CEO.

March 16, 2018

The meeting was held. It started off well. Firoz and his team made the detailed presentation and
appraised the attendees about the progress, reasons for the delay and some solutions. Finally, in
the end, he invited Swaraj to make a short presentation on the Change Management experience.

The Jt. Secretary welcoming Swaraj mentioned that in a complex digital transformation like this,
a proper change management was of utmost importance. He said that the success of the project
depended upon the mobilization of commitment from the users as well as the stakeholders and
wanted to know the efforts made towards managing change.

Swaraj had made a crisp presentation. He had relied on data to make his points, and as was his
experience in the private sector he was candid in his remarks, and somewhat provocative. His
intention was to ignite a debate about how to get the project back on track. He was hoping to
leverage on the presence of top leaders from the organization to agree to an action plan for the
revival of the project.

His presentation showed the efforts the change management team had made to explain the
proposed change to the people using various communication channels like videos, posters, and
announcements. He also mentioned the coverage of the people in the various regions including
the Head Office in the Communication Workshops. As shown in the attached annexure, he shared
the results of the Change Readiness survey in the NICL head office as well as in the NE Subsidiary.
He deliberately tried to create internal competition and played upon the comparison of various
units including the NE subsidiary.

This data seemed to expose the functioning of the top management of NICL. It got the CEO, and
the other senior executives of NICL very irritated. The CEO did not like the comparison with the
NE Subsidiary. This subsidiary was autonomous, and the chief executive of this subsidiary did not
report to the CEO of NICL, but to the Chief Secretary of the GOI, Ministry. They felt exposed before
the Ministry officials and blamed Swaraj for being arrogant and irresponsible. Swaraj and Firoz
stood their ground and mentioned that they were ready to be challenged by anybody regarding
the authenticity of the data. The meeting took an ugly turn, and the CEO and the other senior
managers started blaming Firoz for high handedness and brought out the issues regarding the
poor quality of the project leads of DCT. Sensing that the meeting was not going in the right
direction, the Jt. Secretary called off the meeting, and politely mentioned that he would try and
reconvene the meeting after a few days.

March 18, 2018

The GM-IT of the project from NICL summoned Firoz for a meeting in his office on January 18,
2018. He was furious with Firoz and threatened to terminate the contract. He mentioned that the
CEO and the top management team were upset with the approach that Swaraj had taken in the
meeting on March 16 with the Joint Secretary. They felt that what was inconceivable that Firoz
 had authorized Swaraj to make such a presentation. He further mentioned that the top
management had taken a very serious view and directed Firoz to remove Swaraj from the project
with immediate effect. Firoz tried to explain to Mr. Srivastava that Swaraj was just being
professional in the meeting, and he did agree that Swaraj could have been a bit more tactful in
presenting the data. But Mr. Srivastava would have none of it. Either the project would be
terminated, or Swaraj had to go.

This was a difficult decision for Firoz. He requested for a few days to come back, to which Mr.
Srivastava reluctantly agreed. Firoz discussed this issue with the DCT Management. But
unfortunately, this was a much too high-profile project for the DCT management to sacrifice. They
agreed to remove Swaraj from the project with someone who more amiable and flexible. He left
the DCT office with a heavy heart because he respected the professional integrity of Swaraj. He
too had felt that Swaraj could have managed it a bit differently, though he understood that in his
earlier organizations, this was the way professional organizations conducted the meetings by
transparently sharing the data, and then trying to come with a solution to amend the situation.

But things were different here, and he knew that Swaraj’s departure was inevitable.

Annexure – Some data shown in the Meeting of March 16, 2018 in the conference room of
Jt. Secretary
CHANGE READINESS SURVEY – NICL

(Scores are from 1-5, Min: 1, and Max -5)

 Data obtained from the survey forms collected after the communication workshops

 Overall Change Readiness score is the mean of Understanding, Emotion, ability and
intent

Critical Case Questions

 The digital transformation effort is faltering. What are some of the reasons why it is not
working? If you were to start this project all over again what would you do to ensure the
success of the digital transformation? Please elaborate.
 What modifications (if any) would you suggest to ensure the success of the change
management process? Draw out a change management strategy for this digital
transformation.

Submission Format
• Submit your solution in .pptx format or .pdf format

• The number of slides of your solution should be minimum of 2 slides and maximum of 6 slides
excluding Introduction and Thank You slide.