CHANGE MANAGEMENT

- Approaches to managing changes to organizational processes and structures and their

impact on organization staff and culture.
- Is an organized, systematic application of the knowledge, tools, and resources of
change that provides organization with a key process to achieve their business
strategy according to Markus Wanner.

➢ Different aspect of change management and the chapter is structured around the
different aspects of change we need to plan for; these includes:

• Scheduling – what are the suitable stages for introducing changes?

• Budgeting - how do we cost investment in digital business system and project?
• Resources Needed – what type of resources do we need, what are their
responsibilities and where do we obtain them.
• Organizational Structure – do we need to revise Organizational Structure?
• Managing the human impact of change – what is the best way to introduce large-
scale digital business change to employee?
• Technologies to support Digital Business Change – the roles of knowledge
management, groupware and intranets are explored.
• Risk management – approaches to managing risk in digital business projects.

➢ These are all major changes that are required in order for an organization to be agile
enough to respond to marketplace changes and deliver competitive customer service.
To help achieve these different aspects of changes, a series of success factors seems
to be required. These include:

• Management buy-in and ownership;

• Effective project management
• Effective project management
• Action to attract and keep the right staff to achieve change;
• Employee ownership of change.
➢ The Challenges of sell-side e-commerce implementation
• Strategy – Limited capabilities to integrate internet strategy into core marketing
and business strategy as discuss in chapter 5 is indicate by frustration on gaining
appropriate budget.
• Structure – Structural and process issues are indicated by the challenges of gaining
resource and buy in traditional marketing and IT function.
• Skill and Staff – These issues were indicated by difficulties in finding specialist staff
or agencies.
As part of the research, respondents were asked what their main challenges were and this
highlighted the issue of gaining sufficient resource for internet marketing. Their key
challenges include:

• Gaining buy-in and budget consistent with audience media consumption and value
generated.
• Conflicts of ownership and tension between a digital marketing team, traditional
marketing, IT, and finance and Senior Management.
• Condition with different Channels in conjunction with team managing marketing
programs elsewhere in the business.
• Managing and integrating customer’s information about characteristics and
behavior collected online.
• Achieving a unified reporting and performance improvement process throughout
the business including reporting, analysis and auctioning suggested changes.
• Structuring the specialist digital team and integrating into the organization by
changing responsibilities elsewhere in the organization.
 • Insourcing vs outsourcing online marketing tactics.
• Staff recruitment and retention since there is a shortage of digital marketing skill
given the rapid growth in demand for this skill, which give great opportunities for
everyone reading this book.

Every Respondents articulated the need for education of colleagues in the organization about
the benefits of e-commerce and the changes in process required to achieve this benefit. This
needs for education that was mention with respect to three main parts of the organization:
1. Senior Management. Managing the senior management team interface was mainly
and issue for less-evolved adopter for e-commerce.

2. Marketing, different Brands, business or countries. Similarly, this was more of an

issue for the less-evolved organization.
3. Information Technology. This interface was mention as a challenge by nearly every
respondent- there was a belief that insufficient resource for application
 development was limiting the potential of e-commerce to deliver value to customers
and the organization.

DIFFERENT TYPES OF CHANGE IN BUSINESS

Incremental change – involve relatively small adjustment required by the changes in the
business environment.
Discontinuous Change – Change involving a major transportation in an industry.
Organizational Changes – includes both incremental and discontinuous change to
Organization.
Anticipatory Change – An organization initiates change without an immediate need to
respond.
Reactive Changes – A direct response by an organization to change in its environment.

➢ The four different forms of organizational change identified by Nadler et al. (1995)
are:
1. Tuning – This is an incremental form of change when there is no immediate need for
change.
2. Adaption – Also an incremental form of changes, but in this case it is in response to
an external threat or opportunity.
3. Re-orientation – A significant change of transformation to the organization is
identified as a priority in the short-to-medium term.
4. Re-creation – in recreation, the senior management team of an organization decide
that a fundamental change to the way it operates is required to compete effectively.

BUSINESS PROCESS MANAGEMENT

Is a Methodology, as well a collection of tools that enables enterprises to specify step-
by-step business Processes. Proper analysis and the design of BPM flows require a
strong understanding of the atomic business steps that must be performed to
complete a business process.
BUSINESS PROCESS RE-ENGINERING
The fundamental rethinking and radical redesign of business processes to achieve
dramatic improvements in critical, contemporary measures of performance, such as
cost, quality, service and speed. -Hammer and Champy (1993).

The key term from this definition that encapsulate the BPR concept are:
Fundamental rethinking – re-engineering usually refers to changing of significant business
process such as customer service, sales order processing or manufacturing.
Radical redesign – re-engineering involves a complete rethinking about the way business
process operate.
Dramatic improvements – The aim of BPR is to achieve improvements measured in tens or
hundreds of percent. With automation of existing processes only single-figure improvements
may be possible.
Critical Contemporary measures of Performance – This point refers to the importance of
measuring how well the process operate in terms of the four important measures of cost,
quality, service and speed.
The staged approach to the introduction of BPR has been suggested by Davenport (1993).

• Identify the process for innovation- these are the major business process from the
organization’s value chain which add most to the value for the customer or achieve
the largest efficiency benefits for the company.
• Identify the change levers - these can encourage and help achieve change. The main
change levers are innovative technology and, as we have seen, the organization’s
culture and structure.
• Develop the process vision - these can encourage and help achieve change. The main
change levers are innovative technology and, as we have seen, the organizations
culture and structure.

• Understand the existing process - current business processes are documented. This
allows the performance of existing business processes to be benchmarked and so
provides a means for measuring the extent to which a re‑engineered process has
improved business performance.

• Design and prototype the process - – the vision is translated into practical new
processes which the organization is able to operate. Prototyping the new process
operates on two levels. First, simulation and modelling tools can be used to check the
logical operation of the process. Second, assuming that the simulation model shows
no significant problems, the new process can be given a full operational trial.

The Imperative for Project Governance

Respondents to the E‑consultancy (2007) research believed that w eb related projects are
different from other projects because of their need to be responsive to:
● changing customer requirements and market conditions;
● the breadth of people and skills involved;

● the raft of stakeholders;

 ● frequently tight or fixed deadlines;
● a degree of uncertainty;
● and the need for interaction with real customers.

The research concluded that web projects require a project management approach that helps with:

● evolving requirements;

● putting focus on the end‑ customer

● collaboration between different skill sets;

● managing stakeholder expectations.

• Resource Allocation - after the initial WBS, appropriate resources can be allocated to
the tasks.
 • Schedule/plan – after resource allocation, the amount of time for each task can be
determine according to the availability and skills of the people assigned to the tasks.
Effort time is the total amount of work that needs to occur to complete a task. Elapsed
time indicates how long in time (such as calendar days) the task will take, and is
dependent on the number of people working on the task, and their skills.

• Monitoring and control – monitoring involves ensuring the project is working to plan
once it has started. Control is taking corrective action if the project deviates from the
plan.

PROTOTYPING
Prototyping - is a common approach to the development of digital business systems; its
essence is that it is:
• Rapid – Prototyping is part of a systems development approach known as ‘RAD – Rapid
Application Development’ since the time from inception to completion is reduced to
months rather than years.

• Simple – Skeleton applications are produced as prototypes that do not contain all the
functions of a system but are a framework which gives a good indication to users of
the information available and the look and feel of an application.

• Iterative – Prototypes are produced often at a frequency of one every few days or
weeks so that the comments from the last review can be fed into the evolving system.

• Incremental – Each prototype incorporates the feedback from the previous review, so
each version of the application has a limited number of new features.

• User-centered – Users are involved at all stages of development, in describing the

existing system, reviewing the prototypes and testing the system.

Agile Software Development

Agile development is the emphasis on face‑to‑face communication to define
requirements rather than detailed requirements specifications.

Scrum is a methodology that supports agile software development.

• Scrum involves the scrum master who is effectively a project manager, the product
owner who represents the stakeholders such as the business owners and customers,
and the scrum team which includes the developers.

We are uncovering better ways of developing software by doing it and helping others do it.
Through this work we have come to value:

• Individuals and interactions over processes and tools

• Working software over comprehensive documentation
 • Customer collaboration over contract negotiation
• Responding to change over following a plan

Human Resource Requirements

• Digital business project managers have a choice of building a new skill set within their
organization or outsourcing and partnering with other organizations.

Even more problematic than selecting the right type of staff is attracting and retaining
digital business staff. If we want effective, experienced staff then these will demand high
salaries. We will be competing for these staff with dot - com companies that are trying to
recruit and also other established medium‑to‑large companies that are looking to build a
digital business capability. Smaller companies will have an even trickier problem of needing
to find all of these skills rolled into one person!
Staff retention
The five intrinsic characteristics of a job are:

• 1 Skill variety
• 2 Task identity, how well the work is defined relative to other tasks and whether an
employee sees a job through ‘from start to finish’.
• 3 Task significance or the importance of the work.
• 4 Autonomy or freedom in completing work.
• 5 Feedback from employer.

To enhance these psychological characteristics Hackman and Oldham (1980) suggest the
following approaches can be used:
● Task combination – by combining tasks employees see more of the whole task.
● Natural workgroups – this also helps in task combination through creating a team to
complete tasks.

● Establish customer relations – this helps in task significance.

● Vertical loading – employees take responsibility for tasks completed by supervisors.
● Opening feedback channel – from internal or external customers, via managers where
necessary.
Certain types of collaboration referred to in the E‑consultancy (2005) report can assist with
staff sharing knowledge and experience:

• Co‑locating staff – including marketing staff in the digital team or e‑commerce staff in
the marketing team was mentioned.
• Job‑ swapping – a slightly different approach, which also involves co‑location, was
noted as effective.
• Interim collaborative teams (‘SWAT’ teams) – a temporary multidisciplinary team (for
example, teams from e‑commerce, marketing and technology) is formed to drive a
particular initiative or performance improvement, e.g. home page improvement, web
analytics or supporting customer journeys between channels. This approach is
reported to be used by amazon.

• Creation of a central ‘Centre of Excellence for Digital Marketing’ can provide a clear
resource which marketing staff can turn to for advice and best practice
documentation.

• Combined planning sessions – rather than the digital team developing a plan and then
discussing with the marketing team who may then incorporate it into their plan, a
more collaborative approach is used with both working on creating an integrated plan.

Outsourcing
The increased use of outsourcing marks a move towards the virtual organization. With the
introduction of electronic networks such as the Internet it becomes easier to outsource
aspects of the production and distribution of goods to third parties. Hallowell (2001) notes
that the degree to which businesses can automate or outsource their human resources is
strongly dependent on the type and level of service expected for a particular type of product.
This can be significant in governing their scalability or capacity for growth without taking on
additional staff. He says that customer services in e‑commerce are:
described as ‘virtual’ (either pure information or automated) and ‘physical’ (requiring some
degree of human intervention) . . . because the nature and quantity of physical ser ‑ vice
necessary to deliver value to customers influences the quantity of human intervention
required, it also influences a firm’s ratio of variable to fixed costs, which alters its ‘scalability’.
The paradox comes in that while reduced scalability is viewed negatively by many venture
capitalists and proponents of ecommerce, the cause of that reduction in scalability, human
intervention, may help a firm to differentiate its offering to customers, thus providing a source
of competitive advantage.
This issue has been considered by Parsons et al. (1996) from a s ell - side e‑commerce
perspective. They recognize four stages in the growth of what they refer to as ‘the digital
marketing organization’:

• Ad hoc activity . At this stage there is no formal organization related to e‑commerce

and the skills are dispersed around the organization.
• Focusing the eff ort. At this stage, eff orts are made to introduce a controlling
mechanism for Internet marketing. Parsons et al. (1996) suggest that this is often
achieved through a senior executive setting up a steering group which may include
interested parties from marketing and IT and legal experts.
• Formalization. At this stage the authors suggest that Internet marketing will have
reached a critical mass and there will be a defined group or separate business unit
within the company which manages all digital marketing.
• Institutionalizing capability. Th is stage also involves a formal grouping within the
organization, with formal links created between digital marketing and a company’s
core activities

Senior management involvement

Cope and Waddell (2001) have assessed the role of leadership style in e‑commerce
implementations. They assessed the most common approaches to e‑commerce
implementation, distinguishing between these approaches:
● Collaborative – widespread participation of employees occurs to define the changes
required and techniques to achieve them.
● Consultative – management takes the final decision, after calling on some employees for
input.
● Directive – the management team takes the decisions, with the employees generally
trusting them to do so and being generally informed.
● Coercive – the management team takes the decision with very limited recourse to
employees.
For digital business implementation these roles will need to be identified for each
implementation project as well as the overall change. A more detailed change model proposed
by Jay and Smith (1996) identifies four phases:
➢ 1 Initial orientation. In the orientation phase, it is necessary that there be a clear under‑
standing of the reasons for bringing about change. This should be identified as part of the
digital business, digital marketing or SCM strategies.
➢ 2. an analysis of the environment within which the change is to take place. This includes
an identification of the critical success factors for change along with a threat analysis.
➢ 3.Change implementation. In the third phase, Jay and Smith suggest that the changes are
implemented by piloting the change, introducing the new procedures, conducting
training and finally rolling out the change.
➢ 4.A supportive phase. In the final phase, the change must be stabilized. This means that
management must openly commit itself to the change and fine-tune or adjust procedures
where necessary.
Boddy et al. (2001) summarize four different types of cultural orientation that may be
identified in different companies:
1. Survival (outward‑looking, flexible) – the external environment plays a significant role (an
open system) in governing company strategy. The company is likely to be driven by customer
demands and will be an innovator. It may have a relatively flat structure.
2. Productivity (outward‑looking, ordered) – interfaces with the external environment are well
structured and the company is typically s ales‑d riven and is likely to have a hierarchical structure.
3. Human relations (inward‑looking, flexible) – this is the organization as family, with inter‑
personal relations more important than reporting channels, a flatter structure and staff
development, and empowerment is thought of as important by managers.
4. Stability (inward‑ looking, ordered) – the environment is essentially ignored, with managers
concentrating on internal efficiency and again management is through a hierarchical structure.

What is knowledge?
Knowledge
is the combination of data and information, to which is added expert opinion, skills and
experience, to result in a valuable asset which can be used to aid decision making Knowledge
may be explicit and/or tacit, individual and/or collective.
Knowledge Management
is the management of activities and processes for leveraging knowledge to enhance
competitiveness through better use and creation of individual and collective knowledge
resource.

Theorists have identified two different types of knowledge, and different approaches can be
used to disseminate each type of knowledge within an organization:
1. Explicit – details of processes and procedures. Explicit knowledge can be readily detailed in
procedural manuals and databases.
2. Tacit – less tangible than explicit knowledge, this is experience on how to react to a situation
when many different variables are involved.
3. Store knowledge. Mekhilef et al. (2004). point out that much knowledge is typically ‘stored’ in
people’s brains and so will often remain there as ‘tacit knowledge’. Knowledge can also be
embedded or become part of the ‘organizational memory’ through revising processes that form
team routines. Storing explicit knowledge requires a structured approach to selecting, updating,
organizing or categorizing knowledge within information systems.
4. Share knowledge. This increases knowledge availability to ensure it is available in the right
context – ie. for the right person, at the right time to support their current activity.
5. Use knowledge. Since a lot of knowledge remains under‑ utilized, the authors suggest
that the purpose of this stage is to ensure that all effort that is spent in the previous
activities pays off! It also involves managing further additions to the knowledge base.
Objectives of knowledge management
The reasons for moving to knowledge management are highlighted by a 1999 IDC survey
from when the approach first came to prominence. The main reasons, which you can see
are still relevant today, given by 355 US IS manager respondents were:

• Improving profit/growing revenue (67%)

• Retaining key talent/expertise (54%)
• Increasing customer retention and/or satisfaction (52%)
• Defending market share against new entrants (44%)
• Gaining faster time to market with products (39%)
• Penetrating new market segments (39%)
• Reducing costs (38%)
• Developing new products/services (35%).

Implementing knowledge management

The reasons for difficulties in moving to knowledge management (KM) are also highlighted
by the 1999 IDC survey. The main problems, which are again still relevant, are:

• Lack of understanding of KM and its benefits (55%)

• Lack of employee time for KM (45%)
• Lack of skill in KM techniques (40%)
• Lack of encouragement in the current culture for sharing (35%)
• Lack of incentives/rewards to share (30%)
• Lack of funding for KM initiatives (24%)
• Lack of appropriate technology (18%)
• Lack of commitment from senior management (15%).

Technologies for implementing knowledge management

The implementation of digital business applications can support knowledge management
through providing different applications which support the five different steps of
knowledge management described above. Binney (2001) identifies six different classes of
KM applications as follows:
1. Transactional. Helpdesk and customer service applications.
2. Analytical. Data warehousing and data mining for CRM applications.
3. Asset management. Document and content management.
4. Process support. Total quality management, benchmarking, BPR, Six Sigma (see
www. isixsigma.com for further information).
5. Developmental. Enhancing staff skills and competencies – training and e‑learning.
6. Innovation and creation. Communities, collaboration and virtual teamwork.
Chaffey and Wood (2005) point out that intranets tend to have three stages of
sophistication for knowledge management:
1 Static. Basic web pages stored on a web server. Information publishing is centrally con‑
trolled. Employees browse and search for information but do not interact
2 Interaction. The intranet evolves into a dynamic environment developing around the
knowledge needs of employees.
3 Collaborative electronic workspace. The intranet becomes a ‘self‑ service’ environment
where all employees are empowered to share knowledge via publishing mechanisms and
collaborative tools.
What is social business?
Social business

specialist Hamill (2012) says that these two quotes show its essence. Dion Hinchcliffe
and Peter Kim, authors of Social Business by Design, say:
Social media touches the entire organization, every department and every business
process, every channel, every customer interaction, every investor and supplier
relationship. Social is too important to be left to the Marketing Department.