managing it projects, process improvement and organizational change

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Chapter 14 Managing IT Projects, Process Improvement, and Organizational Change Information Technology for Management Improving Performance in the Digital Economy 7th edition John Wiley & Sons, Inc. Slides contributed by Dr. Sandra Reid Chair, Graduate School of Business & Professor, Technology Dallas Baptist University:

Chapter 14 Managing IT Projects, Process Improvement, and Organizational Change Information Technology for Management Improving Performance in the Digital Economy 7 th edition John Wiley & Sons, Inc. Slides contributed by Dr. Sandra Reid Chair, Graduate School of Business & Professor, Technology Dallas Baptist University Turban and Volonino 14-1

Chapter Outline:

Chapter Outline 14.1 Adopting IT Projects 14.2 Implementing IT Projects 14.3 Business Process Management 14.4 Change Management and Organizational Transformation 14.5 Managerial Issues 14-2

Learning Objectives:

Learning Objectives Understand the concept of the technology adoption lifecycle. Describe the five stages of the adoption lifecycle. Understand the impact of technology, task, individual, organizational and environmental characteristics on the adoption of new technologies. Describe Rogers’ five adopter categories. Understand typical causes for IT implementation failures. 14- 3

Learning Objectives – cont’d:

Learning Objectives – cont’d Discuss challenges associated with implementing IT projects. Understand the concept of business process management (BPM) and how it can be used to enhance effectiveness in an organization. List and describe the steps in creating an effective BPM strategy. Describe the role of change management in systems implementation. 14- 4

Slide 5:

Problems – complex payroll data for 15,000 drivers handled manually; delays, losses, inaccuracies were common due to handwritten documents. Poor morale, extended hours, frustration was rampant. Solutions –character-recognition system. 99.9% success rate. ROI 1 year. Results – problems eliminated. 2008 CIO 100 award for use of innovative technologies to generate business value. 14- 5

Slide 6:

14- 6 14.1 Adopting IT Projects

Elements of Technology Adoption:

Elements of Technology Adoption Technology itself. Communication channels through which information is exchanged between potential adopters. Speed at which emerging technology is being adopted. Social system into which innovation is introduced that can be influenced by internal opinion leaders & external change agents. Social system can be a big stumbling block if the users are not receptive, uninvolved; top management must champion the technology 14- 7 User Acceptance of Information Technology: Toward a Unified View

Figure 14.1 - non-linearity process of adoption. If something is missing at the persuade stage, one might drop back to acquire knowledge & proceed when enough has been gathered. It is not linear; it is cyclical.:

Figure 14.1 - non-linearity process of adoption. If something is missing at the persuade stage, one might drop back to acquire knowledge & proceed when enough has been gathered. It is not linear; it is cyclical. 14- 8 IT adoption process. (Source: Drawn by C. Pollard.)

Technology Differences:

Technology Differences Compatibility – degree perceived to fit with existing values, past experiences & needs of potential adopters. Complexity – degree perceived to be difficult to understand & use. Reliability – extent new system is robust & dependable. Relative advantage – degree perceived to be better than existing system. Important to assess what happens if we do adopt & what happens if we don’t. Often if an organization does not adopt the technology, or at least an updated one, there may be a significant competitive disadvantage. This may lead to organizational stagnation & may render the organization unhealthy eventually. The adoption proposal may be so disruptive to the organization that it is unwise to implement at this particular time, or at all. 14- 9

Task Differences:

Task Differences Ability of a technology to efficiently & effectively execute a task. Appropriateness of the application to needs. 14- 10

Table 14.1:

Table 14.1 14- 11 Managers influence adoption by visibly supporting. Users have to embrace the change or it won’t happen, certainly not effectively. Employees must see potential benefit to THEM if they do adopt the new technology. Leaders, from the top down, must communicate effectively; vision must be clear.

Figure 14.2:

Figure 14.2 Copyright 2010 John Wiley & Sons, Inc. 14- 12 Adopter category distribution. - Many people are not innovators or early adopters which is indicated in this figure. We can expect roughly 50% of people to be late majority or laggard adopters. This means that ½ of the general population is slow to adopt new technology.

Organizational Differences:

Organizational Differences Not all organizations are capable of providing same level of support to assist in introduction of new technology. Larger organizations are usually best equipped to have highly skilled technology specialists & most up-to-date information. Small organizations are often most agile & can move faster to adopt. 14- 13

Critical Success Factors:

Critical Success Factors Planning at all stages, with necessary adjustments along the way, is critical to success. Supportive IT infrastructure refers to physical equipment & provision of appropriate personnel. Management support is essential. Presence of a champion to promote benefits. 14- 14

Environment Differences:

Environment Differences Vendor maturity & availability will differ depending upon system. Customer-base may be diverse. Industry & geographical location will be factors. Vendor support & training will differ. Customer skill level & accessibility to online services will be different. 14- 15

Table 14.2 - The most important differences that influence the adoption of a new system:

Table 14.2 - The most important differences that influence the adoption of a new system 14- 16

Figure 14.3:

Figure 14.3 14- 17 Check out this article for more: Gartner Emerging Technologies Hype Cycle Gartner 2007 emerging technologies hype cycle. (Source: Gartner Inc.)

Figure 14.4:

Figure 14.4 14- 18 Sample priority matrix based on 2007 hype cycle data.

Table 14.3 - Publications & websites such as Information Week, CIO, BusinessEdge, SaaStream, ITToolbox, Computerworld & others are available to all. :

Table 14.3 - Publications & websites such as Information Week, CIO, BusinessEdge , SaaStream , ITToolbox , Computerworld & others are available to all. 14- 19

Slide 20:

14- 20 14.2 Implementing IT Projects

Implementation Roadmap:

Implementation Roadmap Infrastructure provides foundation for IT applications in enterprise. I.e.: data center, networks, data warehouse, & corporate knowledge base. IT applications are specific systems & programs for achieving certain objectives. I.e.: providing payroll or taking customer orders. Involves change in current business processes. Change-over must be well planned. 14- 21

Figure 14.5:

Figure 14.5 14- 22 The for P’s of implementation.

(Continue):

(Continue) May depend upon size of the system, scope of change, complexity, organization context: Plunge is high risk because there may be problems that surface not previously known. May be best, however, if time is critical such as governmental mandates. Parallel is less risky because both operate simultaneously. Major flaws can be identified & dealt with prior to shutting down existing system. Higher costs, of course, are associated with this approach as both systems are running. Pilot is used when a system is intended for adoption & implementation in more than 1 business unit or geographic location. Can use either the plunge or parallel approach in the pilot. System then is rolled out after any flaws have been corrected. Phased approach is based on the module or version concept. Each is implemented as it is developed & tested. Can be used in concert with the plunge and/or parallel approaches. Useful strategy is to implement key modules first using the plunge approach (sales, purchasing, materials planning) & then peripheral modules such as HR. 23

Success & Failure of IT Implementations:

Success & Failure of IT Implementations Failures range from 30 to 70%. ERP & CRM implementations are especially prone to failure due to scope & magnitude of change. Processes must typically be restructured. Skill sets may need to be changed. Locus of control may need to change. Communication is essential & key. Majority fail from lack of top management support; lack of funding; scope increase; lack of user involvement. 14- 24

Factors That Impact Implementation Success:

Factors That Impact Implementation Success Top management support – resource allocation, upper level model of acceptance. Level of risk – depends upon project size, project structure & complexity of effort. Training of users – critical to success. User acceptance – users must be involved in design & throughout process. Management of process – must be with incentives. 14- 25

Managing Implementation:

Managing Implementation Must be within budget. Must be on time. Must meet user expectations. Must be fully functional, to the level promised. 14- 26

Slide 27:

14- 27 14.3 Business Process Management

Concept of BPM:

Concept of BPM Includes methods & tools to support design, analysis, implementation, management & optimization of operational business processes. Extension of workflow management: documents, information & activities flow between participants according to existing process models & rules. Consists of activities performed by businesses to optimize & adapt their processes. Consist of designing, analyzing, implementing, managing & optimizing a process for effectiveness & efficiency. 14- 28

Figure 14.6 – BPM companies improve profitability by decreasing costs & increasing revenues. Helps create competitive advantage by improving organizational agility. Involves use of IT & other tools to model, measure, manage & improve core business processes to be more competitive & to serve customers better. :

Figure 14.6 – BPM companies improve profitability by decreasing costs & increasing revenues. Helps create competitive advantage by improving organizational agility. Involves use of IT & other tools to model, measure, manage & improve core business processes to be more competitive & to serve customers better. 14- 29 Business process management cycle.

Figure 14.7 - BPM is technique that ties people, processes & technology to strategic performance improvement goals.:

Figure 14.7 - BPM is technique that ties people, processes & technology to strategic performance improvement goals. 14- 30 BPM focus.

Creating a BPM Strategy:

Creating a BPM Strategy Conduct thorough assessment of core strategic & operational processes to identify those processes that need to be improved. Develop a process performance plan that documents ways in which identified operational processes contribute to strategic goals. Prioritize with highest priority given to processes with greatest potential impact on strategic objectives. 14- 31 Dynamic Business Apps: Design For People, Build For Change

Table 14.4 - Focus on desired outcomes, not people. :

Table 14.4 - Focus on desired outcomes, not people. 14- 32

Figure 14.8 - BPM strategy is that managing business processes is an activity that is not limited to the organization itself, but instead extends beyond the internal & external walls of the enterprise :

Figure 14.8 - BPM strategy is that managing business processes is an activity that is not limited to the organization itself, but instead extends beyond the internal & external walls of the enterprise 14- 33 BPM without boundaries.

Business Process Modeling:

Business Process Modeling Referred to as business process mapping. Includes techniques & activities used as part of larger business process management discipline. Similar to drafting a blueprint for a house. Must create a blueprint of how company works now & will after implementation. 14- 34

Measuring Processes:

Measuring Processes Six Sigma – methodology to manage process variations that cause defects & to systematically work toward managing variation to prevent those defects. TQM – management strategy aimed at embedding awareness of quality in all organizational processes. ISO – key is development of plan to prevent non-conforming process from being repeated. 14- 35

Figure 14.9:

Figure 14.9 14- 36 Evolution of BPM software tools.

Table 14.5 - BPMS market is big business, $1.7B in total software revenue in 2006. :

Table 14.5 - BPMS market is big business, $1.7B in total software revenue in 2006. 14- 37

Slide 38:

14- 38 14.4 Change Management and Organizational Transformation

Concept of Change Management:

Concept of Change Management Structured approach from current to desired state. Avoiding user resistance to business & system changes. Addresses differences in perspectives of partners. Involves compromise. 14- 39 Secret of Change Management - motivation, leadership skills, development, styles and business strategy - motivational conference keynote speaker - speech by Patrick Dixon

Key Stakeholders May…:

Key Stakeholders May… Withhold resources. Purposely identify wrong people to work on project. Raise continual objections to project requirements. Change project requirements. Expand size & complexity of project. 14- 40

Change Process Models:

Change Process Models Structured technique to effectively transition groups or organizations through change. Provide a framework for managing the people side of change. Most are based on simple three-stage model originally theorized by Kurt Lewin: unfreezing, change, & refreezing. 14- 41

Figure 14.10:

Figure 14.10 14- 42 Lewin’s three-stage change process. Theorized by Kurt Lewin. Unfreeze – people are in their comfort zones. Managers must move employees toward the next stage. Change – refers to transition. Journey rather than step according to Lewin. Time needed depends upon extent of change required. Refreezing – move to the desired state, new place of stability. May be temporary because business involves rapid change typically.

Kotter’s Organizational Transformation Model:

Kotter’s Organizational Transformation Model Establish sense of urgency. Form powerful guiding coalition. Create vision. Communicate vision. Empower others to act on vision. Plan for & create short-term wins. Consolidate improvements & produce more change. Institutionalize new approaches. 14- 43

10 Principles of Change Management:

10 Principles of Change Management 14- 44 Address human side of change systematically. Adapt often as circumstances change. Start at the top. Top managers must show full support. Must be role models. Involve every layer. Change occurs at all levels of the organization. Change cascades down. Make the formal case. Need for change will be challenged. Create ownership. Leaders must be willing to accept responsibility for achieving the change.

10 Principles of Change Management – cont’d:

10 Principles of Change Management – cont’d Communicate the message. Repeatedly provide the right information at the right time to the right people through multiple channels. Assess the cultural landscape. Core cultural values, behaviors, & perceptions must be addressed up front, in regard to readiness for change, identify conflict areas & define factors that can impact resistance. Address culture explicitly. Address head on once understood. Prepare for unexpected. No matter how well planned, there will be surprises. Speak to the individual. Real change only occurs at the individual level. 14- 45 Check this out for more about this important topic - 10 Principles of Change Management

Slide 46:

14- 46 14.5 Managerial Issues

Managerial Issues:

Managerial Issues Global & cultural – change could result in problems associated with ways different people interact that are culturally based. Ethical & legal – consider the people impacted by change. May include need for layoffs, retraining, transfer of employees. What should be done in terms of advance communication? What about older employees? 14- 47

Managerial Issues – cont’d:

Managerial Issues – cont’d User involvement – functional managers should be involved throughout the process. Change management – do not ignore impact upon culture. Risk management – risk is high. 14- 48

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