Slide 10.1 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 CHAPTER 10 CHANGE MANAGEMENT

Slide 10.2 Learning outcomes  Identify the different types of change that need to managed for e-commerce  Develop an outline plan for implementing e-commerce change  Describe alternative approaches to organizational structure resulting from organizational change.

Slide 10.3 Management issues  What are the success factors in managing change?  Should we change organizational structure in response to e-business? If so, what are the options?  How do we manage the human aspects of the implementation of organizational change?  How do we share knowledge between staff in the light of high staff turnover and rapid changes in market conditions?

Slide 10.4 Key change management issues  Schedule – what are the suitable stages for introducing change?  Budget – how do we cost e-business?  Resources needed – what type of resources do we need, what are their responsibilities and where do we obtain them?  Organizational structures – do we need to revise organizational structure?  Managing the human impact of change – what is the best way to introduce large-scale e-business change to employees?  Technologies to support e-business change – the role of knowledge management, groupware and intranets are explored.  Risk management approaches to e-business led change.

Slide 10.5 The challenges of e-business transformation  To help achieve change  Management buy-in  Effective project management  Action to attract staff  Employee ownership of change

Figure 10.1 Key factors in achieving change

Slide 10.7 The challenges of sell-side e-commerce The 7S strategic framework  Strategy  Structure  Systems  Staff  Style  Skills  Superordinate

Figure 10.2 Digital marketing activities that require management as sell-side e commerce Source: E-consultancy (2005)

Slide 10.9 Key Challenges of e-business marketing  Gaining buy-in and budget  Conflicts of ownership  Coordination with different channels  Managing and integrating customer info.  Achieving a unified reporting  Structuring the specialist digital team  In-sourcing vs. outsourcing online marketing  Staff recruitment and retention

Figure 10.3 The main challenges of managing sell-side e-commerce (n = 84) Source: E-consultancy (2005)

Slide Different types of change  Incremental – relatively small adjustment  Discontinuous – major transformation  Organizational – includes both incremental and discontinuous  Anticipatory – initiate change  Reactive – direct response to change

Slide Business process management  An approach supported by software tools intended to increase process efficiency by improving information flows between people as they perform business tasks  Continuous, incremental change

Slide Discontinuous Process Change  Hammer and Champy (1993) defined BPR as: 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.  Fundamental rethinking – re-engineering usually refers to changing of significant business processes such as customer service, sales order processing or manufacturing.  radical redesign – re-engineering is not involved with minor, incremental change or automation of existing ways of working. It involves a complete rethinking about the way business processes 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 processes operate in terms of the four important measures of cost, quality, service and speed.

Slide Emerging of new concepts  BPR often linked to downsizing  New terms emerged:  Business Process Improvement: Optimizing existing processes  Business Process Automation: Automating existing ways of working manually through information technology

Slide Planning Change  E-business projects need project governance  Effective project management must includes:  Estimation  Resource allocation  Schedule/plan  Monitoring and control

Figure 10.4 Stages in developing an e-business solution

Slide Differences with typical IS  The timescales for delivery of the system are compressed  The e-commerce system may be hosted outside  The focus of project is content and services  Once launched the site is more dynamic

Figure 10.5 An example web site development schedule for The B2C Company

Slide Prototyping  Rapid  Simple  Iterative  Incremental  User-centred

Slide Staff retention Hackman and Oldham (1980):  Skill variety  Task identity  Task significance  Autonomy  Feedback from employer

Figure 10.6 Typical structure and responsibilities for a large e-commerce team Source: E-consultancy (2005)

Slide Outsourcing  Outside-in  Inside-out

Slide Revising organizational structure Four stages of growth:  Ad hoc activity  Focusing the effort  Formalization  Institutionalizing capability

Table 10.4 Advantages and disadvantages of the organizational structures shown in Figure 10.7

Figure 10.8 Options for location of control of e-commerce Source: E-consultancy (2005)

Slide Approaches to managing change  Collaborative – widespread participation of employees  Consultative – management take final decisions  Directive – the management team takes the decisions  Coercive – the management team takes the decision with very limited recourse to employees

Slide Knowledge management – Saunders (2000) Every day, knowledge essential to your business walks out of your door, and much of it never comes back. Employees leave, customers come and go and their knowledge leaves with them. This information drain costs you time, money and customers.

Slide Explicit and tacit knowledge  Knowledge Management - Techniques and tools for capturing and disseminating knowledge within an organization.  Explicit – details of processes and procedures. Explicit knowledge can be readily detailed in procedural manuals and databases. Examples include records of meetings between sales representatives and key customers, procedures for dealing with customer service queries and management reporting processes.  Tacit – less tangible than explicit knowledge, this is experience on how to react to a situation when many different variables are involved. It is more difficult to encapsulate this knowledge, which often resides in the heads of employees.

Figure 10.9 Knowledge management framework

Slide KM framework 1. Identify knowledge 2. Create new knowledge 3. Store knowledge 4. Share knowledge 5. Use knowledge

Slide IDC – Objectives of KM  Improving profit/growing revenue (67 per cent)  Retaining key talent/expertise (54 per cent)  Increasing customer retention and/or satisfaction (52 per cent)  Defending market share against new entrants (44 per cent)  Gaining faster time to market with products (39 per cent)  Penetrating new market segments (39 per cent)  Reducing costs (38 per cent)  Developing new products/services (35 per cent).

Slide Binney – classes of KM applications 1. Transactional. Help desk and customer service applications. 2. Analytical. Data warehousing and data mining for CRM applications. 3. Asset management. Document and content management. 4. Process support. TQM, benchmarketing, BPR, Six Sigma. 5. Developmental. Enhancing staff skills, competencies – training and e-learning. 6. Innovation and creation. Communities, collaboration and virtual teamwork.

Slide Alternative tools for managing knowledge  Knowledge capture tools, e.g. mind maps  Knowledge sharing techniques, e.g. chat  Knowledge delivery tools, e.g.  Knowledge storage, e.g. database  Electronic document management system  Expert systems

Slide Risk management 1. Identify risks, including their probabilities and impacts. 2. Identify possible solutions to these risks. 3. Implement the solutions targeting the highest impact, most likely risks. 4. Monitor the risks to learn for future risk assessment.

Slide Activity – identify risks for e-business project RiskProbabilityImpactSolution Insufficient senior management commitment 57Education/training/lobbying by e-business manager to achieve buy-in High staff turnover/key staff leave 65Use monetary incentives and improve working environment Project milestones not met, overrun budget 86Appoint experienced project manager and provide support and resources needed. Manager will perform risk management such as this Problems with new technology delaying implementation (bugs, speed, compatibility) 88Allow sufficient time for volume, performance testing Staff resistance to change44Education, training identification of change facilitators amongst staff Problem with integrating with partner’s systems (e.g. customers or suppliers) 68Tackle these issues early on, identify one contact point/manager for each of partnerships New system fails after changeover (too slow or too many crashes) 9See solution to delayed implementation