1.  Why the need for change  Consultant’s Approach to OCM  How OCM fits into the picture  What is OCM  Workplan and Deliverables for the OCM project  Looking into the future Organizational Change Management

2. Presentation Objectives  Introduce Concept of Change Management  Outline key aspects of Consultant’s Organisational Change Management (OCM) approach  Demonstrate how Consultant’s OCM approach will add value by supporting the broader MIS upgrade  Confirm the project scope for the OCM project  Agree on key deliverables for Phase 1 (expected completion - March)

3. Why the need for change? “ When the rate of change outside exceeds the rate of change inside, the end is in sight” John F. Welch, Jr. Chairman / CEO General Electric Co. PRESSURE FROM WTO TO LIBERALISE FINANCIAL MARKETS COMPETITION FROM MORE ESTABLISHED COMMERCIAL BANKS BANK NEGARA REQUIREMENTS CHANGES IN CUSTOMER NEEDS, DIRECT BANKING AND INTERNET BANKING

4. Consultant’s Approach to OCM s Centralisation of IT infrastructure s Reduce duplication s Increase processing response times s Reduce IT maintenance costs s Adoption of Best Practice banking Process PRESSURE FROM WTO TO LIBERALISE FINANCIAL MARKETS COMPETITION FROM MORE ESTABLISED COMMERCIAL BANK BANK NEGARA’S REQUIREMENTS CHANGES IN CUSTOMER NEEDS, DIRECT BANKING AND INTERNET BANKING

5. Consultant’s Approach to OCMTechnology Process PRESSURE FROM WTO TO LIBERALISE FINANCIAL MARKETS COMPETITION FROM MORE ESTABLISED COMMERCIAL BANK BANK NEGARA’S REQUIREMENTS CHANGES IN CUSTOMER NEEDS, DIRECT BANKING AND INTERNET BANKING s Centralisation of IT infrastructure s Reduce duplication s Increase processing response times s Reduce IT maintenance costs s Adoption of Best Practice banking s Direct Banking s RBS, Financial & Treasury (Phase 1) s Remittances, ATMs s Internet Banking

6. Consultant’s Approach to OCM?PeopleTechnology Process PRESSURE FROM WTO TO LIBERALISE FINANCIAL MARKETS COMPETITION FROM MORE ESTABLISED COMMERCIAL BANK BANK NEGARA’S REQUIREMENTS CHANGES IN CUSTOMER NEEDS, DIRECT BANKING AND INTERNET BANKING s Centralisation of IT infrastructure s Reduce duplication s Increase processing response times s Reduce IT maintenance costs s Adoption of Best Practice banking s Direct Banking s RBS, Financial & Treasury (Phase 1) s Remittances, ATMs s Internet Banking s Resilience to change s Commitment to change s Greater skills and competencies

7. How does OCM fit into the Picture? TRAINING & DOCUMENTATION TRAINING & DOCUMENTATION DEPLOYMENT USER ACCEPTANCE TESTING TESTING IT INFRASTRUCT IT INFRASTRUCT FUTUREITENVIRONMENTFUTUREITENVIRONMENT PROGRAMME MANAGEMENT OFFICE RETAIL BANK - Analysis & Customisation RETAIL BANK - Analysis & Customisation RETAIL BANK - Data Conversion RETAIL BANK - Data Conversion FINANCIAL SYSTEMS FINANCIAL SYSTEMS TREASURY EXEC INFO SYSTEM EXEC INFO SYSTEM Analysis, Customisation & Data Conversion ORGANISATIONAL CHANGE MANAGEMENT

8. Benefits of this approach  Integration with the PMO and all initiatives associated with the MIS Upgrade Project  Greater understanding of dependencies between projects  Greater understanding of the technology and process impact  Structured and objective approach to analysis / diagnosis  Greater co-ordination of resources

9. What is Organisation Change Management? Change Readiness Acceleration Change Leadership Development Performance Lever Gap Analysis Stakeholder Involvement Strategies Culture and Values Alignment Transition Planning and Management Team Development Organisational Learning Clear and Compelling Business Case for the Change Engaged, Skilled Change Leaders and Sponsors Accelerated Change Readiness Flexible and Adaptive Workforce Leverage Learning Capability FocusOutcome A structured approach that helps manage the people components during a business transformation initiative to realise the desired outcomes A structured approach that helps manage the people components during a business transformation initiative to realise the desired outcomes

10. Why the need for Change Management? SOLUTION IDENTIFICATION WRONGRIGHT SOLUTION IMPLEMENTATION EFFECTIVE INEFFECTIVE I III IV II 70% of occurrences 10% of occurrences The value of MIS Upgrade Project is realised only through successful implementation Cell Impact on Desired Business Objectives Impact on Desired Business Objectives I I Failure II Failure III Failure IV Success

11. Why efforts fail PERCEPTION TECHNOLOGYINFRASTRUCTURE MANAGEMENT OF CHANGE

12. Why efforts fail PERCEPTION TECHNOLOGY REALITY INFRASTRUCTURE MANAGEMENT OF CHANGE

13. Commitment versus Compliance  Commitment building costs are significantly less than the cost of: s managing post-implementation resistance s compromised implementation efforts s project failure Pay now... or pay later?

14. Commitment versus Compliance  Commitment is a powerful phenomenon in transition management  Commitment generates productive behaviour without the need for monitoring  Compliance may result in similar behaviour, but rarely generates initiative. Compliance strategies rely on external enforcement

15. Detailed Workplan Proposed Approach to Organisational Change Management Phase 1

16. Change Readiness AssessmentWhatWhat HowHow BenefitBenefit Value of Approach Approach Identifies key factors which may help or hinder the change process and is used to determine BIMB’s readiness to change. Action plans can then be developed to leverage strengths and minimise potential risks. Identifies key factors which may help or hinder the change process and is used to determine BIMB’s readiness to change. Action plans can then be developed to leverage strengths and minimise potential risks. A series of one day workshops delivered to a select number of staff representing identified stakeholder groups. Surveys and other tools will be used to identify potential risks to MIS implementation. A series of one day workshops delivered to a select number of staff representing identified stakeholder groups. Surveys and other tools will be used to identify potential risks to MIS implementation. 4Action plans to address implementation issues 4Greater ownership and awareness of MIS Upgrade Project 4Action plans to address implementation issues 4Greater ownership and awareness of MIS Upgrade Project 4Structured approach to identify potential implementation risks 4Consistent application of E&Y world-wide OCM tools 4Objective methods to determine potential implementation risks 4Involvement of stakeholder groups throughout Bank 4Comparison of perceived risks across management levels and locations 4Comparison of perceived risks over time 4Structured approach to identify potential implementation risks 4Consistent application of E&Y world-wide OCM tools 4Objective methods to determine potential implementation risks 4Involvement of stakeholder groups throughout Bank 4Comparison of perceived risks across management levels and locations 4Comparison of perceived risks over time

17. Change Readiness Assessment Powerful Business Case Vision Clarity Change Leadership & Accountability Change Specific Communication Integrated Planning & Teams Increased Change Capability Aligned Performance & Culture Stakeholder Commitment Implementation Factors for Success...

18. Communications Strategy and Plan Value of Approach Approach Determines the strategies, goals, themes, messages and vehicles used to communicate with key stakeholders (internal and external) throughout the duration of the MIS Upgrade Project. Determines the strategies, goals, themes, messages and vehicles used to communicate with key stakeholders (internal and external) throughout the duration of the MIS Upgrade Project. Working directly with Project Teams and Task Force staff, drawing on the results of the Change Readiness Assessment and using Consultant’s methods to identify most appropriate communications methods. Working directly with Project Teams and Task Force staff, drawing on the results of the Change Readiness Assessment and using Consultant’s methods to identify most appropriate communications methods. 4Accelerates contact, awareness, understanding and acceptance of the intended changes 4Reduces stakeholder resistance resulting in positive action (thinking and behaviour) 4Greater ownership and awareness of MIS Upgrade Project 4Accelerates contact, awareness, understanding and acceptance of the intended changes 4Reduces stakeholder resistance resulting in positive action (thinking and behaviour) 4Greater ownership and awareness of MIS Upgrade Project 4Structured approach to develop communication plans 4Consistent application of Consultant’s world-wide OCM tools 4Greater re-use of data collected during Change Readiness Assessment 4Structured approach to develop communication plans 4Consistent application of Consultant’s world-wide OCM tools 4Greater re-use of data collected during Change Readiness Assessment WhatWhat HowHow BenefitBenefit

19. Communications Building Commitment Through Communications is a process... Time Preparation Phase Acceptance Phase Communication Phase Grudging Compliance Formal Compliance Genuine Compliance Installation Commitment/ Compliance Threshold Disposition Threshold Adoption Institutionalization Internalization Understand the Change Positive Perception Understand the Change Awareness I Contact Noncommitment OC160

20. Change Facilitator Network Value of Approach Approach Establishing an internal network of change champions to build awareness and understanding of change management principles. Establishing an internal network of change champions to build awareness and understanding of change management principles. Network is established initially by involving client staff in a one day workshop to explore business change principles and concepts within the context of the MIS Upgrade Project. Network is established initially by involving client staff in a one day workshop to explore business change principles and concepts within the context of the MIS Upgrade Project. 4Establishing a change infrastructure of staff who will promote the Bank MIS Upgrade Project 4Generating greater communication across the branch network 4Involvement of those most affected by the changes 4Greater understanding of change and their important role in the process 4Establishing a change infrastructure of staff who will promote the Bank MIS Upgrade Project 4Generating greater communication across the branch network 4Involvement of those most affected by the changes 4Greater understanding of change and their important role in the process 4Structured approach to managing change 4Opportunities for testing management potential 4Build on Change Readiness Assessment results 4Develop a link to customer facing staff in the branches 4Opportunities for breaking down barriers between branches 4Structured approach to managing change 4Opportunities for testing management potential 4Build on Change Readiness Assessment results 4Develop a link to customer facing staff in the branches 4Opportunities for breaking down barriers between branches WhatWhat HowHow BenefitBenefit

21. Change Facilitator - Tips  Involve those most impacted by the changes  Develop objective method for selecting candidates  Select staff of equivalent seniority  Select staff who are: s well regarded by their peers s credible s reliable s eager to learn and be involved s “opinion leaders”  Do not select staff: s who are perceived to be management mouthpieces

22. Transition Management Plan Value of Approach Approach Incorporates data gathered during the Change Readiness Assessment, Change Facilitator workshops and communication planning stages to produce a comprehensive roadmap addressing the human aspects of change for the duration of the project. It will also provide other people related issues which are beyond the scope of Phase 1. Incorporates data gathered during the Change Readiness Assessment, Change Facilitator workshops and communication planning stages to produce a comprehensive roadmap addressing the human aspects of change for the duration of the project. It will also provide other people related issues which are beyond the scope of Phase 1. Working with project managers and the Task Force to thread together all relevant information. Working with project managers and the Task Force to thread together all relevant information. 4Provide a Blue Print for Bank to manage change beyond March 1998 4Provide further issues to consider to help align business needs with desired behaviour 4Provide a Blue Print for Bank to manage change beyond March 1998 4Provide further issues to consider to help align business needs with desired behaviour 4Structured approach to managing change 4Benefit of E&Y experience across similar IT enabled change projects 4Assistance with the identification of HR issues using Consultant’s Organisational Alignment methodology 4Structured approach to managing change 4Benefit of E&Y experience across similar IT enabled change projects 4Assistance with the identification of HR issues using Consultant’s Organisational Alignment methodology WhatWhat HowHow BenefitBenefit

23. Looking into the future STAFFING & DEPLOYMENT ALIGNED CULTURE ORGANISATIONAL STRUCTURE COMMUNICATION EDUCATION & DEVELOPMENT LEADERSHIP EFFECTIVENESS MEASUREMENT & REWARD

24. Looking into the future The value of Organisational Alignment  Drives organisational behaviour needed for process, technology and culture changes  Creates the environment where desired behaviours are communicated, modelled, measured and rewarded  Reinforces and sustains desired behaviours over time through alignment of human and organisational systems

25. Looking into the future Organisational Performance Levers Organisational Performance Levers Communication Education & Development Leadership Effectiveness Organisational Structure Measurement & Reward Staffing and Deployment Communication Education & Development Leadership Effectiveness Organisational Structure Measurement & Reward Staffing and Deployment Current State Behaviour Current State Behaviour Future State Behaviour Future State Behaviour n Act without consideration of other units and their purpose n Withhold information from others n Elevate issues / problems upwards for resolution n Discount all ideas “not invented here” n Focus on own needs rather than those of the organisation n Act without consideration of other units and their purpose n Withhold information from others n Elevate issues / problems upwards for resolution n Discount all ideas “not invented here” n Focus on own needs rather than those of the organisation n Work with other units to address problems and opportunities n Share information with others n Take initiative to solve problems n Search out and welcome new ideas n Focus on the needs of the company, the customers and other employees n Work with other units to address problems and opportunities n Share information with others n Take initiative to solve problems n Search out and welcome new ideas n Focus on the needs of the company, the customers and other employees