1. Chapter 10 Change management

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.

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?

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.

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

6. Figure 10.1 Key factors in achieving change

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

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

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

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

11. 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

12. 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

13. 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.

14. 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

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

16. Figure 10.4 Stages in developing an e-business solution

17. 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

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

19. Prototyping
Rapid
Simple
Iterative
Incremental
User-centred

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

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

22. Outsourcing
Outside-in
Inside-out

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

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

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

26. 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

27. 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.

28. 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.

29. Figure 10.9 Knowledge management framework

30. KM framework Identify knowledge Create new knowledge Store knowledge
Share knowledge
Use knowledge

31. 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).

32. 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.

33. 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

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

35. Activity – identify risks for e-business project
Probability
Impact
Solution
Insufficient senior management commitment 5 7
Education/training/lobbying by e-business manager to achieve buy-in
High staff turnover/key staff leave 6
Use monetary incentives and improve working environment
Project milestones not met, overrun budget 8
Appoint 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)
Allow sufficient time for volume, performance testing
Staff resistance to change 4
Education, training identification of change facilitators amongst staff
Problem with integrating with partner’s systems (e.g. customers or suppliers)
Tackle these issues early on, identify one contact point/manager for each of partnerships
New system fails after changeover (too slow or too many crashes) 9
See solution to delayed implementation