Government Procurement in the Americas Conference October 28-29, 2015 Richard Hudson Evans Incorporated 1 Change Management the missing link in electronic procurement implementations

What is the main reason financial/procurement system implementations fail? 1.Project team not skilled 2.Lack of leadership commitment 3.Weak program planning 4.Institutional Resistance 5.Inappropriate technology 6.Inadequate Capacity to Sustain Richard Hudson Evans Incorporated 2

What is the main reason financial/procurement system implementations fail? 1.Inadequate Capacity to Sustain - 30 projects 2.Institutional Resistance – 23 projects 3.Weak program planning – 22 projects 4.Lack of leadership commitment – 17 projects 5.Project team not skilled – 17 projects 6.Inappropriate technology – 13 projects * Financial Management Information Systems, 25 Years Experience on what Works and What Doesn’t. Cem Dener, Joanna Watkins, William Dorotinsky Richard Hudson Evans Incorporated 3

What is change management? “The process of helping people understand the need for change and motivating them to take actions which result in sustained changes in behavior”. Richard Hudson Evans Incorporated4 Successful change management helps organizations and their people perform better Organizational Change Management is NOT Training on software An IT service management discipline Periodic communication on status of implementation Taking the Sponsor to dinner “Soft” or “Easy”

Why is change management important? 5Richard Hudson Evans Incorporated

The reality of change - Performance Richard Hudson Evans Incorporated6 P E R F O R M A N C E T I M E REALISTIC EXPECTED ACTUAL CHANGE INTRODUCED ACTUAL No Change Management REALIZED With Change Management Less disruption Faster change adoption Optimize results

The reality of change - People Richard Hudson Evans Incorporated7 Resistance Exploration Commitment Denial Preparation Acceptance

Change interventions 8 Opposing Forces Loss of Control Vested Interest Weak Integration Fear of Job Loss Limited Awareness Non Aligned Cultures Supporting Forces External Demand Fiscal Crises Change Champions Cross Departmental Communication Internal Efficiency Demands Technology Redundancy Clear Vision 1.Change Readiness 2.Leadership Commitment 3.Stakeholder Management 4.Effective Communication 5.Monitoring Impacts 6.Portfolio Management Successful change requires: Richard Hudson Evans Incorporated Time allows us to introduce only three of these

Leadership Commitment 9 What leadership support exists? Is it at the right level? How are you building on it? Requirements for Successful Change 1.Change Readiness 2.Leadership Commitment 3.Stakeholder Management 4.Effective Communication 5.Monitoring Impacts 6.Portfolio Management Richard Hudson Evans Incorporated

The top five mistakes top-level sponsors make during a major change 10 1.Failed to remain visible and actively demonstrate support 2.Failed to communicate messages about the need for the change 3.Failed to build a coalition of support 4.Assumed all employees were on- board regarding the change 5.Delegated or abdicated the sponsorship role Source: Best Practices in Change Management – 2012 Edition. Prosci, Inc Richard Hudson Evans Incorporated

Stakeholder Management - Addressing resistance 11 Requirements for Successful Change 1.Change Readiness 2.Leadership Commitment 3.Stakeholder Management 4.Effective Communication 5.Monitoring Impacts 6.Portfolio Management Resistance to change is to be expected Resistance must be channeled constructively and addressed directly – it cannot be ignored! Richard Hudson Evans Incorporated

Meet the Stake Holders Richard Hudson Evans Incorporated 12

Resistance - Starts with the individual 13 ThinkThink FeelFeel DoDo Awareness of need for change Understand and commit to change Translate thoughts and feelings into actions People don’t resist change, they resist being changed Richard Hudson Evans Incorporated

Which Group is the Most Resistant to Change? 1.Executives / Ministerial Levels 2.Senior-level Officials 3.Middle-level Managers 4.Front-line supervisors 5.Front-line employees 6.Other S14Richard Hudson Evans Incorporated

Which Group is the Most Resistant to Change? 1.Executives / Ministerial Levels ……. 5% 2.Senior-level Officials ……..………... 12% 3.Middle-level Managers …..……….…. 37% 4.Front-line supervisors ………………... 16% 5.Front-line employees ……….……….. 24% 6.Other ……………………………………..…... 6% 15 Source: A global survey of private and public sector from Best Practices in Change Management – 2012 Edition. Prosci, Inc Richard Hudson Evans Incorporated

Addressing resistance 16 Change must be led and managed by staff within the impacted organizations Leaders Middle Management Front-Line Staff Civil Service Executives POLITICAL APPOINTEES Slide 16 of 15 Middle Management must become agents for change Richard Hudson Evans Incorporated

Communications Richard Hudson Evans Incorporated 17 Requirements for Successful Change 1.Change Readiness 2.Leadership Commitment 3.Stakeholder Management 4.Effective Communication 5.Monitoring Impacts 6.Portfolio Management Sources of Poor Communications: Inconsistent messages Not addressing why Difficulty engaging with everyone Long gaps between communications Poor timeliness with regards to what is actually happening

I. Contact II. Awareness III. Understand V. Adopt VI. Institutionalize IV. Install Unaware Confusion Negative Perception Lack of Support Change Abandoned Preparation Acceptance Commitment Degree of Support for the change Time Change Communications – Checking in or out? 18Richard Hudson Evans Incorporated

From whom do employees prefer to hear communications about the organizational need for change ? 1.CEO/Minister 2.Executive/ Senior Official 3.Department Head 4.The Employee’s Supervisor 5.Human Resources Representative 6.Project Team Lead 7.Change Management Team Richard Hudson Evans Incorporated 19

Slide 20 of 15 From whom do employees prefer to hear communications about the organizational need for change ? 1.CEO/Minister …..……………………………. 47% 2.Executive/ Senior Official ……………. 31% 3.Department Head ….……………………….. 7% 4.The Employee’s Supervisor ……………… 4% 5.Human Resources Representative …… 3% 6.Project Team Lead ……………….………… 2% 7.Change Management Team …….……… 0% Richard Hudson Evans Incorporated 20 Source: Best Practices in Change Management 2012 Edition. Prosci, Inc

From whom do employees prefer to hear communications about how a change affects them personally? 1.CEO/Minister 2.Executive/ Senior Official 3.Department Head 4.The Employee’s Supervisor 5.Human Resources Representative 6.Project Team Lead 7.Change Management Team Richard Hudson Evans Incorporated 21

From whom do employees prefer to hear communications about how a change affects them personally? 1.CEO/Minister …….……………………………. 4% 2.Executive/ Senior Official..……………. 6% 3.Department Head ………………..………... 10% 4.The Employee’s Supervisor ……………… 69% 5.Human Resources Representative ….. 3% 6.Project Team Lead ……………..………….. 2% 7.Change Management Team ……………... 3% Richard Hudson Evans Incorporated 22 Source: Best Practices in Change Management 2012 Edition. Prosci, Inc

Impact of development approach on change management Custom More Familiar (if automate current) Easier to Sustain Richard Hudson Evans Incorporated 23 COTS Proven Solutions User Groups But the lines between Custom & COTS are blurring…… Major Critical Success Factors are: - Leadership commitment - Engaged stakeholders - Effective communications - Readiness for change

Change Management - Common Pitfalls Richard Hudson Evans Incorporated24 PlanningExecution Start lateOnly focus on the rational Program design fails to include change Not dealing proactively with resistance Create too much fanfare Fail to understand information network No sense of urgency Over rely on structure and systems to change behavior Not involving all stakeholders Fail to target communications and provide feedback mechanisms Not creating a coalition of leadersOver rely on consultants Ignoring culture Fail to consider organizational capacity Forcing through too much changeDeclare victory too soon

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