1. Tour VII: Change Management
E. Widodo

2. Objectives Identify the type of changes needed
Develop an outline plan for implementing e-commerce
Describe alternative approaches to organization structure resulting from organizational change
Understand to manage human aspect of such change

3. Contents Perspective of e-business change Change plan
Human resource requirements
Revising organizational structures
Managing human
Knowledge management
Risk management

4. What we anticipate seldom occurs;
what we least expect generally happens.
Benjamin Disraeli

5. Intro
Strategy implementation: execution of strategy through project planning & creation of a system. (Including analysis, design, implementation & maintenance)
Change management: managing process, structural, technical, staff and culture changes within an organization.
Common examples:
Schedule
Budget
Resources
Organization structure
Human aspect
Technology required

6. Perspectives of e-business change

7. Change scale (1/2) Two levels of changes:
Large-scale change: e-business or business process engineering change.
Small-scale change: ad-hoc (project) change.
Business Process Re-engineering (BPR): identifying radical & new ways of carrying out business operations, often enabled by new ICT support.
Hammer & Champy (1993) and Davenport (1993) coin the essence of BPR as the recognition that business processes, organizational structures, team structures, employee responsibilities can be fundamentally altered to improve business performance.
BPR includes: fundamental rethinking, radical design, dramatic improvements and critical contemporary measures of performance.

8. Change scale (2/2) Ambitious scale  failure  new concept
Business Process Improvement (BPI): optimizing existing processes typically coupled with enhancements in ICT. (less radical approach and pay attention to innovation)
Still need less radical approach?  simply by making automation of existing system, called Business Process Automation (BPA)

9. Change plan
CP should be approached using project management, by which including:
Estimation
Resource allocation
Schedule/plan
Monitoring & control
Project plan of developing e-business system:
Initiation  Change management
Prototyping  Analysis & design + Implementation
Final Implementation
Maintenance
System Development Lifecycle (SDL): sequence in which a e-business system is created from initiation, analysis, design, implementation and maintenance.

10. Stages in developing e-business system (1/2)CM
A&D I

11. Stages in developing e-business system (2/2)

12. Example of B2C development schedule

13. Prototype & prototyping
Prototype: a preliminary version of part of a framework of all of a e-business solution system (the scale depend on its target audience & business project team).
Key stages:
Analysis
Design
Development
Testing & review
Prototyping: an iterative process by which e-business system’s stakeholder suggest modification before further prototypes and live version of the final solution system.
Benefits:
Prevent major design (functional) errors
Involves all the team responsibility to participate proactively
Rapid iteration results in shorter development period

14. Human resource requirements
e-Business system development requires specialists as follow:
Web designer  web structure & navigation
Web developer/programmer  web code writing
Web master  content management (up date)
Online marketer  online marketing management
Project manager  internal & external coordination
Staff retention can be achieve by doing:
Task combination
Work group
Customer relation
Feedback channel
Outsourcing: turn to 3rd party to assist internal e-business effort by using outside-in or inside-out scheme.

15. Revising organizational structure
When e-business system start influencing organization business by providing its revenue contribution, new organizational structure and working practice may be needed.
Four stages of growth:
Ad-hoc activity: no formal organization for e-business, skill are dispersed throughout organization, poor coordination between online & offline organization.
Focusing the effort: introducing control mechanism for e-business (steering group consists of IT & marketing experts)
Formalization: separate business unit within company to manage e-business system
Institutionalizing capability: creating separate operating company running e-business system

16. Advantage & disadvantage

17. Managing human
e-Business implementation creates changes that should be managed by:
Real support from top management  management commitment
Explanation on individual’s main activities  staff commitment
General obstacle is unfamiliarity with ICT, or even worse, technophobia.
Type of organizational culture:
Survival (outward looking, flexible): innovative
Productivity (outward looking, ordered): sales-driven
Human relation (inward looking, flexible): humane
Stability (inward looking, ordered): internal efficiency

18. Human reaction on change

19. Knowledge management
Knowledge: applying experience to decision making in problem solving
Data + meaning  Information
Information + (experience & understanding)  knowledge
Type:
Explicit knowledge: can be readily detailed in procedural manuals
Tacit knowledge: less tangible knowledge by which encapsulated within individual.
Knowledge management (KM): techniques and tools to disseminate knowledge within organization
Reason for implementing KM: improving profit (67%), retaining key expertise (54%), increasing customer retention (52%)

20. Risk management
Risk management (RM): evaluating potential risks, developing strategy to reduce risks and learning about future risks.

21. 7th souvenir Task 1: Select your group e-Business solution topic
Arrange its “Initiation Stage” equipped with its feasibility study, project planning, and change management appropriately