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The project team realized that that there were three important aspects to performance tracking and monitoring: Cost; Schedule; and Change management. The cost and schedule

The project team realized that that there were three important aspects to performance tracking and monitoring:

Cost;

Schedule; and

Change management.

The cost and schedule were to be tracked so they could be contained as much as possible. Gary Wilson said, Cost was a problem, but we were prepared to pay for the project. Schedule was more important since we wanted to live by the established schedule. But the most important aspect of performance was change management.

Change Management

A big project like ERP not only automates the processes of the organizations using a new technology but becomes a part of a bigger solution to run the business efficiently. ERP implementation in an organization changes the organizational landscape in technology, process, and best practices. The best practices are the business models obtained through benchmarking from the practices and business processes of world-class organizations. The implementation of an ERP system changes the way in which the employees use systems and processes, and those used to working with existing processes have to change their habits and attitudes in order to work with the new interrelated and complex processes. Such change has to be managed well.

Change management is the process of managing the people side of change to achieve the required business outcome. It incorporates the organizational tools that can be utilized to help individuals make successful personal transitions resulting in the adoption and realization of change. Such tools are necessary as some employees tend to resist change. The two fundamental sources of resistance to innovations like ERP are perceived risk and habit. Perceived risk refers to the perception of the risk associated with the decision to adopt the innovation, in this case, the decision to accept an ERP system. In order to reduce the resistance by employees to ERP, senior management of the organization must analyze these sources of resistance and must employ the appropriate set of strategies to counter them.

In NIBCO, IBM was selected to lead the change management efforts. Three team members, including Davis, worked on change management issues, and all three members were expected to be change leaders.The information used to help the change management team was captured as part of the business process documentation. Brown and Vessey show how the team members identified the changes to a given process and how they categorize them as shown in Table 7-10. For example, in the past, an accounts payable clerk had no need to talk to the procurement department. But using the SAP R/3 system, the procurement process has an impact on the transaction documentation that is fed into the accounts payable part of SAP. Therefore, the communication and information sharing between procurement and accounts payable functionalities become very important as shown in the category relationship.

The change management includes any addition, modification, or removal of existing service or process components and their associate documentation. Some change management has to be carried out in organizations due to the introduction of new processes and services in order to proactively reduce costs and improve services. Other change management occurs to solve errors or defects or simply to adapt to changing environments. In MIS-related projects, changes can occur to hardware, software, network, or applications, and those changes have to be tracked and monitored to ensure success.

A process flow for change management has been used by Cisco, Inc. The process flow involves four major roles: change initiator, change manager, change implementation, and change advisors. Typically, change initiators are those who initially perceive the need for the change. They plan and execute steps that are necessary to meet the initial requirements for a request for change (RFC). They test and validate the changes, create change proposals if needed, document the RFC, create the RFC, process the technical review of the RFC, and obtain the necessary signoffs.

NIBCO called RFCs project change requests (PCRs). Each PCR was written to include the description of the proposed change, the rationale for the change, and the effect of the change on the project. The change management consisted of a team and a manager who are responsible for the change management process. In large projects, like NIBCOs ERP implementation, such a team is essential. The NIBCO project coordinator and the IBM project manager reviewed the proposed change to either approve or reject the PCR. The change initiators were responsible for reviewing PCRs, assessing and evaluating them, authorizing them, completing post-implementation reviews, and closing the changes. The change implementation includes plan updates, implement changes, and backouts from the change in the event it cannot be successfully implemented. In an event of an emergency, changes are also made very quickly. A PCR is created, the change is implemented, and the change is closed and recorded in the configuration database. The change advisors for NIBCO were represented by IBM.

The metrics that are used in change management include satisfaction, training, and delivered value. There are many other change management performance metrics that may be considered as well. We will consider these metrics in this section. NIBCOs management considered some of the change management performance and satisfaction metrics.

Satisfaction

The satisfaction of end-users is the best measure of the success of change management as they are most affected by changes. To understand the satisfaction of end-users, evaluation of satisfaction by means of surveys is warranted. The following overall satisfaction metrics may be understood by surveying end-users and other stakeholders:

Overall satisfaction with change management of project preparation;

Overall satisfaction with change management of project communications;

Overall satisfaction with change management of project training;

Overall satisfaction with change management of project end-user readiness;

Overall satisfaction with change management of project stakeholder management; and

Overall stakeholder satisfaction with change management.

Training Metrics

The change management cost metrics focuses on training and user readiness during and after the change management processes. The following are some of the cost metrics attributed to training and user readiness:

Percent of End-Users Trained

This percentage of users trained indicates the success in training resulting from process changes. A high percentage is expected.

% end users trained = Number of users/Total number of potential users100

Percent of User ReadinessRelated Support Calls

User participation and involvement in projects are critical. Using interviews of more than 45 project managers, a research study44 indicated that user readiness contributed to the success of a project but interfered with other kinds of readiness, such as process readiness, data readiness, and, more intimately, cultural readiness. User readiness refers to more than existing skills and knowledge and includes the understanding of the purpose of the training and the reasons for using new technologies for the change that is happening in the organization. This metric can be obtained by surveying users.

Delivered Value

Change management adds value to the project as it helps employees adapt to changes from the project implementation. The values of this change management can be obtained by a survey of users and stakeholders to obtain the following:

Percent of team with change management knowledge;

Percent of project team with basic change management training; and

Actual value provided by change management.

Change Management Performance

There are a number of change management performance metrics that may be considered, such as:

Change Efficiency Rate (CER)

The change efficiency rate (CER) provides the changes that were implemented over the total created RFCs. A lower rate indicates that there are many changes to be implemented that may need urgent attention.

CER = Number of implemented changes/ Total number of RFCs created 100

Average Process Time per Change

This is the process time that was needed to implement changes over a period of time. Let us say that it took an average of four days to process a change during the month of January and an average of five days during February. This represents a 25 percent increase or one-day increase in average process time per change. The average process time may be calculated over a period of a year or two to understand and set an average process time per change target. If the target set was 0.5 days per change, then our example of a one-day increase in process time is not within the target, thereby indicating a problem with the change process.

Unauthorized Change Rate (UCR)

The unauthorized change rate (UCR) is the percentage of all implemented changes that were unauthorized or those changes that bypassed the change process. If this rate is high, the process is not being followed and indicates a problem for the organization.

UCR = No. of implemented changes without authorization/ Total number of RFCs created 100

Change Incident Rate (CIR)

The change incident rate (CIR) is a percentage of all implemented changes that result in incidents being recorded in the incident management system.

CIR =No. of implemented changes without authorization/ Total number of RFCs created 100

Case Questions

Using the information in this section, what metrics should be tracked and monitored by the project team?

How do you propose to monitor each one of those metrics?

What are the other standard metrics to be tracked for a project of this proportion? Write a rationale for each of the metrics that you choose.

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