Achieving Outcomes: The Importance of
Business Change Management
Robin Riordan
Vice President Global Services Delivery, QAD
Achieving Outcomes: The Importance of Business Change Management
Safe Harbor
This presentation includes forward-looking statements about QAD and its business. These statements are subject to risks and uncertainties that may
cause actual results and events to differ materially. These risks and uncertainties are detailed in QAD’s SEC filings, including the company's latest
Annual Report on Form 10-K dated April 7, 2017 and in particular the section titled “Risk Factors” therein and other periodic reports the company files
with the Securities and Exchange Commission thereafter.
This presentation contains certain references to financial measures that have been adjusted to exclude certain expenses and other specified
items. These financial measures differ from comparable measures calculated and presented in accordance with accounting principles generally
accepted in the United States of America (“GAAP”) in that they exclude unusual or non-recurring charges, losses, credits or gains. This presentation
identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial
measure. Management believes that financial presentations excluding the impact of these items provide useful supplemental information that is
important to a proper understanding of the Company’s business results by investors. These presentations should not be viewed as a substitute for
results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures presented by other companies.
The following is intended to outline QAD’s general product direction. It is intended for information purposes only, and may not be incorporated into
any contract. It is not a commitment to deliver any material, code, functional capabilities, and should not be relied upon in making purchasing
decisions. The development, release, and timing of any features or functional capabilities described for QAD’s products remains at the sole discretion
of QAD.
QAD undertakes no obligation to update forward-looking statements.
2
Achieving Outcomes: The Importance of Business Change Management
Introduction
• Robin Riordan, VP Global
Services Delivery, QAD
• Experienced Executive and
Management Consultant
• Has led Global Business
Services at QAD, IBM and PwC
• Extensive experience in
delivering business
transformation through IT
3
Achieving Outcomes: The Importance of Business Change Management
Agenda
•
•
•
•
Change is all around us
Business Change Management and why it is important
The results of the QAD Change Management Survey
Summary and next steps
4
Achieving Outcomes: The Importance of Business Change Management
INTERNET OF THINGS
ARTIFICIAL INTELLIGENCE
AI BASED LEARNING
DNA EDITING
INTERNET
EVERYWHERE
GPS GOODS TRACKING
CLEAN
ENERGY
BOTS
(UBER, AIRBNB)
VIRTUAL REALITY
PERSONAL HEALTH
SCANNERS
BLOCKCHAIN
(BITCOIN)
SHARING ECONOMY
BIG DATA
ANALYSIS
REDUCED OIL
USAGE
INTERNATIONAL TAX
QUANTUM COMPUTING
DRONES
3D PRINTING
PERSONAL MEDICINE BASED ON GENOME
BATTERY
STORAGE
ONLINE UNIVERSITIES
ROBOTS FACTORY PERSONAL
Mind Boggling Change
CLOUD
COMPUTING
AUTONOMOUS
VEHICLES
5
Achieving Outcomes: The Importance of Business Change Management
Industry 4.0
1st
Mechanization,
Water Power,
Steam Power
2nd
Mass Production,
Assembly Line,
Electricity
3rd
Computers and
Automation
4th
Cyber Physical
Systems
6
Achieving Outcomes: The Importance of Business Change Management
Why do Companies Change their ERP?
60%
of ERP
implementations
deliver less than
50%
of the expected
benefits
21%
55%
75%
of ERP
implementations
fail to go live
are over
budget
72%
of ERP selection
projects have a
feature focus
(AKA technical)
take longer to
implement than
planned
Source: Panorama Consulting Solutions, 2015
7
Achieving Outcomes: The Importance of Business Change Management
ERP
selection
project
The Death
Cycle of ERP
Errors / no
single version
of the truth /
trust in system
erodes
Change
in the
environment
Manual
processes /
workarounds
Growing
gap between
ERP and
needs
8
Achieving Outcomes: The Importance of Business Change Management
Business Change Management
• What is Business Change
Management?
- All of the activities required to
understand, prepare for and
implement business change
initiatives
• What is its Primary Objective?
- Managing people related
business risks during periods of
business change
• Why is it Needed?
- To realize the benefits of business
change
9
Achieving Outcomes: The Importance of Business Change Management
QAD Change Management Survey
• Surveys sent out globally to
QAD customers
• 23 responders
- 78% used a formal change
management approach for
their ERP projects
• 69% of these did it in house
• 31% used an external company
Reasons for not Using a Formal
Change Management
Approach
“Processes in infancy”
“Not formal or systematic”
“Not seen as a critical element of a
successful implementation”
10
Achieving Outcomes: The Importance of Business Change Management
QAD Change Management Survey
• Of those who had a formal
change management approach
- 92% delivered within 30% of
original budget
- 77% delivered within 30% of
original time
- 69% had a formal business case and
achieved the stated outcomes
11
Achieving Outcomes: The Importance of Business Change Management
In the News...
Avon Cosmetics
$125m ERP
program
abandoned in
2013 after field
sales reps found
that the new
processes took
much longer than
existing ones
US Air Force
$1bn Combat
Support System
cancelled after 7
years, citing
“difficulty in
implementing
change” as well
as other reasons
UK National Health
Service
£10bn Patient
Record System
cancelled in 2011,
due to the
complexity of
change and
stakeholder
management
“Insanity: doing the same thing over and over again and expecting different results.”
- Albert Einstein
12
12
Achieving Outcomes: The Importance of Business Change Management
Balancing Risk and Benefits
Major Change
Large Benefits
High Risk
Medium Benefits
Moderate Risk
Peripheral
Core
Medium Benefits
Moderate Risk
Small Benefits
Low Risk
Small Change
13
Achieving Outcomes: The Importance of Business Change Management
Organization Culture Affects how to Change
Collegiate
• Strong local cultures
• Network organisation
• Consensual decisions
Innovative
• Flexible and reactive
• Innovation driven
• Matrix organization
Bureaucratic
• Strong centre
• Top-down decisions
• Rules driven
Enterprise
• Traditional business
• Hierarchical
• Clear strategic plans
14
14
Achieving Outcomes: The Importance of Business Change Management
Overcoming Resistance to Change
Enthusiasm for Change
Resistance to Change
I am involved in the design
I am not involved in the design
My opinion is heard
I will benefit from the change
I understand our strategy
I have time to adjust
My opinion is not heard
I cannot see any benefits
I don’t understand our strategy
It’s all happening too quickly
I believe the change is important
I don’t understand the change
I believe the change is necessary
Other things need to change
15
Achieving Outcomes: The Importance of Business Change Management
The Enablers of Achieving Outcomes
CREATE
Strategic Vision
• Make vision relevant
• Identify benefits
• Create compelling story
DEFINE
Change Strategy
• Assess change readiness
• Identify key stakeholders
• Establish change plan
BUILD
Commitment
• Build teams
• Manage stakeholders
• Overcome resistance – communicate!
• Train project teams
MANAGE
• Train end users
Learning & Knowledge • Transfer knowledge
ALIGN
Culture
• Define values to support vision
• Shape desired behaviours
• Integrate with performance management
DESIGN
Roles & Organisation
• Design organization
• Create performance measures
• Define transition paths
QAD
Customer
Engagement
Engage
Discovery
Vision
Q-Scan
Services
Engagement
Engage
Discovery
Vision
Q-Scan
16
Achieving Outcomes: The Importance of Business Change Management
Poor Change Management – “Brexit”
CREATE
Strategic Vision
• A united, yet reformed Europe?
• A strong, independent nation?
• Economy, immigration, (in)dependence
DEFINE
Change Strategy
• Campaigns based upon “fake news”?
• Concerns about other issues
• Immigration, economic deprivation, world politics
BUILD
Commitment
• Shock decision
• No clear plan
• Uncertain future
What will
be the
Outcome?
17
Achieving Outcomes: The Importance of Business Change Management
Brilliant Change Management
CREATE
Strategic Vision
• Final site of a global roll out
• Tailored to Slovakia site – new green field plant
• Vision communicated to the business
DEFINE
Change Strategy
• Transformation plan inherent within project
• Key local stakeholders identified and assigned
• Strong senior management sponsorship
BUILD
Commitment
• Dedicated project team
• Local team with corporate support
• Ongoing communication
• Project included team training on ERP
MANAGE
• Project team trained the wider business
Learning & Knowledge • Ongoing knowledge transfer through super users
ALIGN
Culture
• Defined ways of working were embedded in ERP
• Aligned with performance KPIs
• Non optional
DESIGN
Roles & Organisation
• Organisation structure was pre-defined
• Roles and responsibilities clearly defined
Smooth “Go Live”
Local system
ownership
ERP aligned with
business process
Driving continuous
improvement
18
Achieving Outcomes: The Importance of Business Change Management
QAD Change Management Survey – Top Priorities
Defining outcomes
Writing a compelling story
Assessing change readiness
Managing stakeholders
Training, training, training!
Defining new cultural values
Designing the new
organisation
• Tracking outcomes
•
•
•
•
•
•
•
19
Achieving Outcomes: The Importance of Business Change Management
QAD Change Management Survey
• Three hardest tasks to accomplish
- Defining the change strategy
- Building commitment
- Aligning the culture to change
• Three easiest tasks to accomplish
- Defining the strategic initiative
- Creating the change vision
- Designing the new organisation
20
Achieving Outcomes: The Importance of Business Change Management
Key Issues to Address
•
•
•
•
•
•
Why is the change needed?
What change do we need to make?
How will the change affect us?
When do we need to change?
Who will lead the change effort?
How will we be successful?
21
Achieving Outcomes: The Importance of Business Change Management
Key Contributors to Success
• Active and visible Executive
sponsorship
• Using a structured approach
• Simple to use, communicate
and understand
• Start early in the project
• Consider the individual and
the organization
• Create an effective
communication plan
22
Achieving Outcomes: The Importance of Business Change Management
Summary
• There is a clear correlation between
having a formal business change
management program and delivering
benefits within time and budget
• Change management can help you
reduce risk in your business during
periods of change
• Don’t skimp – invest time and effort
getting it right!
• QAD will work with you on the journey
23
Achieving Outcomes: The Importance of Business Change Management
Questions and Answers
• Robin Riordan
- VP Global Services Delivery
- [email protected]
24
Achieving Outcomes: The Importance of Business Change Management
Highlighted Session
QAD’s Interoperability
Strategy Update
Thursday @ 11:00 a.m.
Ambassador 2
25
Achieving Outcomes: The Importance of Business Change Management
Thank You
www.qad.com
©QAD Inc. 2017
26