Organizational change

Technology and Organizational Change Mike Fasano TEC-401 Joe DMello University of Phoenix December 31, 2005

Organizational change

Technology and Organizational Change Technology has the ability to enable organizations to institute significant organizational changes that can enhance productivity, increase efficiency, and streamline day-to-day operations. This was the case when IBM who is no stranger to the benefits of technology, undertook an initiative to link their supply chain to their business strategy using technology to make this change possible. The driving force behind the decision to link the companies supply chain with the business strategy is the sheer size of the company. IBM is a company that is comprised of 19000 employees, across 100 locations in 100 countries. Additionally, IBM leaders realized the fact that the business environment of today is far more volatile than the past, was another innovation that would allow IBM to compete in the present as well as the future. These two facts coupled with the large number of stakeholders made the need for a clear and accurate assessment of this procedure to be completed by management prior to the implementation. The result of this organizational change was to allow IBM to become an on-demand business that is integrated end to end internally and externally with the responsiveness and flexibility to meet any client demand, market opportunity, or external threat (Knight, 2005).

Organizational change The first step taken prior to implementing this organizational change was to analyze procurement and product development. At the time, IBM had 30 different supply chains with 30 different procurement departments. So, even the most basic changes, such as reducing the number of suppliers and gaining economies of scale with commodities, turned into huge savings. Additionally, IBM took a closer look at product development. In doing so, we performed both a benchmark and a gap assessment and compared IBM to the other leading hardware manufacturers at the time. IBMs benchmark discovered that a 5% development expense as a percentage of sales was considered best in class. Unfortunately, at the time IBM was more than twice that. By understanding their company as compared to the competition, IBM understood what processes could be done electronically, outsourced, or eliminated. Based on the benchmarking data and gap assessment, a stage gate process for product introductions was deployed across IBM in 1998 called integrated product development (IPD). IPD was and is a systematic process for determining which products and services have the greatest market potential and which investment opportunities hold the most business promise. The process is driven by fact based decision making involving all relevant job disciplines, including sales, marketing, and the supply chain,

Organizational change which includes manufacturing, logistics, fulfillment, and procurement. The IPD team approach ensures throughout the checkpoint process that all factors in the development of a product throughout its life cycle are considered before that product goes to market. It essentially took IBM's product development team out of a vacuum and into the open. The results were outstanding. IBM went from abandoning 25% of new products to abandoning only 1%, meaning more products made it into the hands of their clients and fewer sat in their labs. This resulted in a decrease to 19 months from 70 months in the time it takes to bring IBM's high-end computing platforms to market. To further facilitate this organizational change and continue with ongoing process improvement, IBM adopted the WebSphere Business Integration Modeler Tool to document their business processes. This enables business analysts to compose models from process modules, which include rules, metrics, and component services for simulation capability of the business process. This is the area that IBM is now exploiting ever further as they continue their process transformation. This process model can then be exported via industry-standard terms called Business Process Execution Language (BPEL). Ultimately, additional WebSphere tools will be used to transition from process model to IT model, creating the workflow model and providing the move from build time to run time.

Organizational change True transformation of any organization is almost impossible in the absence of a fact based culture, as virtual barriers to change can be erected all too easily, whether intentionally or not. To overcome these challenges, compelling facts and metrics must be developed by managers and leaders of and organization that align the troops to the task and mission at hand. One of IBMs biggest challenges in implementing the supply chain organizational change was that of culture. Many team members involved in the transformation had been with the company for decades, were proud of what they achieved, and had no intention of changing. After they were presented with the facts and had witnessed how IBM compared with others in the industry the need for change really hit home. This was as a direct result of management sending a clear message and supporting the process. Technology offers companies and organizations a powerful tool that can facilitate immense changes in not only the products they produce, but also the way that companies conduct their business. The most important fact to consider is that companies must as IBM did realize the need for change, identify the technology that can assist them, and implement the change based on a sound plan that was developed and supported by all involved.

Organizational change References: Levy, N. (1998). Managing high technology and innovation. Prentice Hall. Knight, P. (2005, Jun ). How IBM linked its supply chain to its business strategy. Frontline Solutions, Vol. 6 Issue 5, p16-17, 2p. Retrieved Dec 30, 2005, from http://web17.epnet.com/externalframe.asp.