assessing the ne cessity of enterprise change

8/6/2019 Assessing the Ne Cessity of Enterprise Change

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Asse ssin g th e n e ce ssity of e n te rprise ch an ge :

pre-feasibility and feasibility studies in

e n te rprise in te grationGREGORY UPPINGTON and PETER BERNUS

Abstract. The article presents a process model of the least

ormalized phase of enterprise change, in which managem ent

and all other interested parties identify a need for change,

assess what change me thodology is adequate to handle that

h an ge an d make p reparation s for en actin g th at ch an ge

p roc e ss. T h is p roc e ss i s i n te n de d t o b e e m be d d e d i n a

om p l e t e e n t e r p r is e e n g i n e e r i n g/ en terp rise in t egrationmeth od ology. Th e aim h as b een to give a mo re d etailed

account of the first phase of e nterprise integration, called the

identification phase of the enterprise life-cycle. A top level of

he methodologys process is presente d as a series of IDEF0

diagrams and their companion explanations, although future

versions may be developed in more elaborate languages (e.g.

CIMOSA modelling constructs) . The original aim to develop

h is p art o f th e meth od ology was fo r the meth od to b e

specially suitable for the service industry; it has be en found

hat there was no need to be service industry specific on this

evel and that considerations applied e qually to service and

manufacturing.

1. Introduc tion

I nit ial p lan n i n g p h a se s o f an y c h an g e m a n ag e -

m e n t p ro ce ss ar e g re at ly e n h an c ed with so lid

founda ti ons and i dentification of whe ther cha nge i s

necessary, what is to change, a clear method showing

how and where cha ng e wi ll occur and the potenti al

e ffe c ts o f su c h c h an g e ( Min k et a l . 19 93 , H an d y

985) . Resulting from the identification that change

can benefit an enterprise or tha t cha ng e i s necessary

for the en terprise to retain its compe titive advantage,

h e c h oic e o f th e tr an sitio n m e th od is th e o n e

management often finds to be the most difficult. It is

h i s c h o i ce wh i ch wil l o ft e n d e te r m in e th e fu tu r e

uccess of an en terprise.

T o u ndersta nd the selection process of a cha ng e

methodology for an enterprise within a certain industry

se c to r e n t ails th e c o nsid e r ati on o f a n u m b e r o

conce rns in two areas. First: tacit n otions, con cepts

requi reme nts a nd i deal s of the chang e methodolog y

Second: the target enterprise, the necessity for change

and the strategic management process of such change

The following paper indicates those considerations

m a n ag e m e n t wil l f ac e wh e n d isc u ss in g o r e n a c tin g

o r ga n iz at io n a l c h an g e . T h e i n fo rm a ti on c o n ta in e d

within this pape r is ge ne ric across indu stry sectors, with

certain required contextual alterations and is consid

ered to be applicable to any change effort. The text is

organized to rep resen t what activities will occur at each

stage of the change process from the initial discus

sion of the validity and viability of change to the finaldecision and `sign-off to e nlist the most appropriate

organizational change methodology and implement the

change process. The paper is aimed at establishing an

organizational process model. The model will allow for

`an integrated information, manufacturing [ or service]

an d h u m a n r e lati on s ar c h it e ct u re o p e r at in g as an

overall systems responsive to the human and economic

environment at all levels (Williams 1994a). This model

d r aws p r e d o m i n an t ly u p o n th e P u rd u e En t e r pr ise

Refere nce Architecture ( PERA) ( Williams 1994b) with

wh i c h m a n ag e r s c an se l e c t o r c o m b in e in d i vid u a

me thods a s proposed in the li terature. Furthermore

the model is presented in such a way that the procedure

doesnt become prescriptive or overwhe lming. For thi

we ha ve selected a functi ona l representation of the

processes i nvolved, whe reupon i t i s a t the strategi c

managers discretion in which succession the described

a ct ivi ti e s ar e p e r f or m e d as l on g as t h e i r l og ic a

connections are respected.

As such, this paper develops the processes/ activitiesthat ma na gem ent can foll ow to i dentify the busi ness

NT. J. CO MPUTER INTEGRATED MANUFACTURING, 1998, VO L. 11, NO . 5, 430 447

0951-192X/ 98 $12.00 1998 Taylor & Francis Ltd

Authors: Gregory Uppington and Peter Bernu s, Griffith University, School of

Computing and Information Technology, Nathan 4111, QLD, Australia.


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entity that needs change and to identify the nature ofchang e. In PERA a nd GERAM ( Bernus a nd Nemes

996) this phase is called the Ìdentification Laye r of

he enterprise l ife-cycl e. Requi rements of this l ayer

phase) have been formulated based on the `Guide to

Master Planning for Enterprise Ingetration ( EI) Pro-

g ram m e s o r ` Pu r d u e Gu i de fo r sh o r t ( s e c . 2 ,

Wi ll iam s 1 9 94 a) . T he a udience for this pa per rang es

from the CEO to the Techn ical Specialist ( in-house or

c o n su lt an t ) : t h ose s tak e h o ld e r s wh o wil l b e m a jo r

pla yers in the cha nge me thodolog y are identi fi ed by

h e i r r o le i n th e c h an g e p r oc e ss ( s u ch as In i tiati n g

Sponsor, Project Champion, Feasibility Study Investiga-

ory Team, and EI Steering Committee members).

T h e P u rd u e Gu id e assu m e s th at t h e ` In itiati n g

Sponsor and ` Project C hampi on tog ether ha ve a ll

nformation available to start a master planning process,

he refore no so-called as-is analysis is ne ede d in this

nitial phase of enterprise integration.

Other methodologies, e.g. GRAI-GIM (Doumeingts

et al. 1995) assume that the direction of change needs to

b e d e t e rm i n e d as p ar t o f t h e m e t h od o lo g ic al ste p s,

using an as-is analysis step.

Al thoug h these two methodolog ies a re seemi ng lycontradictory from th is regard, we h ave gen eralized and

d e tail e d a m e t h od o lo gy fo r t he i n it ial p h ase o f EI

h erein presen ted) thereby extending its applicability

o si tuations where the di rection of cha ng e must be

determine d, to justify the p roposed change to comp any

m a n ag e m e n t ( o r th a t m a n ag e m e n t c an ju st if y t h is

change for themselves).

In the l ig ht of the me thodolog y presented i n this

paper the me thodolog ical steps of the Purdue Guide

and those of GRAI-GIM are suitably spec ialized cases,

and are by no mea ns i n contradi ction i n phi losophy.

Thus, interpreted in the context of the here presentedchange assessmen t m ethodology the respective initia

ph ases of the Purdue Guide and of GRAI-GIM can ( and

are) plugged -in at suitable points (in fact selected by

the change initiating personnel).

T he Purdue Enterprise Reference Architecture, a

detailed Enterprise Enginee ring me thodology calls the

top enterprise l ife-cycle the ìdentification phase or

layer (the terms layer and phase are used interchange

a bl y i n this arti cl e i n whi ch a n E nterprise B usi nes

Entity (EBE) is appropriately iden tified as the target for

change (see figure 1, A1: Identify EBE) .1

The me thodology detailed here in investigates the

validity and viability of the intend ed change proce ss for

t h e o r gan i zat io n to e n s ur e th a t i t m a in t ain s i ts

c o m p e titi ve ad van t ag e b o th d u ri n g an d af te r t h e

change process. Section 2 ÈBE Identification Pre

Feasibility Study, outline s the initial ide ntification of

the benefi ts of an enterprise integ ration programm e

the process of identification of the EBE, and the proce s

of gaining manageme nt com mitmen t for the successive

ÈBE Identification Feasibility Study (figure 2).

Assessing the n ecessity of enterprise chan ge 43 1

Figure 1. The three stage process of Master Plan development (EBE Identification is shown as the first stage) . ( IS: Initiating

Sponsor, PC: Project Champ ion, FSIT: Feasibility Study Investigatory Te am) .

1It is not predetermined what should be the size and extent of an EBE; it can

be the en tire o rganisation or any part of it that manageme nt want to consider a

a coope rating but autonomous u nit. Typically, an EBE may be a whole busines

unit responsible for a type of product, product group or service. This busines

unit m ay be situated at a given location, or distributed within a region or world

wide. The best way to delineate the EBE is by considering the service the EBE

gives to the market. All activities which are considered by management to be

core (strategic) activities in the provision of the above service are ideall

handled within the EBE. Other activities which are not core are either done in

separate EBEs of the same enterprise or are performed by outside contractors

In this way an en terprise of any size can be considered an EBE, comprehe nsively

managing all activities that are needed in the value chain of its products, and

which activities are carried out in inter-enterprise or intra-enterprise coopera

tion (be twee n EBEs).


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Section 3 `EBE Identification Feasibility Study

util ises the i nformation a nd findi ngs from the Pre-

Feasibility Study ( PFS). This section covers the EBE

en vironm en tal analysis ( subjective analysis), the EBE

corporate appraisal ( objective analysis), and an EBE

TO-BE scenario formulation ( the initial EBE vision)

and evaluation via a Feasibility Study (FS) to determine

he viability and validity of th is scen ario. Furthe rmor e,

g uidel ines for the Ma ster Planni ng process a re pro-

posed and an EI Planning Team (PT) is formed.

The identification phase of the enterprise life-cycle

s compl eted with the esta bl ishme nt of the i nitia l E I

program m e (this latter is not discussed in d etail in the

present paper) .

T h e m e t h o d olo gy h a s b e e n t rie d in its n e w f o rm

on two case stu die s. O n e in th e Glo be m an 2 1

consorti um (of w hi ch the resul ts a re at the mome nt

propri eta ry ma teria l) , a nd the second i nvol ves the

ervi ce industry a ppl ied to a smal l propri etary e n-

erprise whe re it transpired the me thodology helpedd e n tif y a n e w b u sin e s s i n th e fie l d o f to u rism in

e m o te Au st ra lia an d was ab le t o e f fic ie n t ly h e l p

formulate the basic busine ss strategy as well as guide

nformation g athering for the esta bl ishment of the

business in a very efficient manner (the time schedule

ook approximately three weeks).

2. EBE id en tification pre-fe asibility study

Given the increasing size and complexity of modern

organi sa ti ons, i t i s becomi ng more importa nt to pay

particular attention to the initial stages of any strategy

formation (Mink et al. 1993, Handy 1985). This is often

considered part of the project concep tion or initiation

phase and forms the foundation for proceed ing events

W ithi n the enterprise i nteg ration fra mework there

exists a n ee d to in ve stigate the validity and viability of

the inten ded change process to m aintain compe titive

advan tage both du ring and after the EI process. For the

p u r po se o f t h i s p ap e r , w e h a ve b ro ke n t he p r oje c

initiation phase into two major compon en ts: the Pre

Feasibility Study ( PFS) and the Feasibility Study ( FS). I

i s im p o r tan t t o r e c og n iz e t hat th e s e p r o ce sse s ar e

essentially differen t and equ ally important. This section

d e a ls wi th t h e f ir st o f t h e se p r oc e ss e s t h e P re

Fe asibility Stud y.

In small projects, many of the activities outlined

he re m ay be un dertaken as part of the Feasibility study

However, for large and complex organizations ( e.g. a

multinational hotel chain) it is essential that the value

of the intende d p rocess be establishe d be fore resourcesare allocated to more costly exercises l ike feasibility

studies. As a consequence, the PFS outli ned i n this

pa per i s pri maril y undertaken to i nitiate the proces

and to establish its likely contribution to the organiza

tions com pe titive advantage.

The pre-feasibility study is carried out to d eterm ine

The organisations current status qu o ( h o w i t i scurrently ope rating i n terms of ma rket forces

competitive position, etc.).

W hether there i s a need for the org a ni za ti on tounderg o a cha ng e process.

G. Uppin gton an d P. Bern us43 2

Figure 2. The three stage process of Enterprise Business Entity (EBE) Identification.


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Whether there is a viable opportunity within theorganization to successfully implem ent a change

process.

T h e o bje c tive s an d r e so ur ce s o f th e c h an g eprocess.

How to be st achieve successful ben efits from thischang e process by wa y of ex a mi ning the a ppro-

priate change me thodologies, and

Whe re the most appropriate change me thodologycould be en acted within the organization.

T he a ctivi ti es de scribed here are not one-off, or

project l ike: company management continuously keep

performing such assessments as listed here. Many ideas

of possible change will progress to some stage, only to

be shelved or stopped altogether, and only some will

mature to the stage of implementation. Thus manage-

m e n t p e r fo rm s c h an g e m a n ag e m e n t u n d e r t he in f lu -

e n c e o f p r ese n t e n vi ro n m e n tal fac to rs an d in th e

awareness of past change histories of the company orcase studies of other companies.

2.1. Depth of AS-IS an alysis

Both the pre -feasibility study an d feasibility study

conduct analyses which would be termed by literature

an ÀS-IS analysis. Both such an alyses are, howeve r,

imited to the pragmatic ne eds of the subseque nt ph ase

of the change process and of the personnel involved.

The re are m any debates about the pros and cons of

cond ucting an AS-IS analysis prior to the designin g of a

f u tu r e T O -B E s ce n a r io ( H an d y 1 9 85 ) . T h e vi e w

a dopted i n thi s pa per i s tha t for a ny ma na g er to a ct

o n th e c u rr e n t situ at io n o f t h e e n t e rp r ise , it is

ma nda tory to ha ve a n understandi ng of the current

tate of affairs ( Rolstadas 1995) . However, any AS-IS

an a l ys is t h a t i s i n c o r p o ra te d wi th i n t h i s d e t a il e d

me thodology is pragm atically drive n only that dep th

of AS-IS analysis is perform ed ùp-front of which the

esul t i s necessa ry to take i nformed deci sions i n the

chang e process. C lea rly therefore the need to under-

ake analysis is not objectively determined but rather isd e p e n d e n t o n t h e n e e d o f t h e i n v o l v e d m a n a g e m e n t

an d te c h n ic al p e r so n n e l to u n d e r stan d t h e p r e se n t

ituation of the enterprise.

Note also, that the AS-IS analysis for the identifica-

i on of the na ture a nd pl ace of cha ng e i s disti nctly

different from AS-IS analysis unde rtaken later in the

change process, after the new planned TO-BE state of

he enterprise has been designed. This latter is carried

out for the sake o f transition plann ing ( such as analysis

s, fo r e x am p le , p r op o se d in th e P u rd u e Gu id e fo r

Master Planning).

As a co nsequ en ce, the following five-stage proce s

constitutes the PFS (see A11, figure 3).

Investigate Project ( A111) . Examine EI Methodologies (A112). Conduc t PFS ( Rapid Analysis) ( A113) . Determ ine Viability of Undertaking EI (A114)

an d

Seek Final App roval for Specific EBE FeasibilityStudy (A115).

2.2. Investigate Project (A111)

The main und erlying purpose of À111 Investigate

P ro je c t i s fo r an I n it iat in g S po n so r an d P ro je c t

C h am p i on ( s e e b e lo w) to d e t e rm i n e th e e n t e rp r ise

integration activity will contribute to the organizations

com pe titive advantage.

This investigation involves the identification (or selfi dentification) of a Project C ham pi on (PC ) and an

Initiating Sponsor ( IS) who respectively are personnel

who tog ether2

are abl e to recog nize when strategi c

c h an g e is r e qu ir e d an d in stig at e t he c h an g e p ro

gramme. The IS sponsors the first steps (PFS and FS)

o f th e ch an ge e ffort an d is assu m e d to b e in a

management position who has a vision for the future

The se pe rsonn el m ust have an initial unde rstanding o

the organization, and have certain abilities and knowl

edge to discuss issues such as those regarding technical

and hum an processes, organizational ch ange processes

and econom ic considerations.

Within this activity, the value ( ne cessity) of un der

taking change within the organization is identified, i.e

the IS and PC will investigate the perceived nee d for

c h an g e in th e e n te r pr ise . T h is p e rc e ive d n e e d fo r

change is to be aligned with the organizations strategy

for gaining or retaining competitive advantage. The IS

and PC identify at a high level the nature of the change

they see as required within the enterprise, by looking at

busin ess goals, performan ce in dicators (Lucertini et al. 1995)

current strategic reports, internal business audits, e tc. A list of

prop erties one might wish the En terprise to have m ay beformulated ( a high leve l vision) , with initial ideas of how

to achieve those properties questioning how can value

be a dded to current busi ness processes (M oseng a nd

Bredrup 1993 in Rolstadas 1995) .

Given this high level vision, the IS and PC identify

an d se l ec t fr om t he p o ssib le fo rm a l an d in fo r m a


2The description is to be interpreted with the understanding that in a company

many sponsors/ c h am p i o n s m a y o p e r ate a t a n y o n e tim e ; we d e sc r ib e th

process of change from the point of view of one of these.


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ava il abl e me thodolog ies for ma na g ing chang e pro-

c e sse s. Th e valu e o f an EI p ro gr am m e sh o u ld b e

eaffi rmed throug h compari son wi th other cha ng e

o bje c ti ve s . T h e IS an d P C p r op o se an d se l e ct th e

m o st ap p ro p ria te m e th o d to c on tr ol th e c h an g e

p r oc e ss wi th in th e o rg an i zatio n in th e c o n te x t o f

h e e n t ir e e n t e rp r ise , n o t ju st at a lo c al le ve l . It is

m p o rtan t to h ar m on ize th e EI p r oc e ss with th e

general strategic cycles of management review so that

he EI activities are conducive to the organizational

mi ssion, vi si ons and val ues and al so to the current

positioning within the industry sector and competitive

market.

The usual type of decision that ne eds to be taken at

hi s poi nt i s whe ther the type of cha ng e percei ved a s

nece ssary is of increm ental nature ( i.e. has local effect

only in which case the change falls into the realm of

conti nuous i mprovem ent a nd a correspondi ng metho-

dology could be followed) or is strategic in nature (inwh i ch c ase th e c h an g e p r oc e ss c o uld fo llo w a n EI

programme methodology).

2.3. Examin e EI methodologies (A11 2)

T hi s a ctivi ty i denti fi es the g eneri c benefits that

enterprise integration can bring to an organization and

hould be und ertaken in light of en terprise integration

tandards and within the context of how the organiza-

ion is expected to react to such change.

First it is necessary to study the EI methodologies

the ir cen tral and gen eric be ne fits ide ntifying up -to-date

EI guideline s and standards. Second, it is ne cessary to

identify those ben efits that enterprise integration can

provide for the specific organization compared to what

the IS and PC propose en terprise integration to prov ide

for the organization.

Naturally following is the development of an action

plan for a PFS ( specifically the Rapid Analysis) which

indicates:

the purpose of the PFS in the particularenterprise, i .e. what it should examine;

the required rersources for the PFS; the required levels of com mitments for the PFS; the continuing PFS schedule.

T hi s a cti on pl a n onl y needs to be a g reed upon by

the IS a nd PC w ithout w ide circulation of this pla nbecause the l evel of uncertai nty about the need a nd

discretion of change is still very high.

2.4. Conduct rapid analysis (A113)

The rapid analysis compon en t concern s three main

objectives.

The first objective comprises a h igh level review of

the current sta tus of the organi zati on (AS-IS). T hi

i nformation that shoul d be readi ly a vai labl e i n the


Figure 3. The Compone nts of a Pre-Feasibility Study.


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organization. Within this activity, the IS and PC review

h e c u rr e n t b u si n e ss an d m a rk e ti n g s tr at e g ie s t o

eaffirm how the organization curren tly ope rates within

h e c om p e titive m a rk e t an d wh at is i ts c u rr e n t

competitive position. A brief SWOT analysis ( Dealty

992, H ill and Westbrook 1997) of the organization is

c o n d u c te d t o d e t e r m in e a n y si gn i fic an t p o te n t ial

mpacts or oppor tunities within this market with respe ct

o the high level vision and concrete objectives of EI in

he selected EBS.3

The industry expectations (trends)

are also reviewed to ascertain organizational direction.

T he IS an d PC n o w n e e d to d elin e ate th e

Performance Indicators ( PI) for the organization and

for the given industry sector, these help the recognition

of the Performance Drivers ( PD) for the organization

a nd i ndustry sector). (T he performa nce drivers can

oosely be linked to determine Critical Success Factors

for the organization).

The second objective is to establish the direction of

en terprise integration within th e co ntext of the organiza-ion ( A1132) . This is done by ide ntifying the EBEs of the

organization, and potential opp ortunities that m ay be

exploited by managem en t through EI activities.

T h is will sh o w t h e IS an d PC wh e r e th e r e al

boundaries of the organi za ti on a re ( a s there ma y be

EBEs in th e valu e c h ain wh i c h ar e e x te r n al to th e

organization), and define the extent and scope of EBEs

o p e r at in g wi th i n t h e o r gan i za ti on ( a s we l l a s th e

nta ngi ble l inks and constructs between E BEs). T he

cope of a n EB E ma y be i denti fied by looki ng at the

prod ucts of an EBE and re late d activities in a m atrix form .

The actual values of the earlier determined perfor-

ma nce indi cators a nd performa nce drivers for ea ch

EBE are also reviewed, i.e. the measures that allow the

assessme nt of the curren t position of the EBE within the

g ive n e n t e rp r ise an d e n vir o n m e n t ( L u c e rtin i et al .

99 5 ), and the underl yi ng mea sures tha t determi ne

he performance of the EBE. This allows management

o elicit those activities which are of prime importance

n the fulfil lmen t of the orga nizationa l mi ssion (i n

other words, m a nag eme nt wi ll ma ke ex pl ici t the key

ssues that nee d solution in the EI process).

As each EBE is designed to contribute to the wholeof the organizational mission, the IS and PC review the

trategic direction and operating policies for each EBE

o determine whether the EBEs are actually operating

conduci vel y to the current orga ni zationa l mi si son,

vision and value s. From the above information and

knowl edg e, the IS and PC shal l be a bl e to obta in a

picture of the organizations current performance and

se e h o w it r e late s to th e p ote n tial b e n e fits o f an

en terprise integration programm e. The assessment o

the EBEs may include (without a detailed analysis, i.e

purel y based on the present understandi ng of the IS

and PC) the notion of maturity (Paulk et al. 1 9 93 ) .

The third objective for this section is to prepare a

report outl ini ng the Ra pid Ana lysis f indi ngs ( from

A1131 and A1132) with refere nce to the be ne fits EI can

bring to the organization (A1133).

The Rapid Analysis Report is prepared for upper

l evel ma na gem ent revi ew. T his report i s de sig ned to

enh a nce the compl etene ss of current strateg i c docu

m en tation. It collates all m aterial and find ings into on e

docum ent and indicates the following information.

How the organi zati on i s currently performi ngwithin the given industry sector.

What drives the performance of the organization Wh a t ar e t he c u rr e n t b u sin e s s a n d m a r ke ti ng

strategies. What are the expected industry trends. A list of the organizations EBEs. The performance indicators and drivers for each

EBE, the organization as a whole and the industry

sector.

The perce ived maturity of the EBS. The existing strategic direction and encompassing

policies for each identified EBE.

The Rapid Analysis Report will indicate to manage

m e n t t h e c u r re n t s ta tu s o f th e o r gan i zati on , t h e

e x p ec te d fu tu re tr en d s ( wh ic h will n e e d to b e

addressed) , and if there are any EBEs which are either

not p erforming well. ha v e the potenti a l to perform better (economi c

ally an d ope rationally) .

have deviated from their original mission (identified with a devi ation from contributi ng to the

organizational mission) consequen tly requiring

change (including the formation of new EBEs).

The main theme of this analysis is for the IS and PCto review the organizations performance subjectively

and to then contrast their p ercep tions with objective

information such as the performance indicators.

2.5. Determine viability of undertaking EI feasibility study

(A114)

For an enterprise integration project to be success

fu lly im p le m e n te d , t he r e m u st b e c o n se n su s an d

com m itme nt from all intere sted stakeh olders. However


We stress that a SWOT analysis should always be relative to th e i n te n d e d

oncrete objectives without these SWOT analysis is a pointless activity.


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as the leve l of investigation described in sec. 2 is mainly

exploratory (fact-finding) , the em phasis of the present

activity (A114) is to de term ine the viability of en tering

he ne xt p hase the feasibility study.

This activity is therefore conducted by the IS and

PC, still at a h igh level, de termining the direction for

h e e n s uin g FS, b ase d o n th e r e su l ts o f th e Rap i d

Ana lysis whi ch determi nes those EB Es whi ch offer

opportunities for improvement through the EI process.

T h is s tag e wi ll g ive d ir e c ti on f or th e FS an d wil l

determine nece ssary funding levels, resource comm it-

ments a nd schedul es.

The IS and PC review the findings from the Rapid

An a lys is ( wh i c h i s t h e h e a rt o f t h e P FS ) h a vi n g

ex am ined E I methodologi es ( A1 12 ) a nd the benefits

of EI, possible or con crete EI objectives and goals for

he org ani za ti on, etc. T he l ist of potenti al EB Es i s

n ve st ig ate d to d e c id e wh e t h e r th e r e is an EB E o n

wh ic h an EI p roc e ss is to b e c on d uc te d an d to

determine the most promising choice. This determina-ion is m ade by considering a num ber o f factors, such as

he ex pected va lue a dded by E I, the ava ila bil ity of

esources for the FS, the timing of com pany transfor-

mations, required levels of commitment for the FS, the

availability of necessary skills to do the FS, and overall

ma na gem ent objectives to be real ised by the compl e-

ion of the FS.

Once it is decided that there will be benefit from the

EI process, management choose which of the EBEs will

be investigated in m ore d etail in the FS and determine

h e c o n st ra in t s o p e r at in g u p o n t h at i n ve s ti gat io n .

Commi tment to the cha ng e process from the ma na ge-

ment of the chosen EBE (and those that interact with

t) wi ll be g ai ned as pa rt of this activi ty to reduce

potenti al poli tical probl ems. T he IS and PC shoul d

ensure satisfactory personnel are avai la ble for the

Fea sibi li ty Study Investi g atory T ea m (FSIT ) to be

formed from those personnel who are usually respon-

ible for policy-making in the EBE. The size of the FSIT

hould be small, e.g. three people for an investigation

period of two to three weeks. In the selection of these

peopl e, once could draw on potenti al m embe rs of the

atter to be established Stee ring Committee (SC).4

Guidelines for the FS are drawn up establishing the

objecti ves, required funding , required resources a nd

evel s of commi tmen t and a project schedul e i s a lso

constructed. T hese a re then pa ssed to other ma na g e-

ment whose commitment is required and necessary for

he successful completion of the feasibility study.

2.6. Seek approval for specific EBE feasibility study (A11 5)

This activity involves gaining organizational and

individual management approval (in the light of the FS

guideline s) for conducting feasibility studies within

specific EBEs.

It m ay be valuable to p rovide the details of these

guidelines to all organizational staff potentially affected

by the EI process. This exercise should play a part in

p r o m o tin g e m p l o ye e i n vo lve m e n t in th e c h an g e

process and subseque ntly reduce the level of cultura

resistance. Depending upon the cultural situation and

con text, approval for the FS may or m ay not h ave to be

sought from other u pper-level m anagem ent ( e.g. it may

be done under the auspices of the IS and the manager

of the selected EBE).

It can be seen that the FS is similar to the PFS with

ea ch successi ve pha se buil ding on the fi nding s a nd

information of the previous phases. The activities within

the FS u tilise the findings from the PFS, allowing theFSIT to obtai n i nformation quickl y a s the focus o

investigation is more defined.

3. EBE id en tification fe asibility study

Once the pre-feasibility study has shown that there

exists a poten tial gain to be der ived from ch ange within

an EBE and EI is the m ost approp riate m ethod ology for

change, a feasibility study is carried out outlining in

more detail the impacts and bene fits to flow from EI

The FS is condu cted at the individual EBE level so as to

ensure a greater level of specificity.

Manageme nt may decide to conduc t more than one

feasibility study in parallel. This paper describes the

process of how on e feasibility study is carried out for

one E B E sel ected by ma na g ement on the ba si s of the

PFS findings. The amount of review and investigation

wit hi n t hi s p h ase d e p e n d s u p o n th e IS an d P C

understanding of the current `AS-IS situation.

Much of the information to be elucidated may be

already available in recent company studies, strategic

business reports and other documentation which allowsthe tasks to then be `collate, complete and bring up to

date the already available information.

The objective of the feasibility study is as follows.

Determi ne the envi ronme ntal i nfl uence s on theEBE.

Highlight and characterise domains of activitya nd within these doma ins the operating proce

dures and processes of the EBE.

Re view the curren t strategic direction and policiesof the EBE and subsequently develop a n umbe r of


Note that the Feasibility Study may shed some detailed AS-IS analysis, which

would require additional e ffort by mem bers trained in the utilised analysis

method.


8/18

different scenarios, showing the most appropriate

and desirable TO-BE EBE forms.

Evaluate the costs and benefits to be gained fromeach such transformation process.

Nominate the transition objectives of each form. Devel op g uidel ines for use when the Pla nning

T eam a re desig ni ng the future form of the E BE

and are plann ing the actual transition p roce sses to

that form.

The FS will be con ducted u nde r the guidance of the

S and PC, by the FSIT. The leade r of the FSIT could be

eporting to the IS.

The feasibility study ( A12) is divided into six m ajor

tages ( figure 4) .

Appraisal of EBE Environment (A121) . App raisal of EBE Corporate Environme nt ( A122) . Development of EBE TO-BE Scenarios (A123).

Evaluation of TO -BE EBE Altern atives ( A124) . Provision of Guidelines for the Master PlanningProce ss ( A125) .

Decision to carry on with the development of anEBE Master Plan (A126) .

An additional activity (if necessary) is the trainingo f th e FSIT m e m b e r s in th e EI m e th o d olo gy

(A127).

3.1. EBE environmental appraisal (A121)

The main purpose of this activity is for the FSIT to

pi npoint the current environme ntal i nfl uences acting

u p o n t he EBE. T h e e valu atio n o f e ac h o f th e se

envi ronme ntal factors should i ncl ude a sta teme nt o

expected future trends which assist in the guidance of

the de ve lopm en t of future strategies and visions. Within

this stage the FSIT

reviews the market within which the EBE ope rates;

reviews the compe titive forces impacting on theEBE. For integration to m ake the best use of theorganizations resources, managem en t mu st have


Figure 4. Stages of the Feasibility Study.


9/18

a thoroug h understandi ng of their competitive

environm ent. It is the nature and structure of the

chosen industry (and how the organization deals

with these) that indirectly determine s the profit-

ability of th e orgainization. Profitability is strongly

i n fl u e n c e d b y h o w t h e o r ga n iz at io n o p e r at e s

within the five compe titive forces ( Porter 1980,

1985);5

reviews the current use of technology within theEBE

6relative to techn ology use in the comp etitive

e n vir o n m e n t to id e n t ify d e fic ie n c ie s, n e e d fo r

m o d e r nisatio n , o r e x p e c te d fu tu re n e e d fo r

change in this regard;

conducts an econ omic analysis to ascertain thep e r f or m a n c e p o si ti on o f t h e EB E wit h in th e

economic environment in which the EBE is acting;

cond ucts a govern me nt ( political) analysis to showthe curren t legislative and taxation constraints the

EBE ope rates within.

The last activity within this section is to condu ct a

ocial analysis of current social expectations impacting

he EBE,7

and human resources, work-force availability

and culture.

3.2. EBE corporate appraisal (A122)

The purpose of a corporate appraisal is to investi-

gate the internal factors affecting the current p erfor-

mance of the EBE. The purpose of this activity (A122)

c an b e su m m a r ize d as id e n t ifyi n g t he d o m ai n s o f

activity of the EBE, what processes are important within

hese domains, what is the current situation within the

domains of the activity, and finally, contrasting the

current perce ived mission, vision and value s with the

findings.

The first part of this activity includes an identifica

tion of the EBEs current domains of activity ( A1221)

The second step is a review of these domains (A1222)

Much of this re view is simply detailing the findings o

th e P FS , with t he vie w o f n o w fin d in g c on c r et e

objectives for cha ng e in the i nvesti gated doma in. A

review of the domains follows.

( 1) The FSIT define the boun daries of operation of

t h e se d o m ai n s d e l in e a tin g th e t an g ib le an d

intangible l inks be tween the EBE und er investi

g ati on and other EB Es as wel l a s a mong the

doma ins i denti fi ed (e .g . points of i nteraction

existing relationships and any significan t influ

en ces de em ed important by the FSIT). For each

dom ain, its busine ss process shou ld also be listed

at a h igh level.

( 2) The FSIT iden tify the b usiness goals and cr itica

success factors for the EBE an d its domains. For

e a c h d o m ai n , th e FS IT sh o u ld i d e n ti fy th einternal or external compe titive forces impact

i ng upon i t, a nd the competiti ve streng th the

domain currently has, as well as the competitive

strength the domain should have.

( 3) The FSIT assess the EBE through the character

i za ti on of ea ch doma in and, sepa rately, ea ch

busine ss process within these domains (Rolsta

das 1995, Bussler 1995) . The result will be a table

that states the most im portant observations o

the FSIT regarding the current state of the EBE

and its domains, showing FSIT opinions regard

ing:

the decision / management structure; i nformation and ma teri al f lows ( i .e. their

interfaces, control and other relevant prop er

ties);

economi c performa nce;8

human resource functionality;9

an d

other problematic areas.

T he FSIT shoul d not be l imi ted i n i ts considera

tions the observations m ay span e ach o r any aspe ct ofthe EBE, its dom ains, and business processes such a

l iste d i n th e e x am p l e sh o wn in tab le 1 o r i n th e

following subsections.


Porters Five Competitive Forces are: existing industry rivalry, potential

ntrants, suppliers, buyers, and substitutes. Management must consider the

ollective strengths of these five forces at the local and global level in order toenerate effective competitive strategies. With such information, management

re better able to formulate decisions assisting the organization in reaching its

bjectives.

What type s of techn ology the EBE is curren tly using, e.g. spe cific types o f food

echnology, information tech nology. Example in the Hospitality Industry, it is a

ubstantial aspect of technology that it is em ployed to facilitate e fficient an d

ffective customer employee interaction in attempting to raise the quality of

ervice (Olsen et al. 1992).

E x am p l e a c co r di n g to th e h o st c o u n tr y a n d c l ie n t c u l tu r e th e s o ci al

xpectations are intrinsically important in the pre-selection process that clients

onduct in the comparsion of hospitality enterprises whose services they intend

o use. Knowledge of host country and client culture assists in appraising the

eeds and expectations of present and future customers, which facilitates the

evelopment of a good image of the organization. Continual m aintenance of

his notion of image will assist the organization in achieving its objectives.

8To identify (possibly through a Value Chain Analysis (Porter 1985)) the

contribution to the value produced or cost incurred to the product of the EBE /domain / process and to identify the resource usage (possiblythrough using RO

or re source utilisation charts) .9

It is important for managemen t to see whether the EBE has all the necessar

b u si n e ss fu n ctio n s p r e se n t th at s h ou l d b e c o n tr ib u ti n g to i ts p r o du c ts o

services.


10/18

This second step (resulting in a table l ike table 1)

allows the FSIT to decide whether the AS-IS situation is

clearly und erstood, and results-in the de cision on wh ere

o ( a n d n o t to ) u n d e r take a m o r e th o r ou g h AS-IS

an alysis.

Note that an AS-IS analysis m ay have two objectives,

o obtain:

( 1) A model reflecting the curren t state of affairs in

the analysed en terprise d omain; resulting in a

deepe r understandi ng by mem bers of the FSIT

of their own enterprise.

( 2 ) For the FSIT to g ai n ex pertise i n how to use

enterprise model l ing for thei r ana lysis of the

business domains.

I f t h e FSIT is in e x p e r ie n c e d i n m o d e l lin g an d

analysis, then the second gain alone is worth the effort.

As a result the FSIT wi ll see the va lue of appl yi ng

ana lysis a nd mode l ling i n the subsequent EI Master

Planning process. They will also gain some proficiency

n applying analysis methods to the particular business

domain.

It ma y ha ppen that the FSIT real ise: the current

domain is in such a bad state (5 ) that more AS-IS analysis

s not l ikely to contribute to any improvement. In this

case the AS-IS a na lysis ma y be abandone d but the

opp ortunity of training on the AS-IS analysis m ust be

replaced by another form of training ( e.g. through the

study of existing textbook models). If the FSIT expects

im p ro ve m e n t o f th e d om ain to b e ac h ie ve d o r is

un certain in its characterization ( ? in table 1) , an AS-IS

analysis is performed. If the domain is judged perform

ing to the satisfaction of all parties ( 4 in table 1) there i

no need for AS-IS analysis (or change) in that domain.

Every such AS-IS analysis results in a representation

of the domain which is then assessed on its own right

( e.g. are there any structural problem s, m issing links

qualitative or quantitative deficienc ies etc?) and com

pa red to other simi lar doma ins of other enterprises

using benchmarking techniques.

3.2.1. Review of decisional/management structure. T o c o mplete this type of AS-IS analysis, the FSIT should review

th e d e c is io n an d m an ag e m e n t str uc tu re ( c o n tr o

hierarchies) of the EBE and its domains for which an

AS-IS an alysis was de em ed ne cessary. The analysis wil

identify the existing chains of authority and spans o

control which affect the communication and informa

t io n c h an n e l s wit h in an d b e twe e n th e d o m ain s an d

i dentify the deci si ona l centres a nd deci si ona l roles

within the domains as well as their conn ections.

A GRAI-grid ( Doume ingts et al. 1995, MacIntosh

and Carrie 1995, Bernus et al. 1996) may be u sed in this


Table 1. EBE observations (Legend; 4 Good, 5 Bad, ? may need improveme nt).

Domains of activity

Decisional/management

structure

Information

an d

material

flows

Economic

performance Functionality Other

Present and

necessary

Present,

n ot

necessary

Not

necessary,

present

Quoting/ Bidding 5Service 5

Strategic market planning 5

Support Management 4 4 4 4 4

Strategic m an age m en t 4 4 ? ? 4

Quality management 5

Financial and economic

management

4 ? ? 4 4

Research and development

Prod uct deve lop m ent 4 ? ? 4 ?

Technological

development

4 ? 4 ?

Internal services 4 4 4 4 4Human resources

management

4 4 5 5

Technological

development

4 5

Main te n an ce 4 5 4 4


11/18

analysis. Based on this assessment, the FSIT can `map

he current E BE s organi zation onto a GRAI-g rid,

a b e ll in g t h e EB E s o r ga n i za ti o n al u n i ts ( p e o p l e/groups) with `roles in this map. This analysis normally

allows for the identification of problem points, e.g. the

FSIT can, through this analysis, ide ntify non -contribut-

ng roles, confli cting roles, i nconsistent deci siona l

frameworks, etc. Analysing the decision mode l of the

present EBE ( domain of activity) allows the FSIT to

answer part of the questions of the People Capability

Maturity Mode l ( PCMM) ( Curtis et al. 1995). A PCMM

s a mode l describing various levels of organizational

m at ur ity r e gar di n g h o w it m an ag e s its h u m an r e -

ources. Further answers to the PCMM can be derived

from the functi ona li ty ana lysi s bel ow a nd from the

environmental analysis A1216.

3.2.2. Rev iew of in formation an d material flows. The FSIT

dentify the information and material flows within and

between the domains of activity to show (from a logicalview) their interfaces. Th ere are two typical problem

ypes that can be pinned down in this analysis step:

( 1) The interfaces (information and material flow)

within the a nal ysed EB E a nd doma in are not

well defined (e.g. information and material flow

ar e n o t c o or d in at e d , t he d at a an d m a te r ia l

exchange is based on ad hoc methods, etc.).

( 2 ) T h e in t e rf ac e s ar e d e f in e d , b u t d a ta an d

m a te r ial e x c h an g e is i n e ffic ie n t ( e . g. d u e t o

too m any process steps, bottlenecks, inefficien t

technology, etc.).

T he i denti fi ca ti on of these probl ems ca n be done

hrough:

( 1) qualitative information and material flow m od-

e l s o f t h e d o m ai n ( e . g . I DEF0 , Da ta Fl ow

Diagrams, CIMO SA functions and information

views ( Ver nadat 1995) , Petri Nets, Entity re la-

tionship- or Object-oriented schem ata) ;

( 2) quantitative analysis ( m ostly achievable through

si mulation model l ing ) to cha ra cteri ze the i n-formation and material flow in the domain (e.g.

using CIMOSA, Timed Petri Nets, GPSS/ SIM-SCRIPT, GERT/ QGERT, e tc).

3.2.3. Rev iew of economic performan ce. The FSIT review

he economic performance of each domain of activity

for which an AS-IS analysis was d ee m ed ne cessary. Th e

FS IT sh o u ld i d e n ti fy i f t h e r e e x i st s p e r fo rm a n c e

ndicators and corresponding criteria at all to measure

h e p e r fo rm a n ce o f t h e d o m ain . If n o su c h c rite r ia

exists, the n the FSIT must develop perform ance criteria

t o m e asu r e th e p e r fo rm an c e o f t h e d o m ain . T h e

pe rformance crite ria should be e valuated to assess the ir

validity as they are ope n for customization according to

the domain; i.e. not all performance indicators/ criteriaar e ap p lic ab le in al l d o m ain s . If th e p e r fo rm a n c e

criteria are not being me t, it indicates the domain m ay

requi re chang e.

A useful wa y of deri vi ng economi c performa nce

indicators ( and identifying performance drivers) is for

the FSIT to create an Activity Based Costing ( ABC)

mod el of the investigated domain or process (Lucertini

et al. 1995) . The ABC mode l could e ither be separately

created or a s an ex tension to function a nd resource

mod els ( e.g. CIMOSA) created as part of the informa

tion and material flow analysis.

T he dev el opment of a new performa nce mea sure

me nt system is of course not the task of the FSIT ; i

could be done by the Master Planning team as part of

the EI Programme.

T o su m m a r iz e , e ith e r t h e re a re p e r fo r m an c eindicators, which can be used to benchmark the EBE

against comp etitors and expected trends ( in which case

ben chm arking is used to assess the nee d for change) , or

t h e re ar e n o p e r fo r m an c e in d ic ato rs ( o r t h e re e x is

only partially de ve loped one s) in which case the ne ed

to de velop these is part of the task of the e nsuing m aster

plann ing process.

3.2.4. Rev iew of hu man resource fun ctionali ty. T he huma n

resource functionality is reviewed from the point of view

of the huma n resource structure, functi on a nd roles

(Curtis et al. 1995) showing how the domain operates at

the leve l of the orgaizational actor i.e. the individua

i n th e o rgan iz ati on ( a s t h e re m a y b e a n u m b e r o

h u m an -c e n t re d p r o d u c tio n an d se r vi ce p r o c e sse s )

Note that even though a similar type of analysis has

been ca rri ed out for huma n ma na g ement rol es i n the

first step ( decisional mode l), this analysis looks at the

individual in the service / production process.In t h is st e p , th e FS IT sh o u ld c o n si d e r h o list ic

asp e c ts as we l l as th e h u m a n r e so u rc e , as it o fte n

h a pp e n s th at u n e x p lain e d ( i .e . n o t m o d e lle d o r

q u a n ti fi e d ) c h ar ac t e ri sti cs o f th e h u m an r e s ou r sei n flu e n c e t h e se r vi ce / p r o d u c ti on . W e a rg u e t h atpersona li ty a nd ma na gem ent intuition shoul d not be

disregarded in a m isguided quest for quantifying e very

d e c isi on . S h ou l d th e q u an t ifie d asp e c ts an d th e

i ntuitive a spects of the ana lysis be i n conflict, this

a ctivi ty w il l shed li g ht to probl ems that need to be

confronted.

3.2.5. Summa ry of AS-IS an alysis. It is expected that these

analyses will fill in the gaps in the understanding of the

curre nt AS-IS situation within the EBE ( there will be no



12/18

question marks `? in table 1). If a more detailed AS-IS

ana lysis i s requi red, the FSIT review i n more depth

hose items identified with a question mark `? in the

previous activity.

The findings from these investigations and reviews

can now be contrasted wi th the currentl y perceived

mi ssion, vi si on a nd val ues of the EB E10

(A 12 24 ) to

d e n t if y t h o se p r oc e ss e s wh i ch d o n o t c o n tr ib u te

owards compe titive advantage or the performance of

which is not to the desired level. The FSIT also identify

hose dom ains of busine ss activity which should have

clearly define d p erforman ce indicators, but do not h ave

hem (note: this is not always achievable).

O n t h e p r e se n t c o rp o ra te ap p r aisal l e ve l i t i s

desirable to identify not only the problem performance

ndica tors but a lso the problem drivers. T hi s i s so,

because i t i s those doma ins of a ctivi ty (or processes

wi th i n th o se d om a in s) th at n e e d c h an g e wh i ch

encom pass the performance drivers at fault.

In those enterprises whi ch a lready do ha ve wel ldefined processes, the corporate appraisal could unveil

he processes with the performance drivers that cause

c on c e r n . T h u s c o n d u ct in g an an alysi s h e r e h a s th e

poten tial to iden tify a relatively smaller area that n ee ds

c h an g e . It sh o u ld b e ke p t in m i n d th at si gn i fic an t

p e rf or m an c e d r ive r s m ay b e o u tsi de o f t h e give n

domain.11

However, the enterprise may not be at the level of

maturity of `operating well defined processes (Paulk et

al. 1 9 93 ) i n whi ch case the ` too de ep a nal ysis of the

p re se n t si tu atio n m ay n o t p ro m ise m u c h an d th e

change should be directed to `defining processes as a

priority in the change process.

A valid reason for un dertaking an EI p rogramm e

may be to bring the EBE from one level of maturity to

he nex t (Pa ul k et al. 1 9 9 3 ). It w i l l then be up to the

master planning team to ensure that the performance

drivers with significant impact on performance indica-

ors of the EBE be com e con trollable in the TO-BE state

of the EBE.

This allows not only the identification of potential

areas of improvem en t but also the ability to recognize

non-value-adding processes as an organization profitsfrom successful competition and efficient utilization of

esources (Sa g er 1 9 9 0 ) (note: the empha si s here i s to

ecognise any problems, contradictions, missing details

etc., n ot to solve them) . Importantly though, it is not

advised to take a dogmatic view of value adding, value

c an b e ad d e d in f or m o f t h e p r od u c t o r i n f or m o f

creating future capability whe re the consume r of the

product is the future enterprise.

T h is su b se c t io n g ave d e t ail s o f t h e c o rp o r at e

appraisal. The result o f this appraisal allows the FSIT

to clearly see if there is any strategic gap between the

current practices and the perceived current ope rationa

m ission, vision and value s (H owe 1986) . The result wil

then be used to direct the change within the EBE.

3.3. Develop EBE T O-BE scenarios (A123 )

The central component of this activity involves the

developmen t of alternative EBE TO-BE scenarios. A

num ber of TO-BE scenarios ( future desired states) can

be developed to facilitate various identified opportu

ni ti es a nd to al low for the eva lua ti on of strategi c

alternatives.

This activity involves the identification of significant

opportunities ( Gasser and Majchrzak 1995) for EBEchange (incorporating the high level vision which was

t h e d r ive r b e h in d th e P FS ) . T h e o p po r tu n itie s fo r

cha ng e are ma de ex pl ici t through the envi ronme nta

a nd corporate assessmen ts A1 2 1 (i f trends or fore

casts indicate ch ange is required ) , and A122 ( if strategic

gaps are appare nt) . The activityre quires the re cognition

o f an y c o n st ra in t s t o EB E c h an g e p r oc e ss ( s oc ia

exp ectations, legislative con strain ts, etc.) and conclud es

with the generation of alternative EBE TO-BE scenarios

3.4. Ev alu ate EBE alternatives (A124 )

Each E BE T O -B E scena rio i s eval uated a s to it

viability regarding its costs and ben efits and imple me nt

ability in the give n organizational con text. This e valua

t io n wil l u se th e r e su lt s o f th e e n vir o n m e n tal an d

corporate appraisals i.e. does the known EI m etho

dolog y handl e the type of cha ng e required and i s the

me thod impl eme ntabl e i n the orga ni za ti on? and a

few other specific influencing factors treated below.

T he activi ty beg ins wi th a cost/ ben efits analysis

(A1241) for each desired EBE TO-BE scenario to assessthe costs of undertaking EI within the EBE in view of

the identified be ne fits.

The FSIT also analyse the imm ediate e nviron me nta

variables (A1242) of the EBE, to find out whether they

will influen ce the se lection of the most appropriate EBE

TO-BE, as follows.

The FSIT con sider the causes and leve ls of syne rgyand coh esion throughout and between interacting

business domains. The FSIT should consider the

current situation as well as the structure inhe rent


0If applicable.

1This indicates strategic instability for the enterprise.


13/18

in the EBE TO-BE scenario. Example, if change is

need ed i n one doma in ` D , how wi ll thi s effect

other doma i ns, a nd w i l l these other doma i ns be

able to absorb the r esulting ch ange e ffects, such as

their usual way of interaction with the dom ain `D,

Such consideration u sually results in an escalation

of the chang e process to doma ins nei g hbouring

the one that is fundamentally altered. The result

will show the FSIT the scope of change that the

FBE should go through.

The FSIT tries to identify internal social func-tions to un der stand the c onstraints and limitations

that influen ce an d d ictate a successful EBE chan ge

process (e .g . Ci borra 1 98 4 , B rodwi n and B our-

g e oi s 1 9 9 1 i n O l se n et a l . 1 99 2 , Alt e r 1 99 2 ,

Bergquist 1993, Hasan and Cheung 1993).

T he FSIT i denti fy the power and political con-structs (ba sed on the ma na g ement a nd deci si on

structure) as analysed in A12221 to see how these

influence the daily work practices in the organiza-tion as the y may impact on the successful change

process ( Morgan 1986, Vallen and Vallen 1991,

Olsen et al. 1992, Walsham 1993).

The positive and negative effects of the possiblec h an g e sc e n ar io s o n t h e p o we r c u lt ur e o f t h e

organization are identified. The FSIT should be

able to tell, by the end of the activity, what forces

wi ll su p p or t an d wh a t f or c e s will o p p ose th e

change and why.

An analysis is include d of the group d ynam ics andorganizational leadership issues which must be

allowed for as they may impact on the successful

c h an g e p r o ce s s ( e .g . P fe ffe r 1 98 1 , Fr an z an d

Ro b e y 1 98 7) . T h e FSIT sh o u ld id e n t ify th e

p e r so n n e l , wh o t h ro u g h l e ad e r sh i p q u al it ie s

woul d carry the cha nge process ( both techni cal

and managerial leadership is to be identified). If

certain qualities are not p resent, this ne eds to be

clearly stated.

This analysis can be used to achieve two goals. It can

b e u til ise d to r e fin e t h e id e n t ific atio n o f t h e m o st

ui ta bl e T O -B E scena rio, and i t ca n be uti li sed todentify those factors that need to be considered during

he change process.

Resulting from the above two activities ( A1241 and

A1242) the mo st satisfying EBE TO -BE sce nario is the n

p r op o se d b y t h e FSIT ( e . g . t h e r e su lts o f t h e c o st/bene fits analysis ( A1241) and the EBE en vironme ntal

variables analysis ( A1242) may show that even though a

certain form of an EBE TO-BE scenario is prom ising to

b e t h e m o st b e n e fic ial in t e rm s o f c osts ; th e EBEs

culture, structure and political processes may not allow

for smooth transition).

For the selected scen ario, the FSIT should iden tify a

first-cut set of transition requ irem en ts and objectives

The transition (EBE TO-BE) requireme nts and objec

tives are formulated to meet A121 (EBE Environmenta

Appraisal) and A122 ( EBE Corporate Appraisal) find

ings. These transition objectives will be utilised later in

d e fi n in g th e EB E T O -BE i n th e Mast e r P la n n in g

process.

T he F SIT coul d col l ect i n one document the E B E

Transition objectives and selected EBE TO-BE scenar

ios, this will form a section o f the FS Rep ort ( see A125)

The docume nt will de scribe the following.

Future business objectives and plans for the EBETO-BE.

Selected EBE TO-BE scenarios. Future long-term capital goals of the EBE TO-BE Fu t ur e str at e g ic d i re c t io n a n d p o li c ie s to b e

implemented in the EI Master Plan.

Future system architecture and standards of theEBE TO-BE. EI Master Plans critical success factors ( these

CSFs are those which m ust be re alised in orde r for

the EI Master Plan to be successfully completed)

EI Master Plans long-term requirements.

3.5. Establish gui delin es for the EI master plan n in g process

(A125)

T h e e st ab li sh m e n t o f th e g u id e l in e s f or th e EI

Master Plann ing process involves the pre paration o f the

Feasibility Study Rep ort, which include s the following.

( 1 ) Th e re su lts o f th e ap pr aisal o f th e EBE

en viromen t ( A121), the EBE corporate apprai

sal (A122) , the developmen t and feasibility of

a se le c te d EBE TO -BE sc e nario , an d th e

i dentification of the EB E tra nsi tion (A 12 3

A1 24 ) . E ach of these ha ve been prepared in

the activities described in the previous section

The results will assist in gaining manageme nt

c o m m i tm e n t s h owin g th at t h e re is a vi ab lea nd val id opportunity for enterprise i nteg ra

t io n with in th e o rg an izat io n to e n su re it

maintains its compe titive advantage as well a

capturing the organi zational mi ssion, objec

tives, strategies, goals, critical success factor

etc.

( 2 ) C on c r e te p la n s f or an EI Mas te r P lan n i n g

process are established, including the required

resource levels, funding, management commit

me nt, a nd a prel imi na ry schedul e for Master

Planning.



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( 3) Nomination of the EI Steering Committee ( SC)

wh o sh al l o ve r se e t h e E I Ma st e r P la n n in g

p r oc e ss a n d o f th e Ma st e r P lan n i n g T e am

( MPT) who will carry out the master plann ing

task. T he nomi nation i nvolves the g ai ning of

m a n ag e r ial c o m m i tm e n t o f t h e SC an d MPT

me mbe rs, based on clearly stated objectives of

the Master Planning proce ss as developed above.

3.6. Seek approv al for specific EBE EI master pla n n in g ph ase

(A126)

Final approval for the EI Master Plann ing ph ase is

hen soug ht, based on the FS Report. T his i nvol ves

gainin g organizational an d in dividual EBE m anagem en t

approval for conducting Enterprise Integration Master

Planning upon a specific EBE. This approval should be

gained in the light of the guidelines as provided in the

FS Rep ort ( see A125) and is the initiating decision tocomm ence the Master Planning. Within this stage, it

may be valuable to provide the details of these guide-

in e s ( d i st rib u te c o p ie s o f t h e FS Re p o r t) to al l

o r ga n iz at io n a l st af f p o t e n ti al ly a ff e c te d b y t h e EI

process. As above, this exe rcise should play a part in

promoting employee involvement in the change process

an d subseque ntly redu ce the level of cultural resistance .

Mintzberg ( 1994, pp. 207 208) writes `planning has

generally garnered its greatest support when conditions

have been relatively stable. By this statement Mintzberg

ncorporates the ideals that `planning works best when

t ex trapol ates the present or dea ls wi th i ncremental

change within the existing strategic perspective.

Managem en t comm itme nt is therefore accumulated

when it is convinced that the orgainization can handle

chang e, i .e. when ma na g ement see that ei ther ( a) the

desired state of modu s operan di is not `too far from the

c u rr e n t st at e , o r ( b ) a viab le m e t h o d o f t ran si tio n

between states is available.

4 . C o n c lu s i o n s

T h e ab ove m e t h o d olo gy h as b e e n d e ve l op e d in

more detai l a t Gri ffith University i n the form of a

process model for the purposes of a dissertation, and

epresented as a network of functions tha t coul d be

unde rtaken by the change age nts of an en terprise. This

mode l of initiating ch ange allows for the prerequisites

for the establishment of the initial EI programme to be

atisfied as described in Williams (1994a, sect. 2.1).

T h e r e ad e r sh o u ld n o te t hat i n m o st r e lative l y

healthy organisations the information needed to carry

out this change-initiation process is either available or

relatively easy to obtain. A typical estimate for the effort

a nd resources needed w oul d be a bout 2 to 4 months,

where the Pre-Feasibility Study is done in 6 weeks by the

IS and PC, taking a few hou rs a wee k on be half of the IS

and full-time for the PC. The FSIT would then commit

3 or 4 ma na gem ent l evel pa rticipa nts, working i n a

group for 3 to 4 hours a wee k and an additional one day

a we e k c o m m itm e n t fo r 1 .5 to 2 m o n t h s. T h e tim e

spent by the FSIT should include some initial informa

tion sessions, held by the IS and PC and the chair of the

FSIT should prepare instructions and schedule for the

FS for each team me mbe r. The FSIT then writes up its

report ( estimated to take up 1.5 weeks at the end of the

FS acti vity) .

Below is a summary of the results of the `Identifica-

tion of the E BE stag e of the enterprise i nteg ration

process.

T h e o p e rat io n o f th e o rga n izati on h a s b e e n

assessed in terms of external and internal forces. A decision ha s been ma de as to the necessity o

undergoing a coordinated change process effect

in g o n e o r m o r e o f t h e b u si n e ss e n t i tie s o f th e

company.

The most appropriate m ethod for that change h ab e e n d e ci de d as we ll as th e c h an ge m e t ho d s

ben efits, standard s, etc.

The current (strategic and operational) problemshave been highlighted.

The organizations strength s and weakne sses h avebeen highlighted.

T h e p e r fo rm a n c e i n d ic at or s an d p e r fo rm a n c edrivers have been identified (in order to measure

fu tu r e su c ce s s w h ic h c an b e e x p re sse d via im

provement in terms of the performance variables

that are aligned with a given set of strategies).

The direction of the industry sector in which theorganization rests has be en assessed , as well as the

expected trends have been identified.

A p r e lim i n ar y EBE T O -B E sc e n ar io h as b e e ni dentified a nd a ssessed subjectivel y a nd objec

tively.

P re l im i n ar y c o st s an d b e n e f its o f th e c h an g eprocess have been assessed.

T he orga nization s g oal s, to be i mpl emented byEI, have been communicated.

The critical business and corporate issues, strategies, and critical success factors of the organiza

tion and the EBE have been identified.

T he ski ll a nd knowl edg e base of the empl oyee shas bee n assessed via their structure, fun ction and

roles.

The organization culture has been assessed for itsresistance or acceptance to change.



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The cultural seed of change vital for acceptanceand consensus has been acknowledged.

Guidelines for the master planning process havebeen established.

Management expectations for the proposed pro-ject have been identified.

T op ma na g ement i nv ol v ement a nd commi tmenthas bee n established.

T he ` Establi shm ent of the Initial Prog ra mme i s

eady to begin. The `Ide ntification of th e EBE stage h as

concen trated on the following.

Assessing the change methodology. The competitive market and other relevant forces. The readiness and amenability for organizational

and EBE change.

T he orga nizationa l g oals and objectives to beimplemented by EI.

The desired TO-BE state of the EBE.

T h e I S an d P C wo u ld alr e ad y h a ve m u c h o f t h e

equire d in formation as well as econ om ic, strategic, and

an alytic in ve stme nt justification ( as note d in William s

994) . The identification and selection of the EBE has

been ma de, al ong wi th the nomi nation of potential

mem bers of the EI Steeri ng C omm i ttee a nd Master

Planning Team.

T he chang e a ssessment methodolog y presented i n

his article corresponds to the identification layer of

PERA and GERAM, and can be applied to both existing

and `green-field operations. AS-IS analysis in the green-

field case may be applied to earlier designs (e.g. when a

compa ny deci des to bui l d a new pl a nt). T hi s cha ng e

ass e ss m e n t m e t h o do lo gy c an b e ap p l ie d i n m an y

different industry sectors, as the pre-feasibility study

and feasibility study are not industry specific. In fact the

fi rst version of the methodol og y was i ntende d to be

ervi ce (h ospital ity) i ndustry speci fi c, but as work

progressed, it tra nspi red that the basic processes of

change assessment are indeed the same in service and

manufacturing industries partly because more and

more of m anufacturing industry is incorp orating servicecompon ents, while the service industry is taking over

echn ologies traditionally rooted in m anufacturing, and

partly because integration requires in both industries

h e su c ce s sfu l tr e at m e n t o f p r od u c t an d r e so u rc e

m an a ge m e n t , o f c o-o rd in a tio n an d o f th e h u m an

organizational component.

Identification layer activities may be carried out in a

phased approach to lay good foundation of the ensuing

more detailed change process, such as specified in the

uccessive en terprise life -cycle layers. T he PFS and FS

den tify policies and requ irem en ts, with de cisions made

o n p ar t ia l ( b u t i n fo r m at ive ) d a ta wi th i n c re a si n g

definition as progress is m ade through the activities

allowing for intra-phase and interphase comm unica

tions (w hich a re crit ical i n the preli mina ry de sig n

phases).

This level of communication allows for the users to

make explicit the hidden requirements that have gone

unnoticed over t ime, a s compa ny personnel know the

`workarounds in the current AS-IS scenario without

these bei ng percei v ed or know n i n deta i l by ma na g e

m en t. Con ve rsely, m anagem en t goals and o bjective s are

not always linked to activities of the operational level

thus a sub-optimal company culture is sustained. `True

and lasting change com es whe n those inne r and hidden

a ssumptions ( or beli efs) and va lues are cha ng ed a nd

t h at th i s c an o n ly b e ac h ie ve d th r ou g h a sh ar e d

u n d e r s ta n d in g ( C o o p e r 1 9 95 i n r e vi e wi n g S ch e i n

1985) .

We have shown a detailed model of how change can

be initiated in an enterprise and how this process fitsinto a larger process called Enterprise Integration. We

h a ve st ar te d f ro m a c o m p le t e e n t e r p rise l ife -c yc le

reference architecture ( PERA and GERAM) , concen

trated to th e first iden tification laye r of the life-cycle

and produced a process model of the pertinent part of

the methodology, which could be called a methodology

for change assessem ent.

The need for such a model is justified through the

fact that usual methodology handbooks either; (a) do

not operationalise the activities to be carried out by

ma na gem ent, a nd therefore a re of l ess hel p than they

c o u ld b e , o r ( b ) t he way o f t e xtu al p r e se n t at io n o

methodologies leaves many questions open, especially

as for the information needs of methodological steps

and the information links between these steps (Keller

and Detering 1995).

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Ap pe ndix A: Activity list

A0 Develop Master Plan

A1 Identify EBE

A11 Conduct PFS

A111 Investigate Project

A1111 Initial Discussions

A1112 Identify Value of Undertaking Change

A1113 Identify Possible Methods

A1114 Select Most Appropriate Method for change

A112 Examine E1 Particulars

A1121 List Generic Benefits of E1 in Given Industry

A1122 Identify Current Enterprise Integration Guidelines & Standards


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A1123 Iden tify Possible Enterprise Integration Objectives

A1124 Determin e Goals for Enterprise Integration Activities

A1125 Deve lop Action Plan for Ente rprise Integr ation Pre-Fe asibility Study ( Rapid Analysis)

A113 Con duc t Pre-Fe asibility Stud y ( Rapid Analysis)

A1131 Examin e Organizational Status Quo ( AS-ISh igh leve l)

A11311 Review Curren t Business and Marketing Strategies

A11312 Conduct SWOT Analysis

A11313 Condu ct Industrial Tre nd s Analysis

A11314 Review PI and PD for given Organizational and Industry Sector

A1132 Determine Value of Enterprise Integration within Context-Specific EBEs

A11321 Identify and List All EBEs

A11322 Assess each EBE

A11323 Identify Existing Strategic Direction and Policies for each EBE

A11324 Evaluate 112, 1131, 11 32 findin gs

A11325 Nominate Potential Change EBEs

A1133 Prepare Rapid Analysis Report

A114 Determine Viability of Undertaking Enterprise Integration

A1141 Evaluate Preliminary Direction for Feasibility Study

A114 11 Re vie w Rapid Analysis Find ing s

A11412 Evaluate Alternatives for Feasibility Study (FS Options)A11413 Determin e Preliminary Direction for Feasibility Study

A1142 Establish FS Proposal

A11421 Seek Management Commitment for Feasibility Study

A11422 Seek Other Necessary Commitments for Feasibility Study

A11423 Selection of Feasibility Study Investigatory Personnel

A1143 Prepare Feasibility Study guidelines

A11431 Docume nt Objective s of Feasibility Study

A11432 Docume nt required Resources

A11433 Docume nt required Fundin g

A11434 Document required Commitment

A11435 Docume nt Schedule

A115 Seek Final Approval for Specific EBE Feasibility Studies

A12 Conduct Feasibility Study

A121 EBE Environmental Appraisal

A1211 Conduct Market Analysis and Expected Trends

A1212 Conduct Competition Analysis and Expected Trends

A1213 Conduct Technology Analysis and Expected Trends

A1214 Conduct Economy Analysis and Expected Trends

A1215 Conduct Government Analysis and Expected Trends

A12151 Conduct Legislation Analysis and Expected Trends

A12152 Conduct Taxation Analysis and Expected Trends

A1216 Conduct Social Analysis and Expected Trends

A122 EBE Corporate AppraisalA1221 Identify EBE Domains of Activity

A1222 Review Domain of Activity (if necessary)

A12221 Define Boundaries of ope ration for e ach domain

A12222 Review Business Goals and Critical Success Factors

A12223 Characterize each domain of activity

A122231 Assess Decision and Management Structure

A122232 Assess Information and Material Flows

A122233 Assess Economic Performance of Domain

A122234 Assess Human Resource Functionality of Domain

A1223 Comp lete AS-IS analysis ( if re quired)

A1224 Contrast curre nt Mission, Vision and Value s to A121, A1221 and A1222


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A123 Develop TO-BE Sce narios

A1231 Identify Change Opportunities

A1232 Iden tify Change Constraints

A1233 Generate Alternative TO-BEs

A124 Evaluate EBE Altern ative s

A1241 Conduct Cost/ Ben e fits An alysisA12411 Select App ropriate Cost/ Benefits Technique for E1 ContextA12412 Conduct/ Obtain Cost/ Benefits Analysis on EBEA12413 Review Results of Cost/ Ben e fits An alysis

A1242 Conduct Environmental Variables Analysis

A12421 Conduct Structural Analysis

A12422 Conduct Cultural Analysis

A12423 Conduct Power and Political Analysis

A12424 Conduct Organisational Behaviour Analysis

A1243 Select EBE TO-BE

A12431 Assess feasibility of scen arios in ligh t of en vironm en tal variable s

A12432 Select Most Suitable EBE TO-BE Scenario

A1244 Establish EBE Transition Objectives

A12441 Iden tify Future Busine ss Objectives and Plans

A12442 Identify Long-Term Capital GoalsA12443 Indent Strategic Direction and Policies to be Implemented by E1 Master Plan

A12444 Define Future System Architecture and Standards

A12445 Define Critical Success Factors of EI Master Plan

A12446 Define E1 Master Plan Long-Term Requirements

A125 Establish Guidelines for Maste r Plann ing Process

A1251 Prepare FS Report and Master Planning Guidelines

A12511 Collate Objectives of Master Plan

A12512 Docume nt re quired Resources

A12513 Docume nt re quired Funding

A12514 Document required Commitment

A12515 Document Master Plan Schedule

A1252 Create Steering Committee and Master Planning Team

A12521 Docume nt Objectives of EI Steering Committee and MP team

A12522 Nominate Steering Committee and MP Team Members

A12523 Seek Management Commitment

A126 Final Approval for Specific EBE Enterprise Integration Master Plann ing Phase

A13 Establish Initial Programme

A2 Develop EBE Concept

A3 Develop EBE Definition

assessing the ne cessity of enterprise change

Documents