Providian Trust Case:Providian Trust Case:Project Management and Project Management and Organizational ChangeOrganizational Change

BA 652BA 652

Fall 2008Fall 2008

AgendaAgenda

• Announcement – Next Thursday

• A3 reports of Access Plus Implementation

• Review of Facts of the Case

• Project Management Issues

• Business Process Change Issues

• Current Situation

• Characteristics of Successful Change

Next Thursday – Guest SpeakerNext Thursday – Guest Speaker• Brian BlueBrian Blue

– 1970 Economics Major from NAU CBA1970 Economics Major from NAU CBA– Worked at Macy’s from 1971 until 2007Worked at Macy’s from 1971 until 2007– Retired as Macy’s Group Vice PresidentRetired as Macy’s Group Vice President

• He has done a number of implementations of the He has done a number of implementations of the type we have been reading about in our cases.type we have been reading about in our cases.

• His resume is in your email this morning.His resume is in your email this morning.

• Assignment: Develop two questions for him after Assignment: Develop two questions for him after looking at his resume. Due Wed.looking at his resume. Due Wed.

Team Plans for 90 day Delay in Team Plans for 90 day Delay in Access Plus ImplementationAccess Plus Implementation

• Team 2

• Team 1

Project FactsProject Facts

• Size– Implement of Access Plus by Select One – 18 mil start 1993 (12 mil spent by 5/1995)

• Organization– Steering Committee (LeBlanc VP Trust & Inv)– Implementation Committee (LeBlanc)– Project Team (Todd Benari VP Trust

Operations)

Back Office Dominant

Project FactsProject Facts

• Project Impacts– Purpose

• Increase customer service• Centralize financial/statement/client administration• Reduce workforce by 180 FTE

– Process Changes• Move client control to back office• Transform trust managers to client relations• Software precondition to process changes

How does Access Plus fit with How does Access Plus fit with Providian’s Business and Providian’s Business and

Organizational Strategies?Organizational Strategies?

Business Strategy

Organizational Strategy

Information Strategy

Project Management IssuesProject Management Issues

• What did you identify as the most critical shortcomings of Providian in managing this project?

BA 652 Fall 2008BA 652 Fall 2008 99

A Project Management ViewA Project Management View

• Why do 84% of IS projects fail or don’t meet original expectations?– Lack of clear system requirements– Lack of User involvement– Lack of management or executive support– Lack of thorough and detailed project plan– Unrealistic estimates about cost of schedule

Project Management IssuesProject Management Issues

• Are there current problems with the organizational structure of the project?

• Are all aspects of the organization represented on committees and analysis teams?

• What is the level of executive support from Walsh?• Are there issues with the HR job selection process?• Do issues exist with composition and delivery of

training?• What level of formality should exist in project processes?

Project Management IssuesProject Management Issues

• Project Organization– Insufficient representation of “front office” personnel

on Steering, Implementation, and project team.– Dysfunctional Steering committee– Lack of executive support from Walsh

• Project Processes– Lack of user involvement from client services– HR screening and selection of new work force flawed – Trust officers not included in SWE– Training not offered just-in-time with equipment in

place

Project Management FormalityProject Management Formality

Resistance to Change:Resistance to Change:Employees resent and resist change when:Employees resent and resist change when:

– The purpose is not made clear– They are not involved in the planning– The appeal for acceptance is based on personal

reasons– Habit patterns of the work group are ignored– There are poor communications regarding the change– There is fear of failure– Excessive work pressure is involved– The cost is too high or reward is too low– The present situation seems satisfactory

Source: Industrial Management, March, 1966

Business Process Change IssuesBusiness Process Change Issues

• How will the delivery of client services change at Providian after the system implementation?

• How has the job role and associated skills changed for the trust officer?

• Will clients be treated differently under the new system? If so how will this affect their loyalty to Providian?

Business Process Change IssuesBusiness Process Change Issues

• Organizational Process Impacts– Transfer client control from personal trust officer to “back office”– Trust officers must get computer literacy – Trust officer new role as relations manager only– Access Plus a precondition of process change– Mass elimination of workforce (180 FTE)– Training centers cause self-learning of new skills– High morale and stress problems– Overall lack of business process change analysis

• Client Relations Impacts– Loss of client management from trust officer– Loss of customization/personalization of information– Retrain to new statements and administration procedures

Tactics for Dealing with Tactics for Dealing with Resistance to ChangeResistance to Change

• Education and Communication

• Participation

• Facilitation and Support

• Negotiation

• Manipulation and Cooptation

• Coercion

Source: Robbins, Organization Theory

Elements Most EffectedElements Most Effected

People, Informati

on& Technolo

gy

Pro-cesse

s

Formal

struc-ture

Infor. Net-work

s

Values

Incen-tives

& Rew.

Deci-sion Right

sData

Planning

Perf. Meas/ Evalu-ation

Control

Culture

Organization

StrategyOrganizationalEffectiveness

Change

ChangeChange

Change Change

Change

Change

Characteristics of Characteristics of Successful ChangesSuccessful Changes

• Relative advantage– Is the change perceived as better than the old

way or state of being?

• Compatibility– Is the change consistent with the existing

values and needs of the organization and the clients?

Characteristics of Characteristics of Successful Changes IISuccessful Changes II

• Complexity– Is the change considered convenient, easy to

use, and easy to understand?

• Trialability– Can the change be experimented with on a

limited basis (such as a demonstration project or limited roll-out)?

Characteristics of Characteristics of Successful Changes IIISuccessful Changes III

• Observability– Are the benefits of the change clearly visible

to organization members and clients?

• Reasonable risk– Are changes perceived as too risky in any

dimension?

Characteristics ofCharacteristics ofSuccessful Changes IVSuccessful Changes IV

• Perceived risk dimensions– Functional – May not perform– Financial – May cost too much– Physical – May be harmful– Psychological – May not meet “self – concept

needs”– Social – May cause social problems

Next TimeNext Time• Readings

– Pearlson and Saunders, Chapter 5– Vandalay Case

• Assignment– Group Assignment:  Prepare an A3 report and

a set of power point slides that identifies the key issue that must be addressed to make the ERP implementation successful and lays out a plan for the remainder of the implementation process.