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BUSINESS ADMINISTRATION
ANALYSISANDDEVELOPMENTOFCHANGEMANAGEMENTFRAMEWORKIN
JATISSOLUTIONS
DwinaFebriaEffendy,JannHidayatTjakraatmajaandJohnWelly
SchoolofBusinessandManagement
InstitutTeknologiBandung,Indonesia
dwina@sbmitb.ac.id
AbstractThe study aims to analyze change management implementation in Jatis Solutions and develop
solutionstothefindingissuestomitigateobstaclesandacceleratethechangestick.Thecompanywantedto
renew its business strategy and has announced it to the employees in Q4 2010. The organization was
restructured, the business process also changedaccording to the new strategy. Turnover ratio was increased
from17%to58%in2011.Astudyconductedin2012,analyzingthechangeimplementationbycomparingwith
Kotters8stepsChangeManagementmodel.Realizingthechangeisstuckinremovingobstaclesandcreating
short term wins steps, the interconnection business elements of the current change was measured using 7S
McKinsey to see the probable imbalance of elements which might be the core obstacles to the change. The
initiativesexecutionthenmeasuredusingDICEmethodologytounderstandtheobstaclesonwinningtheshort
terms. Improvements to change programs are proposed by preparing readiness for change to managers and
employeesmotivationprograms.
Keywords: Change Management, IT Delivery Service, Kotters 8 Leading Step of Change, 7S McKinsey, DICE
methodology
1. Introduction
Jatis Solutions is local IT Company that provides Enterprise Application Integration and Professional
Services,establishedin1997.ThecompanyoffersERP,CRM,WealthManagement,DataWarehouse,
Mobile Application, and Custom Application to Enterprise in various industries such as retail,
manufacturing,andfinancial.In1999,thecompanyexpandsitsbusinessbyopeningbranchofficesin
Singapore, and later in Malaysia and Philippines. Then to take advantage of Indonesias burgeoning
cellulartechnologyindustry,in2002thecompanydecidedtospinoffitsmobilecontentproviderand
mobile marketing divisions into a separate business entity, Jatis Mobile. Keeping with its principle
constant innovation, thecompany decided to become ApplicationInfrastructure Provider, to help
multiindustry firms get connected and collaborate with low investment cost. The idea is by
connectingallproductsintoacompletesolutionandintroducingarecurringbusinessscheme,where
enterprises can use the companys solutions through subscription arrangement instead of software
licensepurchasing.
ThetransformationbeganbyreplacingitsdirectorinAugust2010andcontinueswithannouncement
ofthechangeinSeptember2010togetherwithrestructuringtheorganization.Theoriginalstructure
wasdividedbyproduct,suchasOracleDivision,MicrosoftDivision,DataWarehouseDivision,etc(see
Figure1).Eachdivisionhassalesteamanddeliveryteam.Inthenewstructure,thesalesanddelivery
team are divided in separate divisions. Sales divided by industries (vertical) and delivery divided by
productgroup(horizontal)asseeninFigure2.
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Figure1.JatisSolutions2009OrganizationStructure
Figure2.JatisSolutions2012OrganizationStructure
director intro
oduced a neew vision w
we connect businesses
b
and
a new mission simplle (product),,
The d
open(systems),p
proven(business).Hem
maderegulattiontoforbid
dalldivisionstousethe oldpracticee
henewbusin
nessschemee.Thechallengeofchangeinthemo
ostfrequentt
andimmediately adjusttoth
prominentistheresistancetochangeefromalllevvels:frontlineandmanaggers.
andp
Tab
ble1.TurnoverRatio2010201
11
Date
Level
Available
Resiign
TurnoveerRatio
2010
MiddleM
Manager
74
13
17.57%
%
FrontLine
156
27
17.31%
%
2011
MiddleM
Manager
70
41
58.57%
%
FrontLine
229
124
54.14%
%
Dr Jo
ohn Kotter, with
w his thirty years research have proven that 70% of all major changge efforts in
n
organ
nization fail, because orrganizations often do no
ot take a co
omprehensivve approach required to
o
manaage the chaange (Kotteer, 1996). This
T
study will
w evaluatte the impllementation of changee
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management in Jatis Solutions and provide recommendations to make the change successful and
stick. This study is limited within the core divisions of Jatis Solutions which consists of Sales &
Marketing,Presales&BusinessDevelopment,andProfessionalServicesDivisions(seeFigure2).
2. BusinessIssueExploration
Change is something that must be done by every company in order to maintain its competitive
advantage. Pressures to change can come from environment or internal organization. Changes that
occur in Jatis is affected by the environment (market and technology), and internal (growth and
collaboration).ITindustry,especiallyforsoftwareproviders,isgreatlyinfluencedbytheadvancement
of technology. Back in 1960s, software is stored in a powerful computer named mainframe.
MainframeusedprimarilybybankandgovernmentalorganizationforcriticalapplicationssuchasERP,
financialtransactionprocessing,andcustomerstatistics.
In the 1990s, mainframe industries was dying due to the low cost of new Personal Computer
(PC)/serverbasedhardware.Inadditiontoitssmallersizethanmainframe,PCismoreattractivewith
graphical user interface. In early 2000s Salesforce.com introduced software as a service (SaaS), a
softwaredeliverymodelinwhichsoftwareanditsassociateddataarehostedcentrally,andaccessible
byusersusingathinclient,normallyawebbrowserovertheInternet.WithSaaS,vendorcanreduce
the substantial cost of code delivery to customer, help to gain sustainable revenue with recurring
revenuemodels,potentiallyincreasemarketsharetotheentireInternetbusinessmarketwithweb
based service models. In customer focus, SaaS can reduce internal staff efforts for software
programmingandmaintenance,fasterimplementation,andreduceTotalCostofOwnership(TCO)for
applicationservices.
RealizingtheadvantagesofSaaS,thecompanydecidedtotransformitsbusinessfromtraditionalIT
delivery model to IT service model, inside the business strategy collaborative commerce, an
applicationplatformproviderthatcanhelpbusinesspartnerstocollaborategainingmutualbusiness
benefits, with recurring business scheme. However changes cant be done by only changing the
businessprocess,butcompanyalsoneedtothinkabouttheeffectontheorganizationmodelincludes
interconnection between organization variables so that stakeholders, especially managers, can
understand how things work, what causes what and so forth within the organization. Not less
importantisthesoftfactorssuchasculture,leadership,andmotivation,alsoaffectthesuccessofthe
change.Itneedsguidancestepsfromplanning,implementation,tomakingthechangestick.Skipping
steps only creates illusion of speed and never produces a satisfying result (Kotter, 2007). After the
change was announced and implemented in 2 years, comparing with change management best
practices will be a best way to identify the unforeseen obstacles to change, and gain solutions to
acceleratethesuccessfulofchange.
A. ConceptualFramework
Kotter introduced 8steps to lead change that help companies to understand and manage change
whereeachstepsacknowledgeprinciplerelatingtopeoplesresponseandapproachtochange,which
canbegroupedinto5phases.Phase1Planning:(1)IncreasingUrgency;(2)BuildtheGuidingTeam;
Phase 2 Enabling: (3) Get the Vision Right; Phase 3 Launching: (4) Communicate for BuyIn; (5)
EmpowerAction;Phase4Catalyzing:(6)CreateShortTermWins;Phase5Maintaining:(7)DontLet
UpConsolidatingImprovement;(8)MakeChangeStick.
Change implementation cannot only rely on soft factors such as leadership and culture, the hard
factors also requires for change which affecting the successful of achieving steps in Kotter.
Measurement, communication, and interconnection of business elements will help directing the
stakeholderstomeetthechangegoals.Thisstudywillanalyzethechangeimplementationfromthe
stageachievement,interconnectionofthebusinesselements,andprogramexecution.
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Figure3.ConceptualFramework
B. MethodofDataCollectionandAnalysis
Since no specific change management programs, data collection where conducted three times to
analyze the change management implementation in the company. The first data collection is by
interviewingwiththeCEOinordertounderstandhowthemanagementplanandenablethechange
for the company. The second data is collected by spreading a survey from current employees and
resigned middle managers that leave after the change announced to know how the company
communicateandempowerthechangetoemployeestobuyin.Forthelastdatacollection,interview
to General Managers and selected employees are conducted to understand how the company
implement the change initiatives in order to win the change, as it requires in catalyzing and
maintainingphase.
C. AnalysisofBusinessSituation
TherearesomegapsbetweentheactualimplementationandKotters8stepsbestpractice(seeTable
2).Noformalguidingteamiscreated,thusnoonefeelresponsibletocommunicatethechangeand
empower the employees to make action to the change. However it turns out 90% of the current
employeerespondentshaveawilltosupportthechange,althoughonly55%feelthechangemessage
isclear.Itmeansthattheemployeesbelieveinthecompanyvision.
Table2.Kotters8StepofChangePracticeMapping
StepTitle
Theory
Implementation at Jatis
Solutions
Create
Needs
InAugust2010,allmanagers
Urgency
75%
were gathered to gain
(Planning) company support
from
middle
s
managersbycommunicating
managem the
new
strategy,
entto
organizationrestructure,and
support
the new director that will
change
leadthechange.
Create
Buildthe No formal guiding team
Guiding
guiding
created, management was
Coalition
team
expecting General Managers
(Enabling)
to lead the change for each
divisions.
The
change
implementation was lead by
thenewdirector.
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Createa
Vision
(Enabling)
Communic
atetobuy
in
(Launching
)
Remove
Obstacle
(Launching
)
Guiding
Teamto
createa
clear
visionand
strategies
for
employee
to
understan
dthe
maingoal
ofthe
change
Employee
tobelief
that
useful
changeis
mandator
yand
sacrifices
is
required
Managementhasprepareda
change vision, but no
strategic initiatives made.
The company immediately
announced
the
transformation (skip to step
4) and expecting GMs made
adjustment to the impact
that happened on the
divisions,
and
remain
achieving the targeted
revenue.
Thecompanyannouncedthe
change to all employees in
September
2010,
by
communicating the new
vision,
mission,
and
organizationrestructure.
Effendy,TjakraatmadjaandWelly/TheIndonesianJournalofBusinessAdministration,Vol.2,No.7,2013:758772
to
response,
and
discourag
eaction
from
leadersat
implemen
ting
change
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Makethe
change
e
stick
(Mainttaini
ng)
Toanchor
the
chan
nge
into
cultu
ure
withnew
behaaviors
rootedin
sociaal
norm
ms
and
share
ed
valuees
Figure4.Leveelofloseselfbe
elongingtocompanyfactorsfro
omresignedmaanagers
ngewasnot communicatedandconttrolledwell,theCEOcom
metoleadth
hechangein
n
Realizzingthechan
theeendof2011. Herealignsthevisionb
bycommuniccatingthechangemoreffrequentand
daskGMsto
o
create strategic initiatives that supporrt the chan
nge. 20 strategic initiaatives are collected
c
byy
h GM becau
use the proggrams often not documeented nor announced fo
ormally (seee
intervviewing each
Tablee3).RobertW
WatermanJrr,TomPeterrs,andJulien
nPhilipsfrom
mMcKinsey &Company believethatt
organ
nizational efffectiveness comes from
m the interaaction of se
even factors and successsful changee
requiiresattention
ntotheinteerconnectedn
nessofthevvariables[Palmer,2008:1
124].Foran organization
n
to op
perate effecctively, each
h of the seven factors within thiss frameworkk must be aligned and
d
conneected.Figure
e5illustratessthealignmeentoftheco
ompanysstraategicinitiativestogetherwithissuess
found
donseveralfactors.
Taable3.20StrategicInitiatives
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N Div. StrategicInitiatives
o
1 PI
IndustriesFocus
MS
2 PI
Enhancement Product
MS Connector
3 PI
NewServiceServiceAfor
MS newtargetmarket
4 PI
NewServiceServiceBfor
MS newbusiness
5 PI
Enhancement Product
MS Component
6 PI
Maintenance
MS Standardization
7 TAF FrameworkStandardization
8 EPP Partnering with 3rd party
for
reseller
and
implementer
9 EPP DocumentStandardization
1 EPP ProductEnhancements
0
1 BIZ SalesMentoring
1
1 BIZ New Product Product A
2
forMicro
1 DN Encourage
knowledge
3 D
sharing
1 MS Improve
administration
4 U disciplineformaintenance
1 W
ProductEnhancements
5 MI
1 W
Hiring Subject Matter
6 MI Experts
1 W
Partnering with 3rd party
7 MI for
reseller
and
implementer
1 PM PMMentoring
8 O
1 PM PMToolEnhancement
9 O
2 PM PM Policy and Template
0 O Standardization
765
7SElements
Strategy
productivity
Strategy
growth
Strategy
growth
Strategy
growth
Strategy
productivity
System
System
Strategy
productivity
System
Strategy
growth
Skill
Strategy
growth
Skill
System
Strategy
productivity
Staff
Strategy
growth
Skill
System
System
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Strateegy
System
1. Enhance prooject management tool and
methodology
2. Improve stanndardization and administraative for :
a. customer acquiring
b. project implementation
c. support/maintenance
d. Product
Need to strenggthen employee engagemennt and
retention progrrams
Structure
1. Restructuure organization, focus on industry
(sales) andd product (delivery)
2. Aligning business units structure
Shared Values
V
Staff
Hire 3 Subject Matter Experts to fill the skilll gap
Skill
1. Empoweer knowledge sharing and trraining
2. Sales Meentoring
3. PM Menttoring
Styyle
Managements leadershipp style is inspirational and
commanding. The companny needs logical and
supportive leaders to leadd the change .
Figure5.StrategicInitiativeA
Alignmentto7SSMcKinsey
Figu
ure6.DICEScorreDiagramofSttrategicInitiativvesPrograms
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Table4.DICEMeasurementResultofStrategicInitiativesProgram2012
Program
Number
DICEScores
Tot
al
DIC
E
Actual
Outcom
es
20%
Postpon
ed
0%
Postpon
ed
20%
Postpon
ed
20%
40%
20%
Postpon
ed
100%
0%
Postpon
ed
70%
60%
70%
20%
Postpon
ed
60%
100%
70%
20%
20%
0%
Postpon
ed
100%
100%
C
1
3
C
2
2
E
1
17
26
18
4
5
6
4
2
2
3
3
3
3
3
3
2
2
2
2
1
1
20
17
17
7
8
2
3
3
3
3
3
2
2
2
1
18
18
9
10
11
12
3
1
1
1
2
3
1
3
3
3
1
3
2
2
2
2
3
4
2
1
18
17
9
17
13
14
15
16
17
18
2
1
2
4
4
4
3
2
1
3
3
3
3
2
2
3
3
4
2
1
3
2
2
2
1
1
3
1
1
2
17
11
14
19
19
22
19
1 1 1 2 1 8
20
1 1 1 2 3 10
TotalEach
4 5 5 4 3
Elements
6 1 4 1 6
TotalActualOutcomePercentageforQ1 45.5%
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3. Bu
usinessSolu
ution
Figure7.ChangeManaggementProblem
mMap
Table5.PropossedSolutions
No Sollution
Proposed Activities
Outcome
Leaadership
and
d
readiness
forchange
Deffining
orgganization
ProposedActivities
CEOto
oassignform
mallymanageers
whow
willbethegu
uidingteamaand
responsibleforen
nsuringthat
changgesaresustained
CEOto
opersistentlyguidingthee
managgerstobeaggentofchangge
capab
bleofleadinggand
facilitaatingthetransformation
n
Contin
nuousleaderrshipand
regenerationproggramfor
managgersandemployees
Managerstobuild
dacultureoff
coopeeration/collegiality
o Teamwork
T
o Reflectivepra
R
actice
o Continualimp
C
provementaand
leearning
o Responsivene
R
esstochangee
ExpectedOutcome
Sameurgencyleve
elamongsth
he
managgementandmanagers
Formeedastrongin
ntegrityand
comm
mitmentguidiingteam
Formeedaleadersh
hipand
regeneerationcultu
ure
ProposedActivities
Managerstodevvelopclear
768
& Expeccted
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interventions
Clarityof
purpose
Strategic
initiative
alignment
strategicinitiativesanddefine
detailactivities/proceduresto
bedonebythestaff
Managerstoacquireandmake
itavailabletherequired
resourcesandinfrastructureto
supportthechange
Managerstoreviewand/or
revisepoliciesandprocedures
asrequiredforworkactivities
thatneedspecificaction
requirementsduetothis
organizationalchange
Managerstodoregularreview
ofthestrategicinitiativesby
usingDICEtoolstopreventand
overcomeanyobstaclethat
mayinterferethe
implementation
ExpectedOutcome
Obstaclestowardsthechange
arereviewedandprevented
Formulatewellplannedstrategic
initiatives.
Strategicinitiativesaretreatedas
projects,withcleartarget
outcome,documentation,and
procedures/activities.
ProposedActivities
Managertoconductintense
periodsofstaffconsultationto
establishthesenseofpurpose
andurgencyestablishedand
recognizedthestagesofchange
CEOtoinspireManagersand
stafftomove,maketheneeds
forrealchange
ExpectedOutcome
Sameurgencylevelamongthe
employees
ProposedActivities
Managerstoconductregular
alignmentwithbothCEOand
staff.Developacommunication
planandregularmeetingwith
thestaff.Exchangeregularand
uptodateinformationaboutthe
transformationinaproactive
andopenmanner
Managerstoconduct
comprehensiveassessmenton
anyresistanceandobstaclefor
thechange
HRtosynergizestrategic
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initiativestomanagersKPI
ExpectedOutcome
Sameunderstandingofthe
changemessageamongthe
management,managers,and
employees
Formallyreviewingtheinitiatives
tosenseanyresistanceand
obstacle.
Connectedness ProposedActivities
Overcomeresistancetochange,
identifyandpromote
relationshipamongdivision,
encouragesmatchingof
individuals
Connectpeopletoeachother
throughsharedexperience,
strengthenedrelationships,
sharedacommonpurpose,and
storytellinginaninformalwayof
conversations.
ExpectedOutcome
Continuousremovingobstacles
Reduceemployeeresistanceto
thetransformation
Quickwins
ProposedActivities
Prioritizeinitiatives;develop
shorttermrealisticmilestoneor
interimgoals
Makeappropriatecelebrationon
anymilestoneachievement
ExpectedOutcome
Encouragequickwinsactionand
implementation
Encourageemployeemotivation
towardsthesuccessofthe
transformation
Consolidating ProposedActivities
performance Continuallymonitoringplan,
improvement
implement,review,andimprove
cycle
o Workprocessimprovement
o Staffdevelopmenttocreate
aculturalresponsiveness
o Reviewachievement
regularly
o Mitigationresistancefactor
Considerthedevelopmentofa
retentionstrategyforkey
personnelifriskoflosingthemis
high
Considerimplementationof
appropriaterewardsand
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recognitionforkeycontributors
ExpectedOutcome
Employeeengagementand
retentionprogramisbuilt.
Higheremployeemorale
Stengthen the ProposedActivities
companys
HRtorepromotecorporate
culture
culture(SPORTIF)toall
employeesandmanagers
HRtocreatecontinuousbuilding
cultureprogramswithinteresting
rewardsandrecognition.
HRtoaligncorporateculture
withmanagementpracticesand
KPI
ExpectedOutcome
Companysculturevaluebecome
sharedvalue
Higheremployeemorale
4. ConclusionandImplementationPlan
Basedontheanalysis,themostcrucialissuesofchangemanagementinJatisSolutionsthatmakethe
implementationunalignedwerethedifferentlevelofurgencywithintheorganization,lackofchange
agentskills,andweaksupportfromHRinbuildingtheformalchangemanagementprogram.Therefore
changeimplementationmustbedevelopedbystrengtheningthereadinesstochangeisstrongintop
levelsuchasrealignmentoftheurgencyinmanageriallevel,preparechangeagentskillsandbuilda
formalchangemanagementprogramtogetherwithHR.Thenthecompanyshouldworkthechange
together with front line employees, increase the employees motivation, and synergize the new
cultureandchangemanagementprogramstoperformanceindicatortomakethechangestick.Table
6illustratestheproposedimplementationplanstartfromQ22013.
Table6.ProposedImplementationPlan2013
Mon
th
Apr
Program
Leadershipand
readinessfor
change
Clarityof
purpose
Defining
organization
interventions
Strategic
initiative
alignment
Quickwins
Connectedness
May
Jun
Involved
Person/Unit
BoD,GMsand
HR
PIC
CEO
Managersand
changeagents
Managersand
Staff
Change
agents
Managers
CEO,
Managers,
Staff,andHR
Managers,
changeagents
andstaff
Managers
Managers
and
change
agents
Managers,
Change
changeagents, agents
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Oct
Consolidating
performance
improvement
Strengthenthe
companys
culture
andstaff
Managersand
HR
HR
HR
HR
References