How do I manage change for organisational renewal?

CIOs and business change leaders will face many challenges when moving to ICT (Information and Communications Technologies) as a Service. The momentum for change in public sector organisations and the pressure generated by expectations for action and results have been accelerated by recent government decisions and a growing sense of urgency that we need to get on with this.ICT as a service is commonly referred to as cloud hosting, cloud solutions or cloud outsourcing Put simply, it means that your organisation has decided to meet all or some of its ICT needs by purchasing services and/or renting assets, applications and storage space from suppliers rather than by owning and managing them. Transitions from one business model to another are commonly referred to as cloud deployments. Such transitions require a fundamental shift in your ICT and IM (Information Management) strategies and the business processes, stakeholder relationships and resources that support them.

Future directions set by state and federal governments are the main drivers for change. The Queensland Government for example, has adopted a cloud first policy to enable it to transition to lower cost, standard and interchangeable services, where quality improvement and cost reductions are driven by competitive market forces. Market forces, increased market share, profitability and growth remain the main drivers for private sector organisations to adopt cloud solutions. Other drivers may be known or will emerge as business leaders make decisions that will guide their ICT as a Service strategy and set the scene for renewal of organisational mission and purpose. Together they create a compelling case for re-thinking your information management (IM) strategies and the capabilities you will require to deliver them.

Transformational versus incremental change

The approach to change that will best support a successful transition to a new business model is transformational rather than incremental although transformational change is usually implemented in manageable stages. Transformational change disrupts the current state and the roles, working relationships, business processes and behaviours that are embedded there and where the capabilities developed from your business technologies have become self-sustaining. The focus is on wholesale business changes that will be required to ‘unfreeze’ the current state and transition to a future state, while ensuring that your people will be ready to embrace a new business model and new ways of working with stakeholders and suppliers.

Transformational Change

What transformational change means will be understood differently from department to department and program to program. There is no one-size-fits-all template. The dynamics of transformational change may also be different from your previous experience with change management. Your business drivers, the type of cloud/s you decide on, the services you will purchase, deployment and migration complexity, unique workforce impacts and contractual relationships with your suppliers will guide your decision making and signal what your transition planning will need to cover.

Transition planning

Moving to ICT as a service is a transition that takes your organisation to a desired future state. One of the main transition activities will be to build strong and lasting relationships with those suppliers or cloud hosting organisations who will become your service delivery and information partners. Another is the alignment of your people, processes and systems with your new cloud architecture and your new business or service delivery model. These alignments are important because of the role they play in stabilizing the business environment as the transition occurs. They may take more than one developmental step, depending on how embedded the current state is, the complexity of the transition and how ready and motivated your people are.

Building new capabilities

We are working more and more with clients to help them get their people from where they are to where you need them to be as ICT as a Service transitions occur. We recognise that each business environment is different and that the pathway for a successful transition will vary. Above all, it requires business leaders and sponsors who can articulate a clear vision of their future state, the rationale for change and the plan to get there.

The capabilities required for ICT as Service environments are likely to be different from those that have served your organisation well in the past. The pathway for building or acquiring new capabilities will be an important part of your workforce transition. Common practice nowadays is to use a methodology or framework that leads to soundly based decisions. Gartner’s IS Lite approach for example, enables business leaders to formulate their vision for optimal information systems (IS) performance and decide which services can be exited and which capabilities should be retained and attained internally. This vision can then guide workforce transition strategies and plans to define and build new capabilities from old.

Building new capabilities also requires a depth of understanding about what new skills will be needed and whether these can be developed internally and/or acquired. A good starting point is to understand and respect the capabilities that are embedded in your current state plan for the retention of critical skills and knowledge.

Lessons learned

Case studies in Australia and elsewhere have already revealed some of the challenges for cloud deployments. Not surprisingly, a common feature is the imperative to get the deployment done quickly and successfully while also containing costs. Change management, infrastructure, migration complexity, vendor and supplier relationship building, time taken to build or acquire new capabilities and what to do with owned ICT assets, all feature in the literature that is available. Enabling changes required for procurement policy, capital versus expense cost structures and understanding current and benchmark costs for new business models have also arisen.

Case study 1

For a state government department, cloud hosting services provided an opportunity to integrate a myriad of different systems, each with their own administrative processes, into one. The current state was characterised by cumbersome and manual processes, difficulty in getting accurate information and embarrassing delays when responding to routine requests for information. The preferred option was software as a service hybrid solution which comprised of a private and a public cloud for different user audiences and information security standards.

Implementation of the solution took place within an aggressive timeframe and was widely regarded as a successful example of how to do large-scale software as a service (SaaS) deployment. It was not however without its challenges. Lessons learned revealed that change management was the biggest challenge and that implementing cloud best practice required a major and continuous effort to ensure that new practices were adopted.

Next Steps

Your organisation may already have a change management methodology that has served you well in the past or a preferred approach to managing either incremental or transformational change. Information Professionals recommends that you familiarise yourself with our other publications and consider your approach against the following business change principles. They will serve as a reality check and guide you on the right path:

• Know your business risks, drivers for change and your cost structures and choose the pathway to ICT as a service that provides the best fit solution. What has worked well in one organisation may not necessarily work in another.

• Plan your transition around the program and project management life-cycle. Project management, business change, infrastructure optimisation, supplier engagement and workforce change products will overlap. They should be integrated for best effect.

• Treat your cloud deployment and transition planning as a business transformation project rather than an ICT project

• Be ready to communicate concepts that may be unfamiliar or not understood by your staff, stakeholders and suppliers, clearly explaining what they mean and who and what will be impacted. Focus on communicating the vision and rationale for change, what will happen and why. Be honest and keep expectations realistic about what is to come.

• Define the capabilities required for your future state and plan to build new capabilities from old. Keep in mind that these types of transitions are new and that it will take time to build or acquire new capabilities as your new business model takes shape.

• Know the value and cost structures of your ICT and IM assets and show that you understand and respect what is embedded in the current state. Aim to preserve the ‘know how’ that is there for continuing internal use or knowledge transfer to vendors and suppliers.

• Help your stakeholders – including future suppliers (where this is in your interest) to get ready for ICT as a service. Use these interactions as opportunities to build and strengthen the working relationship.

Success criteria

Increasingly being successful at transformational change relies on speed of adaptation and the avoidance of lengthy and de-motivating implementation cycles that can undermine your transition planning and stakeholder engagement efforts. There is a constant need to balance immediate and longer-term interests. Successful transitions to new business models also require thought, care and attentiveness to planning and sequencing of business, deployment and workforce change initiatives. Most importantly, the people impacted need assurances from change leaders and business sponsors that their work efforts are valued, that no-one will be left behind and that there is a clear rationale for the changes they are being asked to embrace.