Organization Change Management – the “Soft Stuff is the “Hard Stuff”

1. Organization Change Management – the “Soft Stuff is the “Hard Stuff” Chris Keller Welch Allyn Inc

2. Learning Points • Why is Organization Change Management (OCM) first perceived as the “Soft Stuff” and why does it always end up as the “Hard Stuff?” • How an OCM initiative can improve your company’s success levels with your implementation or upgrade • What are common organization attitudes at the start of your project and how you help change them before and after Go Live

3. What is Organization Change Management? • “OCM” - A series of initiatives to prepare your organization and the individuals in it for changes • The “What, Why, How, Who, When, Where” – for your organization’s implementation or upgrade • If you are focused on these questions for your implementation or upgrade for your organization – you are involved in Organization Change

4. What Does This Mean to You?(We will come back to these questions) • Why are you here and why are you interested in ERP? • Is your organization preparing for, or currently implementing or upgrading ERP? • If yes – then what is your role/ involvement? • Has your ERP project team included any resources dedicated to Organization Change? • What do you need to do with Organization Change in your project?

5. Company Overview • A family business founded in 1915 • Diagnostic medical instruments • Patient monitoring systems Advancing frontline care TM • 2300 employees world wide, seven manufacturing facilities in US and Europe • Implemented SAP February 2004 in two plants • Trained 600 employees for first Go Live

6. Vision – Medical Products Caregivers in frontline settings worldwide will look to the people of Welch Allyn first for solutions to their patient care challenges

7. Global Reach Acrobat Document

8. The Integrated Diagnostic System Virtually • every hospital, • every department, • every office, • every clinic • is standardized on Welch Allyn diagnostics Advancing Frontline Care TM

9. Overview of Our SAP Project • Company Goal – Increase Sales Revenue Through New Product Development and New Company Acquisitions • Old IT Platforms Would Not Support This Growth • Users Became United on SAP During Selection Process • Welch Allyn – 23 Full Time Project Members • Systems Integrators – Capgemini – 17 Full Time Equivalent Consultants • Forty Persons in a Large Team Room for Nearly Two Years

10. FI Financial Accounting CO Controlling AM Fixed Assets Mgmt. PLM Product Life Cycle Mgmt IM Investment Management PS Project System HR Human Resources HR Module Overview - SAP Modules at Welch Allyn Logistics Modules Financial Modules SD Sales & Distribution Customer/ Sales Module MM Materials Mgmt. PP Production Planning SAP R/3 CRM Customer Relationship Mgmt QM Quality Manage-ment R&D Module PM Plant Main-tenance CS Customer Service Financial Modules Logistics Modules BusinessWarehouse

11. Core Team

12. OCM – What is the Soft Stuff vs. the Hard Stuff? • We all know implementing or upgrading SAP is challenging • The technical stuff; Blueprinting, configuring, client strategy, transports, testing, code changes, more transports, more testing, etc. All initiatives that involve changing technical elements. • The people stuff; Training, communications, security authorization, super user organization, business process procedures. These are all initiatives that involve changing people behaviors. • It’s harder to manage technical change, than to manage people change, right? • Then again… maybe not..

13. OCM – How Did We Get Started • Before the SAP project start, Welch Allyn chose Cap-gemini as our systems integrator • Capgemini brought in consultants to partner with each of the functional team leads – including OCM • The Cap OCM consultant was an organizational change expert, who’s mission was knowledge transfer to Welch Allyn OCM team

14. ASAP Project Methodologyand Organization Change Strategy • 1. Project Prep • Core Team Training Schedule and Budget Estimate • Change Mgmt & Comm Strategies • Project Measurement Scorecard • Project Branding • Project Initiation (Kickoff) • 5. Go Live & Support • Conduct Implementation OCM Activities • Design Post Implementation Support Strategic & Tactical Organization Design • 2. Biz Blueprint • Communication Deliverables • Roles Strategy • Training Needs Analysis & End User Training Strategy • Super User Strategy • 4. Final Prep • Communication Deliverables • End User Training • 3. Realization • Communication Deliverables • Develop Change Management Deliverables • Super User Training • Job Role Profiles • Assess Skills & Job Match

15. Organization Change Management - Five Initiatives Security/ Role Development Training Organization Change Management Business Process Procedures Super User Development Communications • The intention is to empower organizations and individuals [to take] responsibility for their own future.(Hemamalini Suresh, Ittoolbox)

16. Organization Change Management - Five Initiatives Company Culture Security/ Role Development Training Organization Change Management Business Process Procedures Super User Development Communications • The intention is to empower organizations and individuals [to take] responsibility for their own future.(Hemamalini Suresh, Ittoolbox)

17. What is Company Culture? 1values, behaviors, beliefs and norms that permeate the group Expressed through the words and behaviors of each employee Company or department leadership sets the overall tone Often influenced by the customers you serve Most often revealed in the way companies approach and solve their problems Examples: Entrepreneurial vs. bureaucratic Team focused vs. independent initiatives Risk taking vs. conservative Structured vs. highly variable Plan, plan, plan vs. “ready, fire, aim” Trust vs. fear in the workplace Loyalty vs. “what have you done here lately” Accountability vs. “it’s WHO you know” Elegant vs. Spartan offices Culture Eats Strategy for Breakfast Every Day 1 Assess Company Culture to Find the Best Fit by Michael Neece

18. VIEWPOINTS I’ve learned other systems before, I’ll figure this out I’ve received training, no need for me to practice, I should be all set Just train me to perform the transactions I need to perform - that's all I want/ need. Just tell me what data to enter into each field; I don't care about the purpose Give me the concepts so I can see the big picture What’s the purpose of this data field? CULTURE Management under-estimates complexity before Go Live – “ready-fire-aim” Many competing priorities, or under-resourced project; users are too busy; NO free time Management has resourced the project, and fostered inquisitive culture Culture Eats Strategy for Breakfast Every Day

19. Organization Change Management - Training Training Organization Change Management • Training Has Several Elements • Core team training • Management “seminar” • End user training: • Training needs analysis • Develop course contents • Deliver training courses • After training - practice before go live

20. Organization Change Management - Training Core Team Training Management Seminar Train Project Team Members (off site or on site) where course is delivered by SAP Do whatever it takes to help ensure management understands what is really going on

21. OCM – End User Training • Training Needs Assessment • Survey end users; ask them questions • What do they know now and what do they need to know? • What are the ways they learn best? • Determine courses, cost estimates • Develop training contents • What must be included in course materials? • Who will write the training courses? • How will this be accomplished? • What will be the content? • Identify resources, funding, set time schedules, review tests, etc. • 30 courses; concept slides, demos, hands on exercises, etc etc.

22. OCM – End User Training • Deliver training to end users; • Identify and train instructors • Locate training rooms • Set schedule, manage invitations and attendance processes • At Welch Allyn; 30 different courses, 225 classes, 10 training rooms in four US locations • After training – practice before Go Live • Adhoc organized practice sessions, prepare for proficiency tests • Administer tests; score them, offer retest opportunities, postpone security access as required

23. Practice sessions before Go-Live Classroom Hands-On Training – Instructor Led Proficiency Tests Required Self-Paced Independent Basic Navigation Training End User Training Strategy It Doesn’t All Happen in the Classroom OJT accounts for approx 40% of all SAP learning On-the-job-training After Go Live SAP On-Line Help or help from Super Users OJT Practice sessions account for approx 30% of all SAP learning Practice end-to-end business scenarios! Classes held not more than 4 weeks before Go Live Class room accounts for 30% of all SAP learning Introductory only

24. OCM – End User Training I have learned all my transactions – I can step through the exercises and I know what to do. I’m ready! We are going live in two weeks. Are you all set with your training? What can we do to help you get your job done using SAP?

25. OCM – End User Training I can’t believe how long this process takes! I didn’t consider all the real life events that happen and how they make this so complex! We have been live for 2 weeks now. How’s it going? It’s easy to train end users, but it’s hard to get them to really learn before Go Live

26. OCM – Training Hard Stuff • Getting employees to see SAP as a organization and business process change; (it’s easier for participants to see this as a software project.) • When training is approached as a software project, participants focus only on “how to perform their own transactions” • When training is approached as a business process change, the focus is on “which organizations will perform which tasks, and where are the handoffs?”

27. OCM – Communications • Elements of Communications Plan • What is the content/ message • Who is the audience • How do we tell them • What is frequency • Who will deliver • Where will it come from • When are delivery dates Communications Organization Change Management

28. OCM – Communications Plan

29. OCM – Communications The SAP Go Live is coming. Do you know how this new system will impact your job? Will you have the skills need to be successful? I have other priorities this week. I’ll talk with my manager later when I have time.

30. OCM – Communications We have been live for 2 weeks now. Have you been able to sustain your work commitments? I don’t know why we have this new system? Everything is different and I can’t get the critical information that I need. It’s hard for users to understand and embrace system changes before Go Live

31. OCM - Security/ Role Development Security/ Role Development Organization Change Management • Groups of users in each functional area • New responsibilities after SAP? • New jobs evolve? • New SAP transactions to do their jobs?

32. OCM - Security/ Role Development Before Go Live Have you checked your security access to the T codes you will need when we Go Live? I have been practicing my transactions since my training class. I am able to perform all of them so far. My security looks OK.

33. OCM - Security/ Role Development After Go Live Help! I need access to this transaction code immediately! I can’t do my job without this. I understand you don’t have this security access, but your job position didn’t include access to this transaction. What’s changed? It’s a challenge for end users to define their job needs and test their security access before Go Live

34. OCM - Security/ Role Development • Determine what transactions an end user is authorized to complete • Determine what training courses an end user must complete to be proficient in the user role they are assigned • Construct security authorization levels for each user role • Match end users to new security roles

35. OCM – Super User Development • Develop the Super User Organization • Determine objectives • Identify criteria • Identify approx 10% of end users as candidates • Confirm, then train as Super Users • How and where to get help – help desk communications Organization Change Management Super User Development

36. OCM – Super User Development • Develop the Super User organization • Key participants in knowledge transfer • Look for people who are natural leaders or change agents – target for 10% of end users • Ensure S/Us know where to get help • S/Us learn over time, fewer calls to Helpdesk • Organize Super User workshops – seek their help to improve SAP • Seek their help with benefits realization

37. Super Users • What about Super Users (see handout) • What do they do? • How can they help? • Why did we need them?

38. Project Team & Super Users – by Function & Location

39. OCM – Super User Development We have requested you to become a Super User. Thanks for saying “yes!” Your job will be to help other users when they have questions or problems. Sure. I can try to help other users after Go Live. I’ll be able to help them, while doing my regular job.

40. Organization Change ManagementSpecial Consideration – Helpdesk Communications • Develop tools for super users to capture and report SAP problems. Break-fixes, security, inquiries, enhancement requests etc..

41. OCM – Super User Development It’s been a week since Go Live. How is your Super User activity going? Are you able to help end users with SAP questions? It’s been a real challenge. Issues like security change requests, detailed questions, business processes that need revising; I can’t keep up with all the changes that SAP brought us. It’s hard to know the demands on the new Super Users during the first few months

42. OCM – Business Process Procedures Organization Change Management Business Process Procedures • Strategy and tactics to capture, document and control business process procedures • What docs to control & store, where and how to control & store • Web site for easy access, to SAP On line Help

43. What is a Business Process Procedure? BPP – a document to define steps – how each transaction is used within SAP system as configured in your company • Develop strategy and tactics to capture and control all business process procedures associated with implementation (Welch Allyn is in a regulated environment) • What docs to control & store, where and how to control & store • Web site for easy access, to SAP On line Help

44. Organization Change Management – OCM Initiatives Are Inter-related – Support and Enhance Each Other Security will determine training courses. Security/ Role Development Training BPP output is Training Doc input. Super Users key feedback on security issues Organization Change Management Business Process Procedures Super User Development BPPs on-line at Company Intranet SAP Help Super Users are key communications component Communications Related Initiatives

45. OCM – Key Learning Points • Why does OCM start out as the “Soft Stuff” and why does it always end up as the “Hard Stuff?” • Because changing individual behaviors and changing company culture is first perceived as “soft stuff” • It ends up as ‘hard stuff” when leaders must confront the people problems associated with a system implementation or upgrade • How a series of OCM initiatives can improve your company’s success levels with your implementation or upgrade? • Identify the people initiatives that are important to your project; and make them a priority! • What are common organization attitudes at the start of your project and how you help change them before and after Go Live • This is a software project, we don’t need to focus on our people, because our business processes won’t change • We can deal with the people problems, after all, if they don’t like the changes they can look for a job elsewhere

46. What Does This Mean to You? • Why are you here and why are you interested in ERP? • Is your organization preparing for, or currently implementing or upgrading ERP? • If yes – then what is your role/ involvement? • Has your ERP project team included any resources dedicated to Organization Change? • What do you need to do with Organization Change in your project?

47. Organization Change Management – the “Soft Stuff is the “Hard Stuff” Questions?