The Importance of Change Management in Application Managed Services Outsourcing

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1 A Poit of View The Importace of Chage Maagemet i Applicatio Maaged Services Outsourcig Itroductio Sice its arrival i the early 1960s, IT outsourcig has evolved sigificatly. Now ofte kow as maaged services, IT outsourcig has bee accepted as a strategic maagemet tool. It has bee adapted to cater to the eeds of various idustries, helpig them trasitio services from withi their operatios to a exteral provider while mitigatig associated risks. Over time, as Applicatio Maaged Services (AMS) outsourcig has become commoditized, the expectatios of cliets ad the demads o service providers have icreased. The evolutio from service provider to parter is depicted i Figure 1. Outsourcig Parter Outsourcig Provider Cost Optimizatio Global Coverage Agility, Faster Time to Market Trasitio of Applicatio Support & Maiteace Superior Service Delivery World Class Processes Evolutioary Iovatio Move to Maaged Services Model Figure 1: The maturig AMS relatioship: From service provider to iovative ad collaborative outsourcig parter Today, outsourcig of o-core activities has become a accepted operatig model. Customers expect the outsourcig parter to brig iovative ad strategic cotributios as part of service delivery. This paper cosiders how a structured orgaizatioal chage maagemet (OCM) approach ca improve the chaces of a smooth AMS outsourcig trasitio. The paper idetifies the people dimesio (as compared with processes or techology) as the key area for cosideratio. It cosiders the followig areas of activity: stakeholder egagemet ad leadership aligmet; chage aget etwork; chage readiess; commuicatio. The People Dimesio i AMS Outsourcig Trasformatios Groups impacted by a IT outsourcig iitiative iclude busiess/it employees, cotractors, ad at times icumbet service providers. Ay such iitiative brigs flux to the eterprise ecosystem as depicted i Table 1. Plaig the various stages of this chage ca make the process smoother for all stakeholders.

2 Cocer Area Queries ad Cocers Visio, Strategy, Beefits 1. Why are we doig this? What will be the results of the AMS Outsourcig trasformatio? 2. What additioal beefits or 'value adds' does the chose parter brig over the existig service provider? 3. What impact will busiess users experiece? AMS Outsourcig Model 1. What is the AMS outsourcig model? What will support look like i the future? 2. What applicatios ad techologies are parts of AMS outsourcig? 3. Will there be a chage i Level1 support? Which activities will be a part of Level2/Level3 support provided by the outsourcig provider? 4. How will the ehacemets be hadled? 5. How will issue resolutio be hadled across multiple service providers? 6. How will the outsourcig provider esure protectio of sesitive data? Trasitio Process What's i it for me? (WIFM) 1. What kid of support is expected from me durig trasitio? 2. I am part of the IT orgaizatio: What impact will trasitio have o my role or fuctio? How will the trasitio take place? What are the timelies? How ca we share our trasitio-related cocers? Will the support curretly beig provided be impacted durig the trasitio? How will laguage ad cultural differeces be addressed? Table 1: Areas of cocer for chage maagers to cosider OCM Approach i Addressig the People Dimesio Figure 2 depicts the miimal set of OCM itervetios i a AMS outsourcig trasitio. The itervetios are tightly itegrated ad feed ito each other. The subsequet sectios look at these stages of itervetio ad provide suggestios for each. People Dimesio Orgaizatio Chage & Chage Aget Network Commuicatio Stakeholder Egagemet & Leadership Aligmet Chage Readiess Figure 2: Four Key Itervetios to maage the people dimesio 2

3 Stakeholder Egagemet ad Leadership Aligmet Ay chage to a orgaizatio s structure has to be led by the executive leadership. There eeds to be cosesus amog leaders ad a shared pressure for chage. Commo Leadership Aligmet Challeges Suggested OCM Approach Executive leadership eeds: Acceptability across the eterprise of the sposored iitiative Uderstadig of the busiess visio amog the ext level of leadership A shared pressure for chage We recommed that represetatives from busiess ad IT participate i leadership aligmet workshops to: Articulate the case for chage Esure agreemet o the expected beefits from the iitiative ad the roadmap for achievig them Capture ad agree o challeges, issues, cocers ad recommedatios It is essetial that these workshops are aalyzed ad a report with recommedatios, accoutabilities, ad a clear roadmap is socialized with all. Leaders ofte operate i silos ad the result is a lack of effective collaboratio across busiess ad IT uits. Views may iclude such setimets as: I am resposible for Ifrastructure; AMS does't impact me directly. Map leaders o the power-iterest grid ad maage commuicatio accordigly. High Keep them Satisfied Key players Maage closely Miimal Efforts Commuicate regularly with them Power Low Low Iadequate commuicatio betwee busiess leadership ad IT leadership: IT teams may feel there is a lack of support from the busiess. Busiess teams may feel a lack of trasparecy ad egagemet from IT. Iterest High Develop a chage aget etwork with participatio from busiess as well as IT leaders. While maagig a AMS outsourcig iitiative at a leadig global food safety, water, ad eergy solutios provider we ra aligmet workshops i North America ad Europe. The workshops brought about a cosesus amog key stakeholders o evisaged program beefits, challeges, costraits, ad the approach towards addressig challeges. We observed that cocers ad suggestios greatly varied across the locatios. The challeges were further categorized across program maagemet, process, cultural, ad ifrastructure aspects. Focused recommedatios were arrived at to address each of the categories I additio to leadership aligmet, stakeholder idetificatio ad mappig is required. Start with idetifyig stakeholder groups, key stakeholders, their major issues ad cocers, their iterest i ad ifluece o the trasformatio, their reactios to the chage, ad the support required from them to achieve success. Based o the mappig ad aalysis, commuicatio strategy ad resistace maagemet plas ca be developed. Durig a trasformatio program for a govermet orgaizatio, we egaged early 3,000 stakeholders through workshops, iterviews, ad group discussios to arrive at the voice of the customer. This created acceptace amog key stakeholders ad our recommedatios were acted upo by the orgaizatio. Orgaizatio Chage ad Chage Aget Network To realize the sustaied beefits from AMS outsourcig, the chage has to be accepted ad adopted at all levels across the eterprise. It is essetial to build a chage aget etwork that icludes the orgaizatio s IT ad busiess divisios. The chage agets require coachig, support, ad focused commuicatio to esure they are give the kowledge ad tools required to facilitate the chage. A chage aget etwork should have represetatives from each of the busiess ad IT groups impacted by the chage. The represetatives help bridge the gap betwee the core team implemetig the chage ad the employees impacted by it. The etwork will eable employees to chage ad adapt to the AMS outsourcig. The chage agets drivig the adoptio of the AMS outsourcig should have a comprehesive view of the objectives ad iteded goals of such a chage. They eed to have clarity o the impacted areas of techology, busiess applicatios, ad support processes. They also have to be traied i the ecessary soft skills ad cultural sesitivities to help them settle ito their roles as the orgaizatio s opiio drivers. 3

4 At a cliet orgaizatio, by coachig ad moitorig a chage aget etwork of 1,800 persoel, we were able to reach out to 35,000 impacted employees. The chage agets that coducted the most chage awareess workshops ad coordiated higher participatio i surveys from their regios were recogized by the orgaizatio. Chage Readiess A compay s chage history is idicative of its chage readiess ad overall culture. Durig AMS trasitios, we look at the orgaizatios past iitiatives, success stories, ad failures. This provides useful isights ito what the orgaizatio should do differetly i the curret trasformatio. Withi the cotext of the chage history, we udertake readiess assessmets durig various stages of AMS trasitio. It is recommeded to complete oe assessmet at the start of kowledge trasitio ad oe at the ed, but before the provider starts deliverig the services. This assessmet helps maagemet uderstad the udercurrets i the orgaizatio, as well as the areas of cocer. The assessmet also forms the basis of a chage readiess report with recommedatios ad associated chage itervetios. Experiece tells us that if these assessmets are doe i a iformal settig, key employees are more likely to provide better isights. With oe of our North America cliets, we foud that the corporate marketig team was reluctat to complete a survey. Whe we discussed this with the executive sposor, we were iformed of past failures, their causes, ad how this led to a culture where employees were resistat to discussig past failures i public forums. We chose to collect iputs through iformal meas ad also ehace our itervetios o stakeholder maagemet, chage aget etwork, ad commuicatio. The recommedatios ad associated chage itervetios i the readiess report should: Highlight the lik betwee outsourcig, busiess strategy, ad IT visio, ad explai the eed for chage Emphasize the eed for regular chage-related commuicatio by seior leaders Explai the process chages related to outsourcig Outlie the expectatios from idividual employees based o their roles withi the orgaizatio Address the cocers of employees affected by the chage Commuicatio Commuicatio durig AMS trasitios is ofte oe-dimesioal. Commuicatio is ot followed through. Employees are ot give a opportuity to share their opiios so their cotributios do ot feature i the chage process. As a result, importat issues are ot brought to a logical coclusio ad this affects the level of awareess ad acceptace of the AMS trasitio withi the orgaizatio. Iitiate by creatig a trasitio commuicatio strategy that leverages multiple chaels. The strategy should iclude commuicatio evets that target specific audieces, their commuicatio eeds, pla for cotet creatio, cotet approval, ad delivery. The schedule ad cotet for these evets should be desiged to shore up support for the trasitio the orgaizatio is goig through. O AMS trasitios, we use most of the commuicatio chaels depicted i Figure 3. Itraet AMS Home Page Social Media Newsletter, Magazies Posters Videos SMS Workshop Tow-Hall 1:1 Meetigs Figure 3: Chael mix 4

5 The commuicatio cotet must iclude resposes to frequetly asked questios (FAQs) ad be flexible to keep aswers curret. Suggested AMS-specific FAQs iclude: What is AMS outsourcig? How is AMS itegral to the orgaizatio s visio? Why is the orgaizatio trasitioig AMS to a outsourcig provider? What value will the outsourcig provider brig to the orgaizatio? What are the applicatios that will be supported by the outsourcig provider as part of AMS? What are the trasitio timelies? Will the applicatio support be affected durig the trasitio to the outsourcig provider? What kid of support is expected from idividual employees? What impact will this trasitio have o employee roles? Who are the key members of the trasitio team? Dissectig the chage commuicatios at a North America cliet, we foud that icomplete commuicatios with o follow-up mechaism had icreased the stakeholder cocers. We defied a comprehesive commuicatio strategy ad helped the cliet successfully execute it. The CIO observed that it was the first time such a detailed stakeholder maagemet was doe ad despite program maagemet challeges, this set the groud for a successful trasitio. Coclusio As outsourcig models have evolved, the expectatios ad demads placed upo outsourcig parters have shifted. As well as providig service support, outsourcig providers are ow expected to support the trasformatio ageda. By followig a structured approach across four areas of itervetio, the people ivolved i a outsourcig iitiative ca play a large part i the value ad success of the trasitio. Usig prove chage maagemet techiques, orgaizatios ca build resources that support larger busiess agedas such as trasformatio ad iovatio. About the Author Sitesh Porwal brigs 24 years experiece across disciplies such as Cosultig, Sales, ad Delivery, ad has worked i the US, UK, Caada, ad Japa. He maaged the operatios of TCS' Pittsburgh ad Sa Fracisco offices, providig iovative solutios to Fortue 500 compaies. As a cosultat, his focus areas iclude Orgaizatioal Chage Maagemet, Program Maagemet, ad Kowledge Maagemet. A top-rak holder from the Birla Istitute of Techology ad Sciece (Pilai), Sitesh has a bachelor's degree i Electrical ad Electroics Egieerig ad a master's degree i Mathematics. 5

6 About TCS' Global Cosultig Practice TCS Global Cosultig Practice (GCP) is a key compoet i how TCS delivers additioal value to cliets. Usig our collective idustry isight, techology expertise, ad cosultig kow-how, we parter with eterprises worldwide to deliver itegrated ed-to-ed IT eabled busiess trasformatio services. By tappig our worldwide pool of resources osite, offshore, ad ear-shore our high caliber cosultats leverage solutio accelerators ad practice capabilities, balaced with our kowledge of local market demads, to eable eterprises to effectively meet their busiess goals. GCP spearheads TCS' cosultig capacity with cosultats located i North America, UK, Europe, Asia Pacific, Idia, Ibero-America, ad Australia. Cotact For more iformatio about TCS' cosultig services, us at About Tata Cosultacy Services Ltd (TCS) Tata Cosultacy Services is a IT services, cosultig ad busiess solutios orgaizatio that delivers real results to global busiess, esurig a level of certaity o other firm ca match. TCS offers a cosultig-led, itegrated portfolio of IT ad IT-eabled ifrastructure, egieerig ad assurace services. This is delivered through its uique Global Network Delivery ModelTM, recogized as the bechmark of excellece i software developmet. A part of the Tata Group, Idia s largest idustrial coglomerate, TCS has a global footprit ad is listed o the Natioal Stock Exchage ad Bombay Stock Exchage i Idia. IT Services Busiess Solutios Cosultig All cotet / iformatio preset here is the exclusive property of Tata Cosultacy Services Limited (TCS). The cotet / iformatio cotaied here is correct at the time of publishig. No material from here may be copied, modified, reproduced, republished, uploaded, trasmitted, posted or distributed i ay form without prior writte permissio from TCS. Uauthorized use of the cotet / iformatio appearig here may violate copyright, trademark ad other applicable laws, ad could result i crimial or civil pealties. Copyright 2014 Tata Cosultacy Services Limited TCS Desig Services I M I 05 I 14 For more iformatio, visit us at

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