C H A P T E R 1 0
Change management
Table of contents
Learning outcomes 126
Management issues 126
Chapter at a glance 127
Learning outcomes
After completing this chapter the reader should be able to:
Identify the different types of change that need to be managed for e-commerce
Management issues
The issues for managers raised in this chapter include:
What are the success factors in managing change?
Should we change organisational structure in response to digital business? If so, what
are the
options?
How do we manage the human aspects of the implementation of organisational change?
How do we share knowledge between staff in the light of high staff turnover and
rapid
changes in market conditions?
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Chapter at a glance
Main topics
The challenges of digital business
transformation
Different types of change in
business
Planning
change
Focus on
Knowledge
management
Case studies
10.2 Using Enterprise 2.0 tools to support knowledge management at Janssen-Cilag
Australia
Suggested teaching and learning approaches
Note that in 2014 after this edition of the book was written, different reports describing
change management for digital business were published under the label digital
transformation. To see data and discussion of these see http://www.smartinsights.com/
manage-digital-transformation/.
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Suggested approach:
The topic of change and its scope can be introduced using Figure 10.1 and Figure 10.2.
Success factors are illustrated at the base of Figure 10.1: communication, education and
training could be added to these boxes. Students can be prompted for different aspects
of change. Students can be asked about some of the main challenges and then these can
be compared to Figure 10.3.
Human resource requirements are introduced by the complex structure required for a large
company in Figure 10.8. The key resources required in a smaller organisation can be
discussed with students (i.e. managing Reach/Promotion, site content and analytics and
customer relationship management through email marketing).
Organisational structure change is illustrated well by the diagrams of Figures 10.9
and 10.10.
The human dimension of change is introduced well by Table 10.5. Suitability of
different types of cultural orientation to change is indicated by the framework on p. 500.
Case studies
Case study 10.1 Process management: making complex business simpler
Questions
1. How does the article suggest that business thinking and practice has evolved
since the
exhortations for business process re-engineering in the 1990s?
Many of the toolsets are similar as indicated by this quote:
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greatly help information to flow through organisations by coordinating and sometimes
2. Summarise the benefits for BPM discussed in the article.
An example from the article:
BPM has obvious advantages. Remodelled processes are usually more effective than
their predecessors, generating immediate cost savings and competitive advantages. MSB
International, an agency supplying workers on temporary contracts to companies, used
3. Discuss the need for a concept such as BPM when all new information
systems and digital business initiatives are ultimately driven by process
improvement.
It is a useful label for the skills and tools required for change management associated
Supplementary question
The problems with BPM are indicated by the quotes at the end of the article.
Nevertheless, BPM is no walkover. As a complex set of technologies that do not always
work
together easily, it requires great effort and discipline to implement. The hardest part is
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problems solved, mapping
internal business processes to core IT processes is another
problem.
Gartner, the IT consultancy, said in a research note in December 2002 that corporate
satisfaction
with BPM is already high and is continuing to rise making it a rarity in the IT
Case study 10.2 Using collaborative tools to support
knowledge
management
at Janssen-Cilag Australia
Questions
1. What does this case study suggest, are the main challenges for different stages
of
introducing a wiki or other Enterprise 2.0 approaches in a large organisation?
The stages are summarised by the subheadings in the article, that is:
Requirements gathering need to consult widely, given the culture of this organisation
Pitching to business the selling of the solution focused on simplicity and not being
too restrictive
2. Which solutions does Nathan Wallace describe as being effective for
overcoming these
problems?
Chaffey, Digital Business and E-Commerce Management, 6th edition,
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Questions for debate
Debate 10.1 Organising for digital business
The introduction of a separate digital business function is necessary in large
organisations to implement digital business effectively.
This is similar to the discussions in Chapter 5 about the need for a distinct digital business
manager. Summary of arguments for:
Having a unit will ensure that digital business is planned with clear objectives and
strategies this is less likely if it is subsumed in another department
Suitable skills can be recruited into the department
Emphasises the importance of digital business for change acts as a catalyst
Debate 10.2 Creating a social business
Creating a social business is impractical for most organisations since the types of
changes needed are likely to be opposed by managers of different functional areas of the
organisation.
Summary of arguments for:
For knowledge management (KM) to be successful it does require changes to processes
(and the people involved in operating them)
Summary of arguments against:
An opportunity is missed if KM is not used as a way of gaining additional information
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Exercises
Self-assessment questions
1. Summarise the main types of change that need to be managed during
introduction of
digital business.
Business level change new business processes
Technological change new systems
2. What approaches must managers take to achieve change management
successfully?
Support from senior management
Education explain why the system is required by the business and its impact on staff
3. Outline the main stages of a sell-side e-commerce implementation.
Initiation
Analysis/market research
Chaffey, Digital Business and E-Commerce Management, 6th edition,
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4. Explain the role of prototyping in developing a sell-side e-commerce solution.
Prototyping
Prototyping is an iterative process where website users suggest modifications before
further prototypes and the live version of the site is developed.
The main benefits are as follows:
It prevents major design or functional errors being made during the construction of the
website that may be costly and time consuming to fix once the site becomes live and may
5. Describe four different approaches to retaining staff.
Various elements of a benefits package
Increase remuneration
6. What alternative approaches are there to structuring e-commerce within an
organisation?
1. A separate operating company. Example: Prudential and Egg (www.egg.com).
7. Which type of organisational culture is most amenable to digital business-related
change?
The four types of culture described in the text are as follows:
1. Survival (outward-looking, flexible) the external environment plays a significant
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2. Productivity (outward-looking, ordered) interfaces with the external environment
3. Human relations (inward-looking, flexible) this is the organisation as family,
4. Stability (inward-looking, ordered) the environment is essentially ignored with
8. What are some of the risks of digital business change, and how can they be
managed?
See table (below in Activity 10.5 answer) for a suggested solution.
Essay and discussion questions
1. Write an essay on approaches to managing digital business change.
Suggested approach:
Introduction to scale of change is it on a project basis for a single process, or across
the whole organisation as in the case of Guinness?
Identify the change levers and drivers
2. Total outsourcing of digital business operations is the best method to
overcome the skills
shortage. Discuss.
One approach to this question is:
Define outsourcing.
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List the different aspects of digital business operations that can be outsourced and
3. Contrast the project management stages involved with sell-side and buy-side e-
commerce
implementations (referring to Chapters 11 and 12 will help with this
question).
Issues to be discussed:
This is a question about the systems development cycle brief review of purpose and
main
stages as introduction.
4. High turnover of technical staff is a fact of life in a buoyant job market and there
is little
that can be done to reduce turnover. Discuss.
5. Develop a change management plan for a company you are familiar with.
This is dependent on the situation chosen, which could be a large-scale digital business
change or
smaller-scale change introduced in one part of the business. For the
question, it should be
assumed that the objectives and strategy have already been
identified. The plan should include:
Project objectives
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6. You are the HR manager at a new–media design agency and are evaluating the
use of
overseas contract workers to help on projects. Write a report summarising
the feasibility of
this approach.
The following issues can be considered:
Cost (research using articles on this topic)
Control (how is quality control maintained at a distance?)
7. Write a report on how the knowledge within a company can be better managed.
Refer to
particular technologies and procedures for managing explicit and tacit
knowledge.
Approaches should include assessment of the following for the current situation, and
then a
discussion of how they can be transformed:
How is operational, tactical and strategic information transferred vertically within
the organisation, and how is it transformed into knowledge?
How is information transferred horizontally within an organisation (between
departments)?
8. Assess the merits of virtualisation in an organisation of your choice.
In this context virtualisation refers to outsourcing or forming teams for a one–off project
basis.
Suggested structure:
Definition, benefits, disadvantages
Examination questions
1. Explain what prototyping is and why it may be used on an e-commerce
implementation.
Prototyping
Prototyping is an iterative process where website users suggest modifications before
further prototypes and the live version of the site is developed.
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The main benefits are as follows:
2. Summarise the main human resource requirements for an e-commerce
implementation.
Project manager
Marketing or brand manager
Business analysts (for requirements)
3. A company has implemented a brochureware site without any changes to
managerial or
organisational structure. They are now seeking to achieve one–
third of their revenues via
the website. What changes to managerial and
organisational structure would you suggest?
Options are required to give focus to achieve this dramatic change:
Separate e-commerce department with separate budget
4. Explain how knowledge management differs from information management.
Data is transformed into information to add value, but it still requires experience or
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5. Explain the concept of the virtual organisation. What are the advantages over a
traditional
organisation?
A virtual organisation has no clear physical boundaries. It operates through control of
resources
from a number of organisations, using information systems to coordinate and
share information.
Possible advantages are:
6. Name four approaches a company can take to increase retention of technical staff.
Various elements of a benefits package:
7. Prioritise, with justification, your recommendations for outsourcing these
functions: e-commerce strategy, e-commerce hosting, e-commerce content
updating.
Hosting this is low risk outsourcing since customer service quality can be
8. You are project manager of an e-procurement implementation. How would you
maximise
acceptance of the new system among staff?
Support from senior management.
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Activity answers
Activity 10.1 Managing change at a B2C company
Speculate how the introduction of changes by a CEO or managing director such as
those
illustrated by the top four boxes of Figure 10.1 would affect different employees
at a B2C company. Imagine you are each of the following people. What would your
reaction be on a
professional and a personal level? What would be your role in affecting
change?
Marketing manager
Warehouse manager
HR manager
IS manager
Employee in call centre
Marketing Manager the marketing managers are likely to welcome digital business-led
change in a professional capacity since it potentially gives them the opportunity to
develop a new
channel to market, which could help increase turnover. On a personal
level, they may be worried about whether they have time to manage change and
whether they or their staff have the appropriate skills. They may also be concerned as
to whether the senior managers
are prepared to walk the talk as well as talking the
talk. They are also uncertain where
the responsibility for digital business lies is it
with the CEO, the IS manager or themselves?
Warehouse Manager the warehouse managers may imagine that this change will not
Activity 10.2 Options for outsourcing different digital business activities
A B2C company is trying to decide which of its sell-side digital business activities
it should
outsource. Select a single supplier (single tick for each function) that you
think can best deliver each of these services indicated in Table 10.3. Justify your
decision.
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1. Strategy management consultant. These organisations have an established reputation
in strategic consultancy and many are thought leaders in implementing digital business.
2. Design new media agency. These are start-up companies who specialise in e-
4. Online promotion new media agency. Also the bread and butter of the media
agency.
5. Offline promotion traditional marketing agency. New media agencies tend to have
6. Infrastructure ISP or traditional IT supplier. This is the clear choice for this activity,
although larger companies may want to retain this facility in-house.
Activity 10.3 Which is the best organisation structure for e-commerce?
1. Match the four types of companies and situations to the structures (a) to (d) in
Figure 10.9.
Figure 10.9 Summary of alternative organisational structures for e-commerce suggested
in Parsons
et al
. (1996).
(a)
A separate operating company. Example: Prudential and Egg (www.egg.com).
The organisation structures match as follows:
(a)
No formal structure for e-commerce.
Chaffey, Digital Business and E-Commerce Management, 6th edition,
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2. Under which circumstances would each structure be appropriate?
3. Summarise the advantages and disadvantages of each approach.
Activity 10.4 Changing the culture for digital business
Review the four general categories of organisational cultural orientation summarised by
Boddy et al. (2001) and take each as characterising four different companies and then
suggest which is most appropriate for digital business. State whether you think they are
most likely to occur in a small or a larger organisation.
Survival (outward-looking, flexible)
this organisation is likely to be responsive and
will
have a thriving on chaos mentality that will fit in well with the dynamic
Productivity (outward-looking, ordered)
this company is arguably best placed to
meet digital
business. Existing interfaces with the environment such as links with
Human relations (inward-looking, flexible)
this company is well placed to
communicate well with customers and understand their needs from digital business.
Activity 10.5 Digital business risk management
Review this chapter with reference to Chapters 4 and 5 and produce a grid with four
columns describing the risk for a company with which you are familiar, or for a typical
B2C company, assessing its probability on a scale of 0 (no risk) to 10 (very high risk), its
impact from a scale of 0 (no impact) to 10 (catastrophic), and possible solutions.
Chaffey, Digital Business and E-Commerce Management, 6th edition,
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Table below provides a model answer for risk assessment.
Risk Probabilit
y
Im
p
act Solution
Insufficient senior
management
commitment
5 7
Education/training/lobbying
by digital business
manager to achieve buy-in
High staff turnover/key
6 5 Use monetary incentives
Problems with new
technology delaying
implementation (bugs,
speed, compatibilit
y)
8 8 Allow sufficient time for
volume, performance
testing
Staff resistance to
4 4 Education, training,