Top-Down versus Bottom-Up Change Management

Top-down change management is the traditional management strategy in which all decision-making, guidance, and authority flows from top management down to everyone else. It is typically the only methodology used to manage change in organizations. This approach often fails due to low employee buy-in and lack of flexibility and empowerment of line management and front line employees. An even bigger problem with this methodology occurs when top-management doesn't understand the work processes of their own company, and so they are unable to make good decisions about how things will get done in the new system. This dissonance will lower productivity and ultimately damage employee morale.

Experienced project managers understand that employee buy-in is the most important variable in the success of any change management process. The most successful outcomes are achieved when supervisors actively engage employees in the change management process using bottom-up management techniques. This is the most effective method for managing employee expectations and securing end-user commitment.

Supervisors have the most direct line of communication with employees, and they have the greatest influence on employees' perception of change and of new systems. Each employee's attitude to the project needs to be assessed, and individual concerns addressed one-on-one. This should be treated as an educational process, with a goal of dispelling negative attitudes through increased understanding of the process, and the sharing of a clearly articulated common goal.

Change can be challenging, but handled correctly, it need not pose an insurmountable obstacle to achieving an organization's goals.

Seven ERP software implementation success factors

1. Focus first on business processes and requirements, not on the choice of the software.
 
2. Focus on achieving a healthy ERP ROI (return on investment), including post-implementation performance measurement, by establishing key performance measures and setting baselines and targets for those measures.
 
3. Strong project management and resource commitment.
 
4. Secure the commitment from company executives including the CEO and the entire C-level staff.
 
5. Validate the software vendor's understanding of the business requirements/project plan and that these needs will be met.
 
6. Ensure adequate training and change management. People make or break ERP implementations. Job redesign and training of staff will be needed, bit of which will take time and money.
 
7. Make sure you understand why you're implementing ERP. If process improvements or targeted technology will meet your business needs, you will be able to reach your objectives at a lower cost. The most appropriate choice for your situation may or may not involve implementing an ERP.

The decision structure needed to make the right choice when it comes to an ERP implementation is complex. Business needs must be understood, and business processes clearly defined. Rushing through this process will lessen the chance for the project's success.

Adapted from a White Paper by the Panorama Consulting Group, March 2009: http://bit.ly/bcs9NQ

Reasons e-Procurement Projects Fail to Achieve their ROI

The typical ROI of an ERP implementation shows break-even in about two years. Real world experience shows that break-even usually doesn't happen until more than four years after implementation.  Many companies are forced to give up on these projects because implementation costs have run over and there was a lack of tangible results.

Sourcing strategy and technology are equally necessary in this scenario. Sourcing strategy finds and pursues the savings, while technology captures the data so that the savings can be sustained over time.  Initial aggregation of spend and negotiation of better deals with suppliers can help offset the costs of an ERP implementation.

Equally important is a thoughtful category rollout.  It's best to go with straightforward categories first, the ones most likely to meet with success, and refrain from choosing complex categories simply because their spend volume is great.

Electronic catalog content is important for a successful ERP rollout.  If the vendors don't have adequate content in their eCatalogs, or they fail to update and cleanse their data, users cannot buy, and the ROI of the ERP is undermined.

Effectively transitioning employees onto a new ERP system so that adoption rates are high and tools are used correctly requires a consistent message from all levels of the organization that this is priority #1. Communication needs to to be clear and consistent, training needs to be thorough and ongoing, and users need to see evidence that their efforts are paying off with feedback on savings and compliance rates.

Change management is the least expensive aspect of an e-Procurement project, and yet the lack of it is a leading cause of project failure.

Adapted from a White Paper by ICG Commerce, August 2009: http://bit.ly/dkCaXk

The Twelve Cardinal Sins of ERP Implementation

The biggest issue in ERP use is implementation failure.  This often comes about as a result of the Twelve Cardinal Sins of ERP Implementation, which are:

1. Lack of top management commitment
2. Inadequate requirements definition
3. Poor ERP package selection
4. Inadequate resources
5. Resistance to change/lack of buy-in
6. Miscalculation of time and effort
7. Misfit of application software with business processes
8. Unrealistic expectations of benefits and ROI
9. Inadequate training and education
10. Poor project design and management
11. Poor communications
12. Ill-advised cost-cutting

There are numerous similarities of this list with the essence of John P. Kotter's book "Leading Change" (http://bit.ly/bRwhJ1). To succeed in implementing any kind of major change in an organization there are several requirements. It's necessary to establish a powerful guiding coalition and to assemble a group with enough power to lead the change effort. A vision of this change must be created and communicated, others must be empowered other to act on this vision so that obstacles can be removed and small victories achieved. These improvements must then be consolidated and new approaches institutionalized.

Too often, change is dictated by executives who have little or no understanding of the processes underlying their business. Without this understanding, there is little chance that a chosen solution will represent an improvement, and in a worst case, it could be a disaster. Regardless of of the outcome, if the people doing the work of the business don't believe in the proposed change, it is destined to fail. The most important part of implementing change is to get the buy-in of the workers and give them the support that they need so that they can succeed. This means resources, training, and rewards for the extra effort required to bring about change successfully.

Adapted from a White Paper by Rockford Consulting

http://bit.ly/aigWub

Massachusetts job data point to further recovery

The unemployment rate remained steady, the workforce grew, and new unemployment claims are down.  This means the discouraged are returning to the job hunt, and employers are starting to hire...

http://bit.ly/aUpZ82

The U.S. economic recovery is on track and labor data should look better in March and beyond

http://bit.ly/aw3h5a

FedEx sees economic recovery spreading

Let's hope it's true...
http://bit.ly/aLlyxQ

The Case Against Layoffs - They Often Backfire...

Newsweek published this insightful article on the fallout from layoffs, and how they hurt employees, bot the layoff victims as well as survivors.  Surprisingly, they also negatively impact the bottom line of businesses.

http://bit.ly/97Nywb

Unemployed persons by duration of unemployment

One of the true surprises of this recession has been how long it is taking folks to find new jobs.   February 2010 statistics show that 58.9% of the unemployed have been out of work 15 weeks or longer, and 40.1% have been out for six months or longer.  This compares with 42.3% (15+ weeks) and 23.4% (6+ months) just one year ago (February 2009).

I know many people approaching 18 months, 2 years, and even longer periods of unemplyment with no end in sight.  Will these folks ever work again?  They must wonder if it's true.  Employers allegedly want to hire people in their 30s - for folks over 40, a period of extended unemployment only takes them further away from this employer ideal.

To see the full table of statistics, follow this link:
http://bit.ly/dpJxMO

It's time to spring forward again

Daylight Saving Time starts this weekend, so set your clocks forward lest ye be late to church on Sunday...

http://bit.ly/bKcIEt

Euro-zone industrial production posts record rise Rises 1.7% in January, December production revised higher

A record monthly increase in industrial output across the euro zone in January supports sustainability of economic recovery in the region, but doesn't completely dispel concerns.


http://bit.ly/d9zCuX

Few enterprises know what they spend, on which products, or with which suppliers...

In the absence of good spend data supply managers and business executives are forced to develop strategies and decisions based on intuition rather than actual data.

• incompatible data sources 
• incomplete and/or inaccurate spend data 
• insufficient category expertise 
• inconsistent naming conventions 
• limited analysis tools.

In the absence of all of these, it will be difficult for any organization to understand how it spends its money or how to improve procurement practices.

Best Practices in Telecom Spend Management

The challenge: few enterprises have a detailed understanding of how much they’re spending on telecom equipment and services or with whom they are spending these dollars. The reason? Telecommunications services purchase decisions are widely decentralized and poorly controlled at most companies.

In fact, a June 2004 Aberdeen benchmark study of telecommunications spend practices of 115 enterprises uncovered the following:

• 7% to 12% of telecom service charges are in error. For large enterprises, such errors are costing more than $8 million a year in lost profits.

• Up to 85% of a typical enterprise’s telecom bills are not audited and are simply paid in full. For bills that are validated, billing analysts most often examine just a subset of invoices associated with the largest spending.

• There is a lack of insight into telecom spending. Forty-five percent of companies are actively managing less than 50% of overall telecom spending.

http://bit.ly/bA0SUP

How controlled is YOUR telecom spend?

In my experience, telecom is viewed as a necessary evil, and the invoices and service are never examined for errors or waste. I instigated a detailed spend analysis of a previous employer's telecom service, and discovered:

1. The bill had not been examined in ten years.
2. 34 out of approximately 185 phone lines on the bill did not exist.
3. Telecom usage patterns had changed since the services were installed, and many of the lines were no longer needed.
4. The bill contained many errors, including double charges, erroneous rental charges and charges that were patently incorrect.
5. These problems were organization wide.
6. Despite the fact that this was draining much needed funds from the budget, nobody cared.

The Aberdeen Group published a White Paper titled "Best Practice in Telecom Spend Management", detailing these problems. In it, they concluded that:

7% to 12% of telecom service charges are in error. For large enterprises, such errors are costing more than $8 million a year in lost profits. 

Up to 85% of a typical enterprise’s telecom bills are not audited and are simply paid in full. 

There is a lack of insight into telecom spending. Forty-five percent of companies are actively managing <50% of overall telecom spending.

To read this insightful paper, follow this link:

http://bit.ly/bA0SUP

Senate passes $149 bln for jobless aid, tax breaks

Here's a statistic I have not heard before:

"More than 40 percent of unemployed Americans have been out of work for at least six months, the usual cutoff for jobless benefits. Congress extended the program to cover those out of work for nearly two years in some high-unemployment areas, but millions could still exhaust their benefits starting next month without a further extension."

http://bit.ly/9lFvcR

U.S. Labor Market Continues To Score Gains In February

It's hard to tell when the economy turns, either for the good or for the bad, because the data needs to show a trend over time. We often don't know if we're in a recession or out of one until months after the fact. It's being reported now that this recession ended in the the third quarter of 2009.  But when will the jobless recovery end, and hiring begin in earnest?

Here's an article that suggests we are starting to see improvement in the job market.  

http://bit.ly/9TWPim

It's counterintuitive, but the employment rate needs to get worse before we can start to say things are actually getting better. Those who gave up looking for a job, and who were therefore no longer counted as being in the labor market, need to see enough hope in the local economy to start their job search anew.

Anecdotally, friends and family who are searching for work are reporting more positions posted, and they are getting more face-to-face interviews. Lets hope that the trend continues.

World equities up 73 percent a year after crisis low

"Equities have had a volatile 2010 so far, but globally they remain around 73 percent higher than the low ebb of the financial crisis exactly 12 months ago."

Let's hope this is just another sign of better things to come...

http://bit.ly/bUwMCO

Oil touches 8-week high over $82 on optimism

http://bit.ly/bslP0a


Is the economy improving? Are we out of the Great Recession already, and just don't realize it yet?

Unemployment benefits: Jim Bunning relents, Senate passes extension When Sen. Jim Bunning lifted his block, the Senate approved a 30-day extension of federal unemployment benefits. More than 200,000 unemployed Americans were set to lose benefits, half of whom already had stopped receiving unemployment checks.

http://bit.ly/aSpjcR


Who among us doesn't know people who are unemployed? This particular episode of senate wrangling scared a lot of people. Without unemployment checks coming in, people would need to turn to other forms of public assistance. Would this represent progress? Probably not.


It remains to be seen how the jobs bill will play out, and if it will, in fact result in job creation. This is important not only to the ranks of the unemployed, but also the overworked employed folks who need help.

Managing and Leading: What's the Difference?

Everyone is fascinated by "leadership". It's viewed as the secret ingredient that's needed to transform a good organization into a great one. But great managers are the backbone of successful organizations, and the truth is you need to have both kinds of people. The roles of leader and manager are completely distinct, with different responsibilities, starting points, and talents required to excel. Anyone can be a leader or manager, but to be great at either requires certain core talents.

Great managers turn each employee's talent into performance. They do this by making each employee believe that their success is the manager's primary goal. Employees will respond to this by giving their best effort. Great managers are tough on their employees; they hold them to high standards, and then show them how to achieve these benchmarks. They paint a picture of excellence in a role, and then coach their employees to embrace this vision.

Great managers commitment to each employee's success is driven by a form of spontaneous intuition commonly known as the coaching instinct. They are drawn to and thrill at the small successes of others, and this is a talent that is innate and cannot be learned.

Great leaders rally people to a better future that they see as a vivid image in their heads. Leaders are fascinated with the future, they are restless for change, impatient for progress, and deeply dissatisfied with the status quo. This friction between "what is" and "what could be" propels leaders towards that better future.

The core talents of great leaders are ego and optimism. The former is important because ego allows a leader to channel his self assurance, self confidence, and press them into the service of an enterprise bigger than himself. The latter is important because leaders must believe deeply and instinctively that things can get better. Not just hope they can be improved, or to put on a brave face. The possibilities of the future must seem so intense that they have no choice but to do everything in their power to make them real.

The necessity for great leaders to possess both optimism and ego means that they are born, not made. The skill of bringing the best performance from employees also cannot be learned. You either have this ability, or you do not. It is possible to be both a great manager and a great leader. but it helps to know when to change gears. Management starts with the person, while leadership starts with the picture of where you are headed.

Adapted from: Buckingham, Marcus, The One Thing You Need to Know ...About Great Managing, Great Leading, and Sustained Individual Success. New York: Free Press, 2005, pp 29-71.

How Can You Become A Better Purchasing Professional?

Define the criteria for being a good purchasing professional. Is it cost savings? Continuity of supply? Innovation? All of these and more?

Establish metrics that support the criteria. For example, for continuity of supply, you might select "Percent on-time delivery."

For each metric, determine the value that would separate "good" performance from "average" or "mediocre" performance in your particular situation. For example, for actual cost savings captured, is it $10,000 per year? $100,000 per year? $1,000,000 per year?

Establish the baseline of your current performance. Now that you know the line that separates good performance from mediocre performance, measure your current performance to determine whether you meet, exceed, or fall short of that standard.

Analyze what you do for improvement opportunities. Identify changes that you can make that will help you improve your numbers. If you already exceed the standard, aim even higher!

Improve your performance. Now that you've identified changes you can make, make them!

Hold yourself accountable. Put in place methods of ensuring that you don't lose focus. This can come in the form of charts that you hang in your office, promises to management, self-reward systems, or even hiring a personal coach. It's easy to lose momentum if you don't have some tangible way of maintaining your focus.

Adapted from: Can You Become A Better Purchasing Professional?, http://bit.ly/cTEjKu