Business innovation and transformation with IT

Business Innovation with

Information Technology Corporate Change Power as driver for organisational

change

Leon Dohmen

June 2011

From prey to hunter

As a cure for the poor results of business innovation in which IT plays an important role, this

article presents IBAFrame. IBAFrame stands for the IT Benefits Accelerator Framework.

IBAFrame ensures, if applied properly, that innovations in which IT plays an important role,

will have better results and an improved use of the IT possibilities. IBAFrame combines

knowledge and insights from the professional fields project management, change

management and IT auditing.

Business Innovation and Transformation with IT

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Introduction

Extended research of Jagdish Sheth and Rajendra Sisodia,1 illustrates that the success of

companies is purely a matter of luck. Most companies are occasionally at the right moment,

with the right product in the right market. It is like winning the lottery and then stating it was

planned this way. As soon as the environment of the company changes, many companies fail

in their transformation.

Today’s business environment is changing so fast that companies are being forced as never

before to rethink their core marketing strategies. One of the important current mainsprings of

business innovation is information technology. According to Carlota Perez information

technology (IT) is called the fifth technological revolution. Moreover, according to Tom

Forrester (1989): ‘Our high-tech society is the most definitive account available of the

technology revolution that is transforming society and dramatically changing the way we live

and work and maybe even think’.2 Previously we have faced the following technological

revolutions started from 1770:

The industrial revolution;

The era of steam machines and rail ways;

The era of steel, electricity and machine construction;

The era of motorcar and mass production.

Business Innovation, information technology and organisational change (business

transformation) are travelling hand in hand in the fifth technology revolution. Successful

organisational change where IT plays an important role is a necessity to survive. Successful

transformation is, however no tip or trick. Choosing the correct steering is only possible if the

context and consistency of technology, organisation and people (figure 1) is understood in

their relation to the fast changing environment. The correct merge of technological

possibilities, flexibility in processes and structure within organisations and the proper attitude,

knowledge and skills of involved management and employees will lead to corporate change

power that gives direction and helps to choose the proper approach for a successful

implementation of organisational change where IT plays an important role.

Figure 1: Context and consistency of technology, organisation and people

1 Sheth, J. (2009). Chair of Marketing Strategy in the Goizueta Business School at Emory University. Rajendra

S. Sisodia is professor of marketing and founding director of the Center for Marketing Technology at Bentley

College. 2 Forester, T. (1989). The Story of the Information Technology Revolution, MIT Press.

Technology

• Applications

• Middleware

• Infrastructure

Organisation

• Processes

• Structure

• Location

People

• Attitude

• Knowledge

• Skills


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Many organisations struggle with IT related innovation, meaning innovations due to IT, in

which an organisation feels like a victim. This article introduces organisational change by

means of IT. According to the dictionary the words by means of refers to as ‘based on’. This

implies that not IT, but the organisation itself is steering and selects the IT solutions which are

important for the corporate objectives. Organisational change by means of IT involves:

changes of the IT solution itself; this could be a change of the existing IT solution or the

implementation of a new IT solution (IT project);

changes in the work domain of users of IT solutions (user organisation or demand side of

IT);

changes in the work domain of IT support (IT organisation or supply side of IT).

Organisational change by means of IT refers to changes in all three subsections and their

mutual influencing and dependency therein. Continuous alignment and connection are

required to have the subsections mutually join each other perfectly well, in order to ensure

that innovation in which IT plays an important role becomes successful. IBAFrame (IT

Benefits Accelerator Framework) is the indispensable link between the three subsections of

changes by means of IT (figure 2).

Figure 2: Alignment and connection between the subsections involving changes by means of IT

The corporate power to change is one of the most important pillars of the organisation’s

success in the current fifth technology revolution.3 The power to change determines the

change result of organisational change - and thus business innovation - in which IT plays an

important role. IBAFrame helps to detect and improve the weak spots of the corporate power

to change within the own organisation. IBAFrame can also compare the own corporate power

to change with other organisations within or outside the industry (figure 3). This article

outlines the main terms related to IBAFrame. These terms are:

power to change;

3 Perez, C. (2009). Technological revolutions and techno-economic paradigms, TOC/TUT working paper no. 20.


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change result;

change instruments;

work forms.

Food for thought: The total is more than...

Perhaps you as a reader, might think: I have heard this before: ‘The total is more than the sum

of the parts. But then, make it measurable’. To make this clear, we use an example from

athletics from the Dutch relay team on the 4×100 metres sprint. On July 1, 2007 the Dutch

record for the one hundred metres was held by Churandy Martina with 10.10 seconds.

Churandy Martina is one of Antilles best known sportsman. He won the gold medal in the 100

m during the Pan American Games (Rio de Janeiro, 2007) He also ranked 5th in the 100

metres and 200 meters sprint world championships (Osaka 2007, Japan). In the theoretical

case Churandy Martina runs 4 times, simple math illustrates that as such the fastest possible

time to reach for the 4×100 metres could be 40.40 seconds. However, until first of June 2009,

the fastest time of a Dutch relay team on the 4×100 metres is 38.63 seconds. This is what is

meant with the total is more than the sum of the parts.

Corporate power to change and change result

The corporate power to change is the organisation’s competence level to handle several

change instruments. IBAFrame works with the following instruments:

roadmap;

change approach;

programme and project management;

knowledge management;

personal effectiveness.

Figure 3: IBAFrame for measuring, benchmarking and developing the corporate power to change


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The change instruments used by IBAFrame are on the one hand focused on solving the in

table 1 referred to causes of poor results of the organisational changes due to IT. On the other

hand the IBAFrame instruments consist of knowledge, experience and insights from different

professional fields which have proven themselves in the everyday practice. Involved

professional fields are project management, management of change and IT-auditing. Table 1

illustrates which change instrument is primarily focused on solving which cause of the poor

results of the organisational change due to IT.

Cause Change instruments to use

Lacking mutual sense of direction and

commitment (lack of leadership)

Roadmap and personal effectiveness

Incorrect change approach (incorrect

assessment of the complexity, conflicting

project management style in relation to the

development and building method)

Roadmap and change approach

No or a lack of steering of the learning

process

Change approach and knowledge

management

Too little attention for changes in the users’

and IT support work domains

Roadmap and programme and

project management

Inadequate objectives (specifications) Roadmap and programme and

project management

No instrument for measuring and

developing the corporate power to change

IBAFrame in its entirety

Table 1:Causes and change instruments to use

IBAFrame distinguishes five levels of corporate power to change (A up to and including E).

Score A means the organisation has no knowledge and experience in using IBAFrame change

instruments. Score E is the highest score. This score indicates that change is a second nature

to the organisation. Management and employees have expert knowledge in handling change

instruments. The change result is expressed on a scale of 1 to 10 and measures amongst others

whether the change:

is an improvement;

fits the objective;

coincides with the expectation;

is properly absorped.

The stronger the power to change, the better the change results. This is translated from low

benefits to high benefits and from high failure costs to low failure costs, via the two lines

representing the change results as expressed in figure 3.

Change instruments

Business innovation with IT and thus organisational change is a dynamic process and involves

a certain degree of unpredictability. The IBAFrame change instruments are instruments which

provide a guideline to handle the dynamics and unpredictability, and as such to exert a

positive influence on the changes in which IT plays an important role. The change instruments

are focusing on the use on different levels of organisation, group and individual. The change

instruments ensure alignment and connection between the changes in the IT solution and the

changes in the work domains of users and IT support employees. It links ‘hard’ and ‘soft’

objectives for the changes. The change instruments assist to determine the ‘hard’ corporate


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objectives and link derived (measurable) group and individual objectives to this. This ‘hard’

management side is amongst other things focused on measuring, handling instruments and

applying structure. This is how IBAFrame helps to build the management infrastructure.

Change instruments also involve determining the ‘soft’ objectives. This refers to creating a

mutual sense of direction, encouraging commitment, cooperation, learning processes and give

meaning. According to several literature this ‘soft’ side is closely related to leadership. At this

‘soft’ side creativity, participation and taking away resistance are involved amongst others.

This stimulates building a social infrastructure. These IBAFrame change instruments bring

the disciplines management and leadership together. Table 2 is a listing and brief description

of the change instruments.

Applying the five instruments according table 2 is not such as a tip or trick. Applying these

five instruments is supported by a sixth change instrument: the transformational competency

model. Corporate change power is embedded in the competences of involved management

and employees. Steering organisational change by means of IT is realised within an

economical, social and political environment. Managers must be able to adjust to a turbulent

environment and be able to function in a complex and changing organisational structure.4

They must use ever increasingly advanced information systems. Next, they are confronted

with different and changing standards, values and expectations. The central question is: What

is a successful manager now (and what will he be like in the future)? The modern manager

has the following characteristics:5

knowledge and information on a basic level; this refers to basic facts, relevant professional

experience and constantly being open to evolving events.

specific skills and characteristics; this includes analytical, problem solving, and social

skills, emotional resilience and proactive indication.

meta qualities; such as creativity, mental skills and a balanced learning style.

Change

instrument

IBAFrame ‘hard’ Management

objectives

IBAFrame ‘soft’

Leadership objectives

Objective and work form

focussed on

Roadmap •Determine the point of departure,

destination (corporate objective) and

the change route

•Linking the change in the IT

solution and the change in the work

domains of IT support and users of

the IT solution

•Obtain insight into the complexity of

changes by means of IT

• Creation of common view

and sense of direction

Organisation/Group

Change approach •Tune the change approach to the

complexity level

•Translate the change approach to

fitting work forms

• Ensuring the proper

atmosphere during

organisational changes by

means of IT: increase the

speed if required or

possible, offers exploration

space and a learning

environment if necessary

Organisation/Group

4 Collins, D. (1998). Organizational Change: Sociological perspectives. 5 Broek, C. van den (2002). Learning competences for the facilitation of management.


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Programme and

project

management

•Translate the corporate objective to

derived objectives and make it

SMART

•Provide the change route with

change characteristics (specifications)

and a (time) path

•Set the proper priorities (which

programmes and projects have to be

executed first)

•Ensure a controlled (fitting)

execution

•Encourage commitment

and cooperation

•Ensure the dialogue

Group/Individual

Knowledge

management

• Increase the speed of and improve

the adoption of the new IT solution

•Creating an optimal

learning environment

•Stimulating the (collective)

learning process

Group/Individual

Personal

effectiveness

•Tune the personal objective to the

corporate objective (through the

programme and project objective)

•Improve the personal (individual)

productivity

• Give meaning and offering

space within the collective

boundaries which have been

put in place with the other

change instruments

Individual

Table 2: Listing and brief description of the change instruments

Food for thought: Appearances of a group

Appearances of a group can be either a team or network. Teams focus on unity where as

networks require diversity. Some characteristics that express the differences between teams

and networks are:6

– Teams require coherence, networks autonomy;

– Teams desire privacy and seclusion, networks openness;

– Teams need a clear focus, networks need interaction;

– Teams search for similarity, networks choose expertise for different aspects;

– Teams require coordination, networks need connection.

Work forms

Business innovation and organisational change is set in motion by making use of change

instruments. This motion is created when people meet one another (virtually) and work

together in work forms. Work forms involve interaction and communication between people.

Some change instruments mainly focus on (large) groups. Other change instruments focus

more on the individuals and ensure a true embedding of the organisational (corporate)

objectives in the employees by actively involving employees and allowing them to learn

(embedded change). Work forms serve a certain interaction objective. This objective could

have a passive interaction objective with the intention to allow people to see and to allow

them to listen. With an active work form the emphasis is on participation, for example by

holding discussions or organising a workshop. Examples of work forms for use in a larger

group or team:

presentation (passive);

demonstration (passive);

workshop (active);

large scale intervention (active);

meeting (active);

brainstorm (active);

test session (active).

Work forms focused on the use in smaller groups or on individual basis are:

6 Herbert, M. (2009). Working the Network, white paper, Logica.


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discussion (active);

work group (active);

coaching (active);

reading an article (passive);

dialogue (active);

teacher/pupil construction (active);

learning by doing (active);

review (active).

The meaning of some of these work forms appears to be self-explanatory. For the

unambiguous understanding a definition related to all work forms is listed below, part of

which have been copied from the dictionary website van Dale (table 3).

Term (work form) Definition

Presentation A type of show (performance)

Demonstration Illustrating the possibilities

Workshop An event in which persons are collectively acting in

a creative manner

Large scale

intervention

A large target group who in one or several sessions

discuss, share insights into and arrive at a mutual

view

Meeting An organised meeting in order to discuss, debate or

consultation

Brainstorm Offer spontaneous ideas or suggestions in order to

solve one or several problems

Test session Testing, putting it to test

Discussion Discussion in which participants try to find a

solution of the problem by argumentation

Work group Group of persons who collectively execute a task

Coaching To give guidance to

Reading an article Examining the content of the written item

Dialogue Discussion between two persons

Teacher/pupil

construction

Work construction in which one (teacher) teaches

the other (pupil)

Learning by doing Familiarise oneself with the topic by means of

acting (practical)

Review Provide commentary on an elaborated piece (of a

document)

Table 3: Work forms and their definition

A work form must fit the objective. For example, a workshop often serves as a work form to

retrieve information on the bottlenecks related to the functioning of a department. The

management and employees of the corresponding department both participate in the same

workshop. The risk is high that not all persons will be actively involved or dare to speak

freely, which is why the workshop will only retrieve information on half the existing

bottlenecks. The final solution is now only half a solution. It is better to gather information on

the bottlenecks during dialogues, and to present this information anonymously.

By outsourcing the development, maintenance and support of IT solutions to low-wage

countries, cooperating over long distances in different time zones is increasingly becoming

more common. Often, it is not feasible to meet in physical work forms, moreover it is


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extremely inefficient. However, work forms supported by Internet applications enable virtual

meetings. Web conferencing is an example of such a work form. Solutions such as MSN also

make it possible to meet and cooperate virtually. It is expected that the use of virtual work

forms will strongly intensify in the coming years. Books and literature concerning this subject,

provide an interesting view on this different (less physical) manner of working. Apart from

the virtual aspect, the intercultural aspects play an important role in international cooperation7

as well. Cooperation will then – among other things – depend on knowing and being able to

handle the differences in habits and working styles.

Food for thought: Failed IT projects

The failure of IT projects is often determined on the basis of exceeding the delivery date

and/or the available IT project budget. However, if budget and time exceeds 10% and the

result contributes to more efficient working business processes, higher turnover or higher

margins, will we then refer to the project as a failed project? This classic approach on whether

or not a project was successful leads to a high level of narrow-mindedness in which the

projects appear to be the objective on itself instead of the means to contribute to the corporate

objective. IBAFrame uses a different approach. The term change result is the exponent with

which the result of the change by means of IT is expressed, instead of the budget and time.

Summary

This articles concerns a view on business innovation and organisational change where

information technology plays an important role. Analyses and research from different

professional fields lead to insights that offers opportunities to improve implementation and

results of organisational changes where IT plays an important role. This article is one of the

chapters of ‘Changing IT in six’.8 The principles of this article and the book have been

followed-up by a new study. The results of this study are available via:

http://www.slideshare.net/ldohmen/iba-frame-study-results-20100416

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Leon Dohmen is principal management consultant at Logica. Also he

teaches Management of Technology at the Rotterdam Business School for

Master- en MBA-programmes. He is (co-)writer of the books ‘Regie

voeren over organisatieverandering met ICT’ (2008 – Sdu), ‘Changing IT

in six’ (2010 – Koninklijke van Gorcum) and ‘Kampioen

organisatieverandering’ (2011 - Unibook).

- http://www.linkedin.com/pub/leon-dohmen/0/b24/92 -

http://www.vangorcum.nl/EN_toonBoek.asp?PublID=4552

7 Journal of International Management, Volume 11, Issue 1, March 2005, Pages 111-113. 8 Broek, C. v.d., L. Dohmen & B. van der Hooft (2011). Changing IT in six, Koninlijke van Gorcum publishers

http://www.slideshare.net/ldohmen/iba-frame-study-results-20100416

http://www.linkedin.com/pub/leon-dohmen/0/b24/92

http://www.vangorcum.nl/EN_toonBoek.asp?PublID=4552