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In the case study titled IBM Canada LTD.: Implementing Global Strategy, Peter Silvanovich must make a decision in regards to an issue with IBM Canada. IBM has made the decision to implement a global customer relationship management system (CRM) by a specified date. Although there is a given due date to implement the global CRM system, IBM Canada needs more time to make the transition from their own CRM system to the global version. Managers from IBM Canada are asking for as much as an additional six months to make the transition. Silvanovich must decide whether he should continue implementing the global CRM system by the given due date or delay the implementation. Silvanovich’s challenge in this decision is coming to a decision that satifies all parties involved. Delaying the implementation may decrease employee satisfaction because their efforts to stay on time with the implementation was not necessary. However, if Silvanovich continues with the implementation, the remainder of the employees that have not been trained to use the new CRM system may hinder the true benefits of the new system.
When changes are introduced to organizations, the proposed change is either welcomed or hostile. According Murray Dalziel and Stephen Schoonover, there are five attributes that illustrates an organizations readiness for change: history of change, clarity of expectations, owning of the idea or problem, support of top management, and compatibility with organizational goals. Given that IBM started off as an organization that primarily sold computer hardware and evolved into an organization that focuses on services and software, IBM has a successful history of change. IBM Canada has a positive track record for change as well. IBM Canada has reduced their number of local applications from 500 to about 230. With respect to clarity of expectations, it does seem as though IBM Canada is clear about what is expected from them. According to the case, the managers are well informed about the deadlines for implementing the global CRM system, but are held back because of projects that have a higher priority. It is clear that IBM Canada does not see the underlying problems with their current CRM system. To make the new global CRM system work well for IBM Canada, they require modifications to the system. Ultimately, it seems like IBM Canada are looking for a CRM system that still resembles their old CRM system.
Given that half of the managers have not begun the training process for the new CRM system, it leads me to believe that the managers at IBM Canada are not supportive. On a global scale, the new CRM system accomplishes business goals, but at the regional level, IBM Canada may not recognize that the new CRM system is compatible with their goals. As noted before, IBM Canada needs customizations to the new CRM system to allow them to continue providing services. After comparing facts from the case to the five criteria for organizational readiness for change, it seems like IBM Canada is not ready for the change that is expected.
With respect to the case and the proposed CRM implementation, IBM has several strengths, weaknesses, opportunities, and threats. The strengths and opportunities that can help IBM succeed in implementing the CRM system are its history of change and evolution, record of finding solutions for other companies, and review boards. Given that IBM has a history of successfully changing their own company image and helping other companies find solutions to their business needs, IBM Canada should have all of the necessary tools to implement the changes that are desired. Although IBM has a positive track record towards change, it does not automatically mean that the new CRM system is also welcomed. Weaknesses and threats to the implementation of the new CRM system include the organization’s size and managers. Because of the organization’s size, IBM reacts slower to customer needs when compared to a smaller organization. The needs of IBM Canada only represents one division of IBM. It would not make sense for IBM to halt a large scale change due to one division that could not implement the requested changes.
Continuing to Implement vs Delay
I recommend that Silvanovich re-evaluate why IBM Canada needs to adopt the new CRM system immediately instead of allowing IBM Canada to delay the implementation. From a global standpoint, the need for the implementation to happen is to reduce cost and increase interoperability. From IBM Canada’s perspective, their current CRM system is a more cost effective system because more employees are already using it, the system performs well, and the necessary data is already contained on the current system. Disregarding IBM Canada’s request for more time can offer mixed results. Benefits for continuing to implement the new CRM system includes reduced maintenance costs, less costs to support old systems, and attaining standardization across all branches or divisions of IBM. Although benefits for continuing to implement the change exist, there are risks to consider. Since half of the managers have not been trained to use the new CRM systems, there may be a higher cost of implementation due to training or decreased job satisfaction due to forced change. Delaying the implementation will definitely allow the managers or other staff to receive the proper training that they need, but at the same time will increase the cost of implementing the new CRM system. The changes that IBM Canada is requesting may ease the transition from the old system to the new, thus decreasing the amount of time necessary to implement the new CRM system.
Silvanovich and the managers at IBM Canada need to determine whether or not the customers of IBM Canada can be served with a standardized tool instead of a customized tool. The standardized CRM system has the potential to increase the wealth of the organization, but it may disrupt the relationship between IBM Canada and their customers. Disruptions can come in the forms of poor service support or lack of customer intimacy. Such disruptions can happen because of the lack of training by the employees and managers. IBM Canada is successful because of the current system that they have improved throughout the years of service.
To help make the decision to continue to implement the CRM system or delay the implementation, Silvanovich needs to understand what barriers are preventing the success of IBM’s strategy. The case states that IBM’s strategy between 2006 and 2010 is defined by the following objectives:
“(1)Doubling revenues from emerging market countries. (2) A focus on virtualization to drive consolidation of its server centers, resulting in US$1 billion in incremental gross profit. (3) Increased leverage of IBM’s intellectual property and its global delivery model to generate an additional 200 basis points in increased service margins. (4) A focus on improving profit margins in software.”
IBM hopes to accomplish these objectives by improving business processes which leads to the implementation of the new CRM system. On the surface it seems like people understand the need for this change, but the change has not happened yet. There are four barriers to strategy: the vision barrier, the people barrier, the resource barrier, and the management barrier.
I doubt that there is a barrier to implementing the new CRM system because the employees do not understand the overall vision of what IBM is trying to accomplish. I do believe that there are barriers due to people, resources, and management. The people are expected to implement the new CRM system, the case does not mention any forms of an incentive program to motivate all employees to train themselves about the new CRM system. Resources are also a problem because the software development and maintenance budget is not high enough to support their current applications, support the transition and maintenance of a new CRM system, and accommodate any necessary changes to the new CRM system. To increase the amount of funds available for the implementation of the new CRM system, IBM Canada should focus on decreasing the number of applications that they are using so they can decrease their support costs. While they are decreasing the number of applications that they are using, it will also help reduce their dependence on the fully customized system that they are used to. There is also a management barrier because of the lack of full support from all managers. Without the support from all managers the implementation of the new CRM system has lost its priority and urgency. an incentive program can prevent the excuse that people cannot find time to begin the training process. At the same time, creating an incentive program can help create the initial increase of people making the effort to learn the new system, but that solution serves as a crutch for a more permanent solution. Silvanovich will need to reiterate to top management personnel at IBM Canada about what tasks have top priority. The case mentions that the new CRM system is a high priority, but at IBM Canada, it does not seem like a high priority.
Another issue that prevents IBM Canada from implementing the new CRM system is their dependence on a tailored system instead of a standardized system. This issue is not entirely the fault of IBM Canada. In the past, IBM operated independently in each country. This lead to different business processes in each country IBM held operations in. Since IBM Canada has functioned in this fashion since 1917, this culture will be difficult to change. Silvanovich will need to find a solution to phase out their old system to make the transition to the new CRM system less of a threat to their individually operated culture. IBM Canada has already reduced the number of applications that they used from 500 to 230. Silvanovich can encourage IBM Canada to continue this trend by setting goals to further reduce the number of applications that are in use. As less applications are necessary to maintain the same level of performance, there will be less needs for a tailored system. This chain of actions will lead to an organization that has more agile business processes. Having too many customization requests and opting for a tailored system is not setting up the company for future changes. Since the system is so tailored to a certain type of customer at a given time, IBM Canada will be reactive to changes instead of proactive. To accomplish the reduction of applications in use, Silvanovich needs to constantly analyze and improve business processes at IBM Canada to determine what applications to remove at given times.
Although immediate implementation will reduce the cost of software development and maintenance, I believe that Silvanovich needs to grant IBM Canada’s request to delay the implementation. A main concern is that there are not enough members of the management team that are trained to use the new CRM system which will ultimately lead to poor management and failure to properly implement the new system. Second, because of the current system that IBM Canada already implemented, IBM Canada needs time to structure their own strategies around the new CRM system. IBM Canada understands their own customers better than any other division of IBM. The customers of IBM Canada cannot be treated as the same as the customers in the other regions, but at the same time, IBM Canada will not have immunity from the implementation of the new CRM system. Although the delay should be granted, IBM Canada needs to make a genuine effort to implement the new CRM system. According to the case, it seemed like IBM Canada placed low priority on the implementation. The excuse of not having enough time to attend training sessions is an inadequate excuse to justify another delay if need be. Finally, IBM Canada needs more organizational training to adapt to a more universal system instead of a fully customized system. IBM plans to use a standard system, but IBM Canada wants to add 20 different changes so it can be customized for Canadians. With so many changes to a standard system, the system is no longer standard after it is adapted for IBM Canada.
Dalziel, M. M., & Schoonover, S. C. (2005, February 05). Changing ways – a practical tool for implementing change within organizations. Retrieved from http://www.stevezuieback.com/pdf_leadership/chaningwaysleadership.pdf
Lanning, H. (2001). Planning and implementing change in organisations-a construct for managing change projects. (Penn State)Retrieved from http://citeseerx.ist.psu.edu/viewdoc/download? doi=10.1.1.137.3772&rep=rep1&type=pdf
Ruben, M. (2010). How to keep the people from crashing when the system goes live. San Francisco: Ruben Consulting Group, LTD.
Stenzel, J. (2011). Cio best practices. (Second ed.). Hoboken: John Wiley & Sons, Inc.
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