Change Management in Jatis Solutions
Change Management in Jatis Solutions
BUSINESS ADMINISTRATION
Vol. 2, No. 7, 2013:758-772
ANALYSIS AND DEVELOPMENT OF CHANGE MANAGEMENT FRAMEWORK IN
JATIS SOLUTIONS
Dwina Febria Effendy, Jann Hidayat Tjakraatmaja and John Welly
School of Business and Management
Institut Teknologi Bandung, Indonesia
dwina@sbm‐[Link]
Abstract—The study aims to analyze change management implementation in Jatis Solutions and develop
solutions to the finding issues to mitigate obstacles and accelerate the change stick. The company wanted to
renew its business strategy and has announced it to the employees in Q4 2010. The organization was
restructured, the business process also changed according to the new strategy. Turnover ratio was increased
from 17% to 58% in 2011. A study conducted in 2012, analyzing the change implementation by comparing with
Kotter’s 8‐steps Change Management model. Realizing the change is stuck in removing obstacles and creating
short term wins steps, the interconnection business elements of the current change was measured using 7S
McKinsey to see the probable imbalance of elements which might be the core obstacles to the change. The
initiatives execution then measured using DICE methodology to understand the obstacles on winning the short
terms. Improvements to change programs are proposed by preparing readiness for change to managers and
employees motivation programs.
Keywords: Change Management, IT Delivery Service, Kotter’s 8 Leading Step of Change, 7S McKinsey, DICE
methodology
1. Introduction
Jatis Solutions is local IT Company that provides Enterprise Application Integration and Professional
Services, established in 1997. The company offers ERP, CRM, Wealth Management, Data Warehouse,
Mobile Application, and Custom Application to Enterprise in various industries such as retail,
manufacturing, and financial. In 1999, the company expands its business by opening branch offices in
Singapore, and later in Malaysia and Philippines. Then to take advantage of Indonesia’s burgeoning
cellular technology industry, in 2002 the company decided to spin‐off its mobile content provider and
mobile marketing divisions into a separate business entity, Jatis Mobile. Keeping with its principle
“constant innovation”, the company decided to become Application Infrastructure Provider, to help
multi‐industry firms get connected and collaborate with low investment cost. The idea is by
connecting all products into a complete solution and introducing a recurring business scheme, where
enterprises can use the company’s solutions through subscription arrangement instead of software
license purchasing.
The transformation began by replacing its director in August 2010 and continues with announcement
of the change in September 2010 together with restructuring the organization. The original structure
was divided by product, such as Oracle Division, Microsoft Division, Data Warehouse Division, etc (see
Figure 1). Each division has sales team and delivery team. In the new structure, the sales and delivery
team are divided in separate divisions. Sales divided by industries (vertical) and delivery divided by
product group (horizontal) as seen in Figure 2.
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Figure 1. Jatis Solutions 2009 Organization Structure
Figure 2. Jatis Solutions 2012 Organization Structure
The d
director introoduced a neew vision “w we connect businesses”
b a new mission “simplle (product),,
and
open (systems), p proven (business)”. He m made regulattion to forbid d all divisions to use the old practicee
and immediately adjust to th he new busin ness schemee. The challenge of change in the mo ost frequentt
and pprominent is the resistance to changee from all levvels: front‐line and managgers.
Rejecction can bee clearly visib
ble (explicit)) such as ressignation; or it could be
e implied (im
mplicit), and
d
slowly, such as lo oyalty to thee organization is reduced d, decreased job motivattion, increaseed errors on n
work, increased aabsenteeism, and so fortth. In early 2 2011, the com mpany has 6 61 middle managers and d
129 ffront line em
mployees. Butt a significant resignation n comes afterwards by arround 50% (ssee Table 1),,
whilee according tto Compdataa Surveys, the average tu urnover rate for technolo ogy industry in 2010 wass
16.2%% (Baress, 2011)..
Tab
ble 1. Turnover Ratio 2010‐201
11
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management in Jatis Solutions and provide recommendations to make the change successful and
stick. This study is limited within the core divisions of Jatis Solutions which consists of Sales &
Marketing, Presales & Business Development, and Professional Services Divisions (see Figure 2).
2. Business Issue Exploration
Change is something that must be done by every company in order to maintain its competitive
advantage. Pressures to change can come from environment or internal organization. Changes that
occur in Jatis is affected by the environment (market and technology), and internal (growth and
collaboration). IT industry, especially for software providers, is greatly influenced by the advancement
of technology. Back in 1960s, software is stored in a powerful computer named ‘mainframe’.
Mainframe used primarily by bank and governmental organization for critical applications such as ERP,
financial transaction processing, and customer statistics.
In the 1990’s, mainframe industries was dying due to the low cost of new Personal Computer
(PC)/server based hardware. In addition to its smaller size than mainframe, PC is more attractive with
graphical user interface. In early 2000s [Link] introduced software as a service (SaaS), a
software delivery model in which software and its associated data are hosted centrally, and accessible
by users using a thin client, normally a web browser over the Internet. With SaaS, vendor can reduce
the substantial cost of code delivery to customer, help to gain sustainable revenue with recurring‐
revenue models, potentially increase market share to the entire Internet business market with web‐
based service models. In customer focus, SaaS can reduce internal staff efforts for software
programming and maintenance, faster implementation, and reduce Total Cost of Ownership (TCO) for
application services.
Realizing the advantages of SaaS, the company decided to transform its business from traditional IT
delivery model to IT service model, inside the business strategy “collaborative commerce”, an
application platform provider that can help business partners to collaborate gaining mutual business
benefits, with recurring business scheme. However changes can’t be done by only changing the
business process, but company also need to think about the effect on the organization model includes
interconnection between organization variables so that stakeholders, especially managers, can
understand “how things work”, “what causes what” and so forth within the organization. Not less
important is the soft factors such as culture, leadership, and motivation, also affect the success of the
change. It needs guidance steps from planning, implementation, to making the change stick. Skipping
steps only creates illusion of speed and never produces a satisfying result (Kotter, 2007). After the
change was announced and implemented in 2 years, comparing with change management best
practices will be a best way to identify the unforeseen obstacles to change, and gain solutions to
accelerate the successful of change.
A. Conceptual Framework
Kotter introduced 8‐steps to lead change that help companies to understand and manage change
where each steps acknowledge principle relating to people’s response and approach to change, which
can be grouped into 5 phases. Phase 1 Planning: (1) Increasing Urgency; (2) Build the Guiding Team;
Phase 2 Enabling: (3) Get the Vision Right; Phase 3 Launching: (4) Communicate for Buy‐In; (5)
Empower Action; Phase 4 Catalyzing: (6) Create Short Term Wins; Phase 5 Maintaining: (7) Don’t Let
Up ‐ Consolidating Improvement; (8) Make Change Stick.
Change implementation cannot only rely on soft factors such as leadership and culture, the hard
factors also requires for change which affecting the successful of achieving steps in Kotter.
Measurement, communication, and interconnection of business elements will help directing the
stakeholders to meet the change goals. This study will analyze the change implementation from the
stage achievement, interconnection of the business elements, and program execution.
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Figure 3. Conceptual Framework
B. Method of Data Collection and Analysis
Since no specific change management programs, data collection where conducted three times to
analyze the change management implementation in the company. The first data collection is by
interviewing with the CEO in order to understand how the management plan and enable the change
for the company. The second data is collected by spreading a survey from current employees and
resigned middle managers that leave after the change announced to know how the company
communicate and empower the change to employees to buy‐in. For the last data collection, interview
to General Managers and selected employees are conducted to understand how the company
implement the change initiatives in order to win the change, as it requires in catalyzing and
maintaining phase.
C. Analysis of Business Situation
There are some gaps between the actual implementation and Kotter’s 8 steps best practice (see Table
2). No formal guiding team is created, thus no one feel responsible to communicate the change and
empower the employees to make action to the change. However it turns out 90% of the current
employee respondents have a will to support the change, although only 55% feel the change message
is clear. It means that the employees believe in the company vision.
Table 2. Kotter’s 8 Step of Change Practice Mapping
Step Title Theory Implementation at Jatis
Solutions
Create Needs In August 2010, all managers
Urgency 75% were gathered to gain
(Planning) company’ support from middle
s managers by communicating
managem the new strategy,
ent to organization restructure, and
support the new director that will
change lead the change.
Create Build the No formal guiding team
Guiding guiding created, management was
Coalition team expecting General Managers
(Enabling) to lead the change for each
divisions. The change
implementation was lead by
the new director.
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Figure 4. Leveel of lose self be
elonging to company factors fro
om resigned maanagers
Realizzing the channge was not communicated and conttrolled well, the CEO com me to lead thhe change inn
the eend of 2011. He re‐aligns the vision b by communiccating the change more ffrequent and d ask GMs too
create strategic initiatives that supporrt the chan nge. 20 strategic initiaatives are collected
c byy
intervviewing eachh GM becau use the proggrams often not documeented nor announced fo ormally (seee
Tablee 3). Robert WWaterman Jrr, Tom Peterrs, and Julien n Philips from
m McKinsey & Company believe thatt
organnizational efffectiveness comes from m the interaaction of se
even factors and successsful changee
requiires attentionn to the inteerconnectedn ness of the vvariables [Palmer, 2008:1 124]. For an organization
n
to opperate effecctively, eachh of the seven factors within thiss frameworkk must be aligned and d
conneected. Figure e 5 illustratess the alignmeent of the co
ompany’s straategic initiatives together with issuess
found d on several factors.
Taable 3. 20 Strategic Initiatives
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Strateegy
Build growth and productivvity strategies :
Growth:
1. Prepare new product & services
Productivity:
1. Focus only on targeted industries
2. Partnering with 3rd parrty
3. Continuous product enhhancement
System
1. Enhance prooject management tool and Structure
methodology 1. Restructuure organization, focus on industry
2. Improve stanndardization and administraative for : (sales) andd product (delivery)
a. customer acquiring 2. Aligning business units structure
b. project implementation
c. support/maintenance Need to connsider to raise the structure level of
d. Product Shared Values
V PMO divisioon
Need to strenggthen employee engagemennt and SPORTIF (Smart, Professsional, Organization for
retention progrrams learning, Result oriented, Teamwork,
T Integrity , Fun
and Openness
Styyle
Figure 5. Strategic Initiative A
Alignment to 7SS McKinsey
Strateegic initiativve plans mayy not be su uccessful if tthe implemeentation is not
n producin ng expected d
resultts, either beecause the obstacles
o aree not identiffied and evaaluated, or id
dentified bu
ut cannot bee
overccome. Thesee strategic initiative proggrams will bee the short term t wins to
o meet and celebrate to o
motivvate people supporting the change as required on Kotte er’s step 6.. DICE meassurement iss
conducted to the e 20 strategic initiatives to know thee successful probability and a highest obstacles in n
the eexecution. Figgure 6 illustrrates the meeasurement result: only 4 of 20 or 2 20% program ms are in thee
Win ZZone. The biggest
b threaat is C1 or top level com
mmitment (ssee Table 4)). Lack of resources and d
changging priorityy of top levvel support became thee most com mmon issues. Several prrograms aree
postpponed becau use team ressigned and no n replacem ment, or simp ply because the top leveel shift theirr
focuss to another important isssue.
Figu
ure 6. DICE Scorre Diagram of Sttrategic Initiativves Programs
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Table 4. DICE Measurement Result of Strategic Initiatives Program 2012
Program DICE Scores Tot Actual
Number al Outcom
DIC es
E
D I C C E
1 2
1 2 3 3 2 1 17 20%
Postpon
ed
2 4 4 4 3 3 26 0%
Postpon
ed
3 2 3 3 2 2 18 20%
Postpon
ed
4 4 3 3 2 2 20 20%
5 2 3 3 2 1 17 40%
6 2 3 3 2 1 17 20%
Postpon
ed
7 2 3 3 2 2 18 100%
8 3 3 3 2 1 18 0%
Postpon
ed
9 3 2 3 2 3 18 70%
10 1 3 3 2 4 17 60%
11 1 1 1 2 2 9 70%
12 1 3 3 2 1 17 20%
Postpon
ed
13 2 3 3 2 1 17 60%
14 1 2 2 1 1 11 100%
15 2 1 2 3 3 14 70%
16 4 3 3 2 1 19 20%
17 4 3 3 2 1 19 20%
18 4 3 4 2 2 22 0%
Postpon
ed
19 1 1 1 2 1 8 100%
20 1 1 1 2 3 10 100%
Total Each 4 5 5 4 3
Elements 6 1 4 1 6
Total Actual Outcome Percentage for Q1 45.5%
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3. Bu
usiness Solu
ution
Lookiing at the situation in Jaatis, several issues can be
b found onn each changge stage (see Figure 7,)..
Thesee issues mayy happen beccause the company is nott separating between iniitiatives that support thee
changge and stand dard work programs.
p Noo formal guiiding team cause
c no people feel responsible too
makee sure the change is on trrack and build the changee culture. To overcome th he finding isssues, severall
solutions are prop posed on Tab ble 5.
Figure 7. Change Managgement Problem
m Map
Table 5. Propossed Solutions
No Sollution Proposed Activities & Expeccted
Outcome
1 Leaadership Proposed Activities
andd CEO to o assign form
mally manageers
readiness who w will be the guuiding team aand
for change responsible for en nsuring that
changges are sustained
CEO to o persistently guiding thee
managgers to be aggent of changge
capab ble of leadingg and
facilitaating the transformation n
Contin nuous leaderrship and
regeneration proggram for
managgers and employees
Managers to build d a culture off
coopeeration/collegiality
o Team work
T
o Reflective pra
R actice
o Continual imp
C provement aand
leearning
o Responsivene
R ess to changee
Expected Outcome
Same urgency leve el amongs thhe
managgement and managers
Formeed a strong in ntegrity and
comm mitment guidiing team
Formeed a leadersh hip and
regeneeration cultu ure
2 Deffining Proposed Activities
orgganization Managers to devvelop clear
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interventions strategic initiatives and define
detail activities/procedures to
be done by the staff
Managers to acquire and make
it available the required
resources and infrastructure to
support the change
Managers to review and/or
revise policies and procedures
as required for work activities
that need specific action
requirements due to this
organizational change
Managers to do regular review
of the strategic initiatives by
using DICE tools to prevent and
overcome any obstacle that
may interfere the
implementation
Expected Outcome
Obstacles towards the change
are reviewed and prevented
Formulate well planned strategic
initiatives.
Strategic initiatives are treated as
projects, with clear target
outcome, documentation, and
procedures/activities.
3 Clarity of Proposed Activities
purpose Manager to conduct intense
periods of staff consultation to
establish the sense of purpose
and urgency established and
recognized the stages of change
CEO to inspire Managers and
staff to move, make the needs
for real change
Expected Outcome
Same urgency level among the
employees
4 Strategic Proposed Activities
initiative Managers to conduct regular
alignment alignment with both CEO and
staff. Develop a communication
plan and regular meeting with
the staff. Exchange regular and
up to date information about the
transformation in a pro active
and open manner
Managers to conduct
comprehensive assessment on
any resistance and obstacle for
the change
HR to synergize strategic
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initiatives to manager’s KPI
Expected Outcome
Same understanding of the
change message among the
management, managers, and
employees
Formally reviewing the initiatives
to sense any resistance and
obstacle.
5 Connectedness Proposed Activities
Overcome resistance to change,
identify and promote
relationship among division,
encourages matching of
individuals
Connect people to each other
through shared experience,
strengthened relationships,
shared a common purpose, and
storytelling in an informal way of
conversations.
Expected Outcome
Continuous removing obstacles
Reduce employee resistance to
the transformation
6 Quick wins Proposed Activities
Prioritize initiatives; develop
short term realistic milestone or
interim goals
Make appropriate celebration on
any milestone achievement
Expected Outcome
Encourage quick wins action and
implementation
Encourage employee motivation
towards the success of the
transformation
7 Consolidating Proposed Activities
performance Continually monitoring plan,
improvement implement, review, and improve
cycle
o Work process improvement
o Staff development to create
a cultural responsiveness
o Review achievement
regularly
o Mitigation resistance factor
Consider the development of a
retention strategy for key
personnel if risk of losing them is
high
Consider implementation of
appropriate rewards and
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recognition for key contributors
Expected Outcome
Employee engagement and
retention program is built.
Higher employee morale
8 Stengthen the Proposed Activities
company’s HR to re‐promote corporate
culture culture (SPORTIF) to all
employees and managers
HR to create continuous building
culture programs with interesting
rewards and recognition.
HR to align corporate culture
with management practices and
KPI
Expected Outcome
Company’s culture value become
shared value
Higher employee morale
4. Conclusion and Implementation Plan
Based on the analysis, the most crucial issues of change management in Jatis Solutions that make the
implementation unaligned were the different level of urgency within the organization, lack of change
agent skills, and weak support from HR in building the formal change management [Link]
change implementation must be developed by strengthening the readiness to change is strong in top
level such as re‐alignment of the urgency in managerial level, prepare change agent skills and build a
formal change management program together with HR. Then the company should work the change
together with front line employees, increase the employees’ motivation, and synergize the new
culture and change management programs to performance indicator to make the change stick. Table
6 illustrates the proposed implementation plan start from Q2 2013.
Table 6. Proposed Implementation Plan 2013
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and staff
Oct Consolidating Managers and HR
performance HR
improvement
Strengthen the HR HR
company’s
culture
.
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