Gaining competitive advantage through organisational restructuring and ERP implementation

– Key success factors

2nd HR Round Table

The Context of Transformation for BPCL

Impending deregulation of the hydrocarbon sector

Impending deregulation of the hydrocarbon sector

RestructuringRestructuringProgrammeProgramme

RestructuringRestructuringProgrammeProgramme

Need to satisfy multiple stakeholders

Need to satisfy multiple stakeholders

Potential benefits from performance

improvements

Potential benefits from performance

improvements

Key Success Factor for Transformation

Individual Structures

Business Structures

Organizational Structures

Interpersonal Structures

Visible Change in Customer’s Experience

The Heart of any Transformation in the organizationis the Individual

At BPCL we engaged our People in the Organisation to create Compelling Vision

Workshops conducted across the Regions of the Organisation

All Top and Mid Management were involved in the Co-creation

The Vision Building workshop happened in a cascade fashion

Inputs of Govt, Financial Inst., Customers, Unions etc.

The Need for ERP emerged from the Co-created Vision

Strong and dynamic systems

To be the Best

Make people a source of

our improvement

Make BPCL a great

place to work

Make BPCL a great

place to work

Effective boundary

management

Fulfill social responsibilitie

s

Fulfill social responsibilitie

s

Apply the best

technology

Apply the best

technology

Be an ethical

company

Develop a cohesive corporate strategy

Develop a cohesive corporate strategy

Establish first class brand and corporate image

Have excellent customer caring

and customer service

Sound business

performance and

operational efficiency

The Need for ERP

The need to improve our Business Processes

Improve the speed of response and make available real time information

The need to have a single integrated information handling system

Leveraging Technology

Need for enhanced and effective managerial controls

Need for removing reconciliation due to legacy interfaced systems

What is the Magnitude of Change in the Context of ERP?

Processes Manner of Documenting Transactions Roles of users and even non-users Accountability across levels Control Mechanisms Boundaries and structure Inter-Relationships The way of thinking

The change challenges the comfort zone of individuals, teams, business units and the organisation, built over a period of time The change challenges the comfort zone of individuals, teams, business units and the organisation, built over a period of time

How did we Manage it?

Generating Energy within the OrganisationGenerating Energy within the Organisation

Creating Ownership in the OrganisationCreating Ownership in the Organisation

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Managing Transformation is about :

Generating Energy within the TeamGenerating Energy within the Team22

Generating Energy within the OrganisationGenerating Energy within the Organisation

Creating Ownership in the OrganisationCreating Ownership in the Organisation

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Generating Energy within the TeamGenerating Energy within the Team22

Generating Energy in the Organisation

Using the Tools of a Learning Organisation– Internal Coaches worked with intact teams to enhance their

individual and collective aspirations and drive change– Using tools like Personal Mastery and Mental Models to enable

end-users examine their barriers to the system– Tools like the “Ladder of Inference” helped people get unstuck

in their mind-sets and change some unproductive “Mental Models”

Imparting tools through a series of intense 3 day workshops leading to creating compelling Purpose & Vision, Identifying High Leverage Results & taking Accountability

These were conducted for all levels of staff in the organisation

Generating Energy within the OrganisationGenerating Energy within the Organisation

Creating Ownership in the OrganisationCreating Ownership in the Organisation

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Generating Energy within the TeamGenerating Energy within the Team22

Generating Energy in the Team

Top Management Support

Creating a Compelling Purpose– Workshop for Project Team members

Capability Building– Participation in National & International

Forums– Certification of internal resources– Knowledge Transfer within team

Generating Energy in the Team

Empowerment– Delegated with required authorities– Operational freedom to the team members

Team Operating Principles– All members were given equal status– Collective planning process– Knowledge based leadership

Changing Team Structures to Support Purpose

Generating Energy within the OrganisationGenerating Energy within the Organisation

Creating Ownership in the OrganisationCreating Ownership in the Organisation

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Generating Energy within the TeamGenerating Energy within the Team22

Creating Ownership in Organisation

Involvement

Enrolment

Engagement

Ownership

Communication was the key in driving involvement

Organisation was engaged through Communication at various levels

– Organisation Leadership– Process Leadership– Locations & Unit Leadership– Union Leadership– Leading Customers and Vendors

Project updates– Intranet– House Journal– Posters

Top management talks to employees at units

Involvement

Enrolment

Engagement

Ownership

Involvement

Enrolment

Engagement

Ownership

Participation in decision making drives Enrolment

Engaging Apex for the Top Level decisions and by connecting their business vision with the benefits expected from the implementation

Inviting Key stake holders of the process to workshops for deciding the to-be processes pertaining to their area of influence and control

Helping business/entity to see the connect between their Business Results and the tools provided by SAP

Constituting the Steering Committee with the Business Heads to make all the key decisions pertaining to the project

Involvement

Enrolment

Engagement

Ownership

Active engagement builds Commitment

Process Owners were relieved for 3 months to define and document the business procedures

Key stake holders were given basic SAP training to enable an understanding of the working of the system even before the product is configured

Task forces from locations and units were engaged for evolving some solutions to the process gaps

Testing of all processes by the end-user prior to its implementation in the pilot

Ownership stems for crating permanent structures post-implementation

Establish governing body constituting of Business Heads Process Forums made a permanent body for deciding on

any changes and improvement in the business processes Internal Audit has taken over the Internal Business Controls Finance Heads has taken charge of the financial processes

in SAP Infrastructure is owned by the IT set up Location Anchors are certified and trained to take charge of

SAP issues at the location Competency Centre established with core SAP expertise

Involvement

Enrolment

Engagement

Ownership

Results Achieved

On-time Project without cost-overrun Multi-Module Implementation in 6 Months Roll-out in 331 locations in a time span of 18 months Faster stabilisation of locations Implementation and ownership of Process Changes Redeployment of staff Recurring savings of Rs. 43 Crores per annum (est.) Redefined business procedures documented and in use Business Process Controls strengthened Process improvements in critical areas leading to benefits Resource of over 100 certified consultants Knowledge transferred to over 3000 users

Learnings

Do’s Change initiative has to be led from the Top

Look at it as a business process initiative not an IT initiative

Put the best people in the Organisation to do the job on full time engagement

Build Capabilities

Key stake holders to be enrolled in the Governing Body

Spend adequate time in thinking through the process

The Project has to be driven by the Organisation and not the Consultants

Learnings

Do’s Address the apprehensions of staff early in the implementation

Define clear and standardised roles

Find alternate roles for staff who are being rendered surplus as a result of the implementation/ have strategy to deal with surpluses

Identifying the Change enablers and Disablers early

Ensure that processes changes are understood and owned

Learnings

Don'ts

Take IT as the IT employees business

Implement IT without understanding the implications on the process change

Use ERP/ IT as the only tool to drive discipline/ substitute good management

Expect cheap, fast and painless implementations

Underestimate the securities and controls issues

What are the Signals of Resistance to the Transition?

Fault finding with the intended change in business process

Avoiding participating in the programmes and redesign processes

Not sponsoring resources to the project Finding constraints rather than looking for

solutions People getting stuck to their own view-points and

positions rather than the Purpose People not adhering to the commitments made

indicating lack of Sponsorship

Very often the perception of impact of change on self is much higher than what isVery often the perception of impact of change on self is much higher than what is

Stages in a Change Management Implementation

Communication Defining the new to-be processes Mapping of the change in roles Communication of the new roles to the user Training for the new roles Role based SAP training Post-training reviews Experience Sharing by locations that have gone live Retraining of users Location anchor training

We used the LO Methodology to Manage Change

Cornerstones of a Learning Organization

Aspiration:Individual

& Collective

UnderstandingComplexity &

Change

Collaboration

Personal Mastery

Shared Vision

Team LearningSystems ThinkingMental Models

Collective Aspirations are built by a Compelling Vision

Vision, Aspiration, Purpose, Meaning(What you want)

Current Reality(What you have)

Creative Tension

The Ladder of Inference

Theory:How We Think

The Ladderof Inference

Data(What people say and do)

BeliefsAssumptions

ValuesExperiences

BeliefsAssumptions

ValuesExperiences

Take Action

Draw Conclusions

Add Meaning

Select Data

Based on the work of Chris Argyris