PDM and Change Management


The Change Strategy

Once the 'as-is' state and the 'to-be' states have been defined, a change strategy can be developed to go from the 'as-is' state to the 'to-be' state.

There are two types of change strategy - incremental and transformational. PDM can be implemented with either approach, or with a mixture of the two. Unless it's clear which approach is to be used, the implementation will fall between two stools.

Incremental change doesn't challenge existing assumptions and culture. It doesn't modify the existing organization. It uses existing structures and processes; it causes little disruption; it's relatively low risk; it's slow and it may not produce enough change.

On the other hand, transformational change changes existing structures, the existing organization and the existing culture. It's relatively high risk. It's fast and focuses on major breakthroughs.

Incremental change is aimed at making many small-scale improvements to current business processes. It focuses on small-scale improvements because experience shows the likelihood of succeeding with a small-scale improvement is much higher than of succeeding with a large-scale, 'strategic' improvement project. Incremental introduction of PDM is usually carried out at the task or department level under the overall control of the department manager. In incremental change, the participants do not need or want top management involvement, which they see as a hindrance that will slow them down and prevent them making progress.

It's usually difficult to develop a true business case for PDM under the incremental approach. From the viewpoint of the overall business, the expected improvement is small-scale, almost invisible, and difficult to measure. Yet top management often requires attempts to be made to cost-justify the improvement. To receive funding, over-optimistic and highly imaginative figures will be produced to show how payback and ROI criteria can be met. Often these can not be met with the result that it appears that the implementation of PDM has been a failure.

Reengineering is an example of transformational improvement. It involves radically rethinking and redesigning a major business process with the objective of achieving large-scale improvements in overall business performance quickly - and the product development process is a prime target. Product development runs across many of the traditional business functions, and has a high degree of customer and/or supplier involvement.

Reengineering involves redesign of a company's workflow and application of Information Technology to the new workflow with the aim of obtaining competitive advantage. To achieve this kind of breakthrough requires major change to processes, organizational structure and management methods.

Re-engineering aims to optimize the major business processes of a company. Its objective is to make very large improvements in customer service metrics (e.g. reduction of 75% in product development time). The end result of improved business performance is very visible, so very easy to measure. As a result a well-defined business case can be developed for PDM under a reengineering approach.

Re-engineering fundamentally changes the way a company works - which is why it is so difficult. It changes the way processes fit together, changes the way people work, and changes the way systems fit together. It's hard work. Typical activities include rewriting job descriptions, inventing new recognition and reward systems, implementing new computer systems, retraining, changing financial reporting, and changing relationships with suppliers.

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Page last modified on March 16, 2000
Copyright 1999, 2000 by John Stark