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Asse ssin g th e n e ce ssity of e n te rprise ch an ge :
pre-feasibility and feasibility studies in
e n te rprise in te grationGREGORY UPPINGTON and PETER BERNUS
Abstract. The article presents a process model of the least
ormalized phase of enterprise change, in which managem ent
and all other interested parties identify a need for change,
assess what change me thodology is adequate to handle that
h an ge an d make p reparation s for en actin g th at ch an ge
p roc e ss. T h is p roc e ss i s i n te n de d t o b e e m be d d e d i n a
om p l e t e e n t e r p r is e e n g i n e e r i n g/ en terp rise in t egrationmeth od ology. Th e aim h as b een to give a mo re d etailed
account of the first phase of e nterprise integration, called the
identification phase of the enterprise life-cycle. A top level of
he methodologys process is presente d as a series of IDEF0
diagrams and their companion explanations, although future
versions may be developed in more elaborate languages (e.g.
CIMOSA modelling constructs) . The original aim to develop
h is p art o f th e meth od ology was fo r the meth od to b e
specially suitable for the service industry; it has be en found
hat there was no need to be service industry specific on this
evel and that considerations applied e qually to service and
manufacturing.
1. Introduc tion
I nit ial p lan n i n g p h a se s o f an y c h an g e m a n ag e -
m e n t p ro ce ss ar e g re at ly e n h an c ed with so lid
founda ti ons and i dentification of whe ther cha nge i s
necessary, what is to change, a clear method showing
how and where cha ng e wi ll occur and the potenti al
e ffe c ts o f su c h c h an g e ( Min k et a l . 19 93 , H an d y
985) . Resulting from the identification that change
can benefit an enterprise or tha t cha ng e i s necessary
for the en terprise to retain its compe titive advantage,
h e c h oic e o f th e tr an sitio n m e th od is th e o n e
management often finds to be the most difficult. It is
h i s c h o i ce wh i ch wil l o ft e n d e te r m in e th e fu tu r e
uccess of an en terprise.
T o u ndersta nd the selection process of a cha ng e
methodology for an enterprise within a certain industry
se c to r e n t ails th e c o nsid e r ati on o f a n u m b e r o
conce rns in two areas. First: tacit n otions, con cepts
requi reme nts a nd i deal s of the chang e methodolog y
Second: the target enterprise, the necessity for change
and the strategic management process of such change
The following paper indicates those considerations
m a n ag e m e n t wil l f ac e wh e n d isc u ss in g o r e n a c tin g
o r ga n iz at io n a l c h an g e . T h e i n fo rm a ti on c o n ta in e d
within this pape r is ge ne ric across indu stry sectors, with
certain required contextual alterations and is consid
ered to be applicable to any change effort. The text is
organized to rep resen t what activities will occur at each
stage of the change process from the initial discus
sion of the validity and viability of change to the finaldecision and `sign-off to e nlist the most appropriate
organizational change methodology and implement the
change process. The paper is aimed at establishing an
organizational process model. The model will allow for
`an integrated information, manufacturing [ or service]
an d h u m a n r e lati on s ar c h it e ct u re o p e r at in g as an
overall systems responsive to the human and economic
environment at all levels (Williams 1994a). This model
d r aws p r e d o m i n an t ly u p o n th e P u rd u e En t e r pr ise
Refere nce Architecture ( PERA) ( Williams 1994b) with
wh i c h m a n ag e r s c an se l e c t o r c o m b in e in d i vid u a
me thods a s proposed in the li terature. Furthermore
the model is presented in such a way that the procedure
doesnt become prescriptive or overwhe lming. For thi
we ha ve selected a functi ona l representation of the
processes i nvolved, whe reupon i t i s a t the strategi c
managers discretion in which succession the described
a ct ivi ti e s ar e p e r f or m e d as l on g as t h e i r l og ic a
connections are respected.
As such, this paper develops the processes/ activitiesthat ma na gem ent can foll ow to i dentify the busi ness
NT. J. CO MPUTER INTEGRATED MANUFACTURING, 1998, VO L. 11, NO . 5, 430 447
0951-192X/ 98 $12.00 1998 Taylor & Francis Ltd
Authors: Gregory Uppington and Peter Bernu s, Griffith University, School of
Computing and Information Technology, Nathan 4111, QLD, Australia.
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entity that needs change and to identify the nature ofchang e. In PERA a nd GERAM ( Bernus a nd Nemes
996) this phase is called the `Identification Laye r of
he enterprise l ife-cycl e. Requi rements of this l ayer
phase) have been formulated based on the `Guide to
Master Planning for Enterprise Ingetration ( EI) Pro-
g ram m e s o r ` Pu r d u e Gu i de fo r sh o r t ( s e c . 2 ,
Wi ll iam s 1 9 94 a) . T he a udience for this pa per rang es
from the CEO to the Techn ical Specialist ( in-house or
c o n su lt an t ) : t h ose s tak e h o ld e r s wh o wil l b e m a jo r
pla yers in the cha nge me thodolog y are identi fi ed by
h e i r r o le i n th e c h an g e p r oc e ss ( s u ch as In i tiati n g
Sponsor, Project Champion, Feasibility Study Investiga-
ory Team, and EI Steering Committee members).
T h e P u rd u e Gu id e assu m e s th at t h e ` In itiati n g
Sponsor and ` Project C hampi on tog ether ha ve a ll
nformation available to start a master planning process,
he refore no so-called as-is analysis is ne ede d in this
nitial phase of enterprise integration.
Other methodologies, e.g. GRAI-GIM (Doumeingts
et al. 1995) assume that the direction of change needs to
b e d e t e rm i n e d as p ar t o f t h e m e t h od o lo g ic al ste p s,
using an as-is analysis step.
Al thoug h these two methodolog ies a re seemi ng lycontradictory from th is regard, we h ave gen eralized and
d e tail e d a m e t h od o lo gy fo r t he i n it ial p h ase o f EI
h erein presen ted) thereby extending its applicability
o si tuations where the di rection of cha ng e must be
determine d, to justify the p roposed change to comp any
m a n ag e m e n t ( o r th a t m a n ag e m e n t c an ju st if y t h is
change for themselves).
In the l ig ht of the me thodolog y presented i n this
paper the me thodolog ical steps of the Purdue Guide
and those of GRAI-GIM are suitably spec ialized cases,
and are by no mea ns i n contradi ction i n phi losophy.
Thus, interpreted in the context of the here presentedchange assessmen t m ethodology the respective initia
ph ases of the Purdue Guide and of GRAI-GIM can ( and
are) plugged -in at suitable points (in fact selected by
the change initiating personnel).
T he Purdue Enterprise Reference Architecture, a
detailed Enterprise Enginee ring me thodology calls the
top enterprise l ife-cycle the `identification phase or
layer (the terms layer and phase are used interchange
a bl y i n this arti cl e i n whi ch a n E nterprise B usi nes
Entity (EBE) is appropriately iden tified as the target for
change (see figure 1, A1: Identify EBE) .1
The me thodology detailed here in investigates the
validity and viability of the intend ed change proce ss for
t h e o r gan i zat io n to e n s ur e th a t i t m a in t ain s i ts
c o m p e titi ve ad van t ag e b o th d u ri n g an d af te r t h e
change process. Section 2 `EBE Identification Pre
Feasibility Study, outline s the initial ide ntification of
the benefi ts of an enterprise integ ration programm e
the process of identification of the EBE, and the proce s
of gaining manageme nt com mitmen t for the successive
`EBE Identification Feasibility Study (figure 2).
Assessing the n ecessity of enterprise chan ge 43 1
Figure 1. The three stage process of Master Plan development (EBE Identification is shown as the first stage) . ( IS: Initiating
Sponsor, PC: Project Champ ion, FSIT: Feasibility Study Investigatory Te am) .
1It is not predetermined what should be the size and extent of an EBE; it can
be the en tire o rganisation or any part of it that manageme nt want to consider a
a coope rating but autonomous u nit. Typically, an EBE may be a whole busines
unit responsible for a type of product, product group or service. This busines
unit m ay be situated at a given location, or distributed within a region or world
wide. The best way to delineate the EBE is by considering the service the EBE
gives to the market. All activities which are considered by management to be
core (strategic) activities in the provision of the above service are ideall
handled within the EBE. Other activities which are not core are either done in
separate EBEs of the same enterprise or are performed by outside contractors
In this way an en terprise of any size can be considered an EBE, comprehe nsively
managing all activities that are needed in the value chain of its products, and
which activities are carried out in inter-enterprise or intra-enterprise coopera
tion (be twee n EBEs).
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Section 3 `EBE Identification Feasibility Study
util ises the i nformation a nd findi ngs from the Pre-
Feasibility Study ( PFS). This section covers the EBE
en vironm en tal analysis ( subjective analysis), the EBE
corporate appraisal ( objective analysis), and an EBE
TO-BE scenario formulation ( the initial EBE vision)
and evaluation via a Feasibility Study (FS) to determine
he viability and validity of th is scen ario. Furthe rmor e,
g uidel ines for the Ma ster Planni ng process a re pro-
posed and an EI Planning Team (PT) is formed.
The identification phase of the enterprise life-cycle
s compl eted with the esta bl ishme nt of the i nitia l E I
program m e (this latter is not discussed in d etail in the
present paper) .
T h e m e t h o d olo gy h a s b e e n t rie d in its n e w f o rm
on two case stu die s. O n e in th e Glo be m an 2 1
consorti um (of w hi ch the resul ts a re at the mome nt
propri eta ry ma teria l) , a nd the second i nvol ves the
ervi ce industry a ppl ied to a smal l propri etary e n-
erprise whe re it transpired the me thodology helpedd e n tif y a n e w b u sin e s s i n th e fie l d o f to u rism in
e m o te Au st ra lia an d was ab le t o e f fic ie n t ly h e l p
formulate the basic busine ss strategy as well as guide
nformation g athering for the esta bl ishment of the
business in a very efficient manner (the time schedule
ook approximately three weeks).
2. EBE id en tification pre-fe asibility study
Given the increasing size and complexity of modern
organi sa ti ons, i t i s becomi ng more importa nt to pay
particular attention to the initial stages of any strategy
formation (Mink et al. 1993, Handy 1985). This is often
considered part of the project concep tion or initiation
phase and forms the foundation for proceed ing events
W ithi n the enterprise i nteg ration fra mework there
exists a n ee d to in ve stigate the validity and viability of
the inten ded change process to m aintain compe titive
advan tage both du ring and after the EI process. For the
p u r po se o f t h i s p ap e r , w e h a ve b ro ke n t he p r oje c
initiation phase into two major compon en ts: the Pre
Feasibility Study ( PFS) and the Feasibility Study ( FS). I
i s im p o r tan t t o r e c og n iz e t hat th e s e p r o ce sse s ar e
essentially differen t and equ ally important. This section
d e a ls wi th t h e f ir st o f t h e se p r oc e ss e s t h e P re
Fe asibility Stud y.
In small projects, many of the activities outlined
he re m ay be un dertaken as part of the Feasibility study
However, for large and complex organizations ( e.g. a
multinational hotel chain) it is essential that the value
of the intende d p rocess be establishe d be fore resourcesare allocated to more costly exercises l ike feasibility
studies. As a consequence, the PFS outli ned i n this
pa per i s pri maril y undertaken to i nitiate the proces
and to establish its likely contribution to the organiza
tions com pe titive advantage.
The pre-feasibility study is carried out to d eterm ine
The organisations current status qu o ( h o w i t i scurrently ope rating i n terms of ma rket forces
competitive position, etc.).
W hether there i s a need for the org a ni za ti on tounderg o a cha ng e process.
G. Uppin gton an d P. Bern us43 2
Figure 2. The three stage process of Enterprise Business Entity (EBE) Identification.
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Whether there is a viable opportunity within theorganization to successfully implem ent a change
process.
T h e o bje c tive s an d r e so ur ce s o f th e c h an g eprocess.
How to be st achieve successful ben efits from thischang e process by wa y of ex a mi ning the a ppro-
priate change me thodologies, and
Whe re the most appropriate change me thodologycould be en acted within the organization.
T he a ctivi ti es de scribed here are not one-off, or
project l ike: company management continuously keep
performing such assessments as listed here. Many ideas
of possible change will progress to some stage, only to
be shelved or stopped altogether, and only some will
mature to the stage of implementation. Thus manage-
m e n t p e r fo rm s c h an g e m a n ag e m e n t u n d e r t he in f lu -
e n c e o f p r ese n t e n vi ro n m e n tal fac to rs an d in th e
awareness of past change histories of the company orcase studies of other companies.
2.1. Depth of AS-IS an alysis
Both the pre -feasibility study an d feasibility study
conduct analyses which would be termed by literature
an `AS-IS analysis. Both such an alyses are, howeve r,
imited to the pragmatic ne eds of the subseque nt ph ase
of the change process and of the personnel involved.
The re are m any debates about the pros and cons of
cond ucting an AS-IS analysis prior to the designin g of a
f u tu r e T O -B E s ce n a r io ( H an d y 1 9 85 ) . T h e vi e w
a dopted i n thi s pa per i s tha t for a ny ma na g er to a ct
o n th e c u rr e n t situ at io n o f t h e e n t e rp r ise , it is
ma nda tory to ha ve a n understandi ng of the current
tate of affairs ( Rolstadas 1995) . However, any AS-IS
an a l ys is t h a t i s i n c o r p o ra te d wi th i n t h i s d e t a il e d
me thodology is pragm atically drive n only that dep th
of AS-IS analysis is perform ed `up-front of which the
esul t i s necessa ry to take i nformed deci sions i n the
chang e process. C lea rly therefore the need to under-
ake analysis is not objectively determined but rather isd e p e n d e n t o n t h e n e e d o f t h e i n v o l v e d m a n a g e m e n t
an d te c h n ic al p e r so n n e l to u n d e r stan d t h e p r e se n t
ituation of the enterprise.
Note also, that the AS-IS analysis for the identifica-
i on of the na ture a nd pl ace of cha ng e i s disti nctly
different from AS-IS analysis unde rtaken later in the
change process, after the new planned TO-BE state of
he enterprise has been designed. This latter is carried
out for the sake o f transition plann ing ( such as analysis
s, fo r e x am p le , p r op o se d in th e P u rd u e Gu id e fo r
Master Planning).
As a co nsequ en ce, the following five-stage proce s
constitutes the PFS (see A11, figure 3).
Investigate Project ( A111) . Examine EI Methodologies (A112). Conduc t PFS ( Rapid Analysis) ( A113) . Determ ine Viability of Undertaking EI (A114)
an d
Seek Final App roval for Specific EBE FeasibilityStudy (A115).
2.2. Investigate Project (A111)
The main und erlying purpose of `A111 Investigate
P ro je c t i s fo r an I n it iat in g S po n so r an d P ro je c t
C h am p i on ( s e e b e lo w) to d e t e rm i n e th e e n t e rp r ise
integration activity will contribute to the organizations
com pe titive advantage.
This investigation involves the identification (or selfi dentification) of a Project C ham pi on (PC ) and an
Initiating Sponsor ( IS) who respectively are personnel
who tog ether2
are abl e to recog nize when strategi c
c h an g e is r e qu ir e d an d in stig at e t he c h an g e p ro
gramme. The IS sponsors the first steps (PFS and FS)
o f th e ch an ge e ffort an d is assu m e d to b e in a
management position who has a vision for the future
The se pe rsonn el m ust have an initial unde rstanding o
the organization, and have certain abilities and knowl
edge to discuss issues such as those regarding technical
and hum an processes, organizational ch ange processes
and econom ic considerations.
Within this activity, the value ( ne cessity) of un der
taking change within the organization is identified, i.e
the IS and PC will investigate the perceived nee d for
c h an g e in th e e n te r pr ise . T h is p e rc e ive d n e e d fo r
change is to be aligned with the organizations strategy
for gaining or retaining competitive advantage. The IS
and PC identify at a high level the nature of the change
they see as required within the enterprise, by looking at
busin ess goals, performan ce in dicators (Lucertini et al. 1995)
current strategic reports, internal business audits, e tc. A list of
prop erties one might wish the En terprise to have m ay beformulated ( a high leve l vision) , with initial ideas of how
to achieve those properties questioning how can value
be a dded to current busi ness processes (M oseng a nd
Bredrup 1993 in Rolstadas 1995) .
Given this high level vision, the IS and PC identify
an d se l ec t fr om t he p o ssib le fo rm a l an d in fo r m a
Assessing the n ecessity of enterprise chan ge 43 3
2The description is to be interpreted with the understanding that in a company
many sponsors/ c h am p i o n s m a y o p e r ate a t a n y o n e tim e ; we d e sc r ib e th
process of change from the point of view of one of these.
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ava il abl e me thodolog ies for ma na g ing chang e pro-
c e sse s. Th e valu e o f an EI p ro gr am m e sh o u ld b e
eaffi rmed throug h compari son wi th other cha ng e
o bje c ti ve s . T h e IS an d P C p r op o se an d se l e ct th e
m o st ap p ro p ria te m e th o d to c on tr ol th e c h an g e
p r oc e ss wi th in th e o rg an i zatio n in th e c o n te x t o f
h e e n t ir e e n t e rp r ise , n o t ju st at a lo c al le ve l . It is
m p o rtan t to h ar m on ize th e EI p r oc e ss with th e
general strategic cycles of management review so that
he EI activities are conducive to the organizational
mi ssion, vi si ons and val ues and al so to the current
positioning within the industry sector and competitive
market.
The usual type of decision that ne eds to be taken at
hi s poi nt i s whe ther the type of cha ng e percei ved a s
nece ssary is of increm ental nature ( i.e. has local effect
only in which case the change falls into the realm of
conti nuous i mprovem ent a nd a correspondi ng metho-
dology could be followed) or is strategic in nature (inwh i ch c ase th e c h an g e p r oc e ss c o uld fo llo w a n EI
programme methodology).
2.3. Examin e EI methodologies (A11 2)
T hi s a ctivi ty i denti fi es the g eneri c benefits that
enterprise integration can bring to an organization and
hould be und ertaken in light of en terprise integration
tandards and within the context of how the organiza-
ion is expected to react to such change.
First it is necessary to study the EI methodologies
the ir cen tral and gen eric be ne fits ide ntifying up -to-date
EI guideline s and standards. Second, it is ne cessary to
identify those ben efits that enterprise integration can
provide for the specific organization compared to what
the IS and PC propose en terprise integration to prov ide
for the organization.
Naturally following is the development of an action
plan for a PFS ( specifically the Rapid Analysis) which
indicates:
the purpose of the PFS in the particularenterprise, i .e. what it should examine;
the required rersources for the PFS; the required levels of com mitments for the PFS; the continuing PFS schedule.
T hi s a cti on pl a n onl y needs to be a g reed upon by
the IS a nd PC w ithout w ide circulation of this pla nbecause the l evel of uncertai nty about the need a nd
discretion of change is still very high.
2.4. Conduct rapid analysis (A113)
The rapid analysis compon en t concern s three main
objectives.
The first objective comprises a h igh level review of
the current sta tus of the organi zati on (AS-IS). T hi
i nformation that shoul d be readi ly a vai labl e i n the
G. Uppin gton an d P. Bern us43 4
Figure 3. The Compone nts of a Pre-Feasibility Study.
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organization. Within this activity, the IS and PC review
h e c u rr e n t b u si n e ss an d m a rk e ti n g s tr at e g ie s t o
eaffirm how the organization curren tly ope rates within
h e c om p e titive m a rk e t an d wh at is i ts c u rr e n t
competitive position. A brief SWOT analysis ( Dealty
992, H ill and Westbrook 1997) of the organization is
c o n d u c te d t o d e t e r m in e a n y si gn i fic an t p o te n t ial
mpacts or oppor tunities within this market with respe ct
o the high level vision and concrete objectives of EI in
he selected EBS.3
The industry expectations (trends)
are also reviewed to ascertain organizational direction.
T he IS an d PC n o w n e e d to d elin e ate th e
Performance Indicators ( PI) for the organization and
for the given industry sector, these help the recognition
of the Performance Drivers ( PD) for the organization
a nd i ndustry sector). (T he performa nce drivers can
oosely be linked to determine Critical Success Factors
for the organization).
The second objective is to establish the direction of
en terprise integration within th e co ntext of the organiza-ion ( A1132) . This is done by ide ntifying the EBEs of the
organization, and potential opp ortunities that m ay be
exploited by managem en t through EI activities.
T h is will sh o w t h e IS an d PC wh e r e th e r e al
boundaries of the organi za ti on a re ( a s there ma y be
EBEs in th e valu e c h ain wh i c h ar e e x te r n al to th e
organization), and define the extent and scope of EBEs
o p e r at in g wi th i n t h e o r gan i za ti on ( a s we l l a s th e
nta ngi ble l inks and constructs between E BEs). T he
cope of a n EB E ma y be i denti fied by looki ng at the
prod ucts of an EBE and re late d activities in a m atrix form .
The actual values of the earlier determined perfor-
ma nce indi cators a nd performa nce drivers for ea ch
EBE are also reviewed, i.e. the measures that allow the
assessme nt of the curren t position of the EBE within the
g ive n e n t e rp r ise an d e n vir o n m e n t ( L u c e rtin i et al .
99 5 ), and the underl yi ng mea sures tha t determi ne
he performance of the EBE. This allows management
o elicit those activities which are of prime importance
n the fulfil lmen t of the orga nizationa l mi ssion (i n
other words, m a nag eme nt wi ll ma ke ex pl ici t the key
ssues that nee d solution in the EI process).
As each EBE is designed to contribute to the wholeof the organizational mission, the IS and PC review the
trategic direction and operating policies for each EBE
o determine whether the EBEs are actually operating
conduci vel y to the current orga ni zationa l mi si son,
vision and value s. From the above information and
knowl edg e, the IS and PC shal l be a bl e to obta in a
picture of the organizations current performance and
se e h o w it r e late s to th e p ote n tial b e n e fits o f an
en terprise integration programm e. The assessment o
the EBEs may include (without a detailed analysis, i.e
purel y based on the present understandi ng of the IS
and PC) the notion of maturity (Paulk et al. 1 9 93 ) .
The third objective for this section is to prepare a
report outl ini ng the Ra pid Ana lysis f indi ngs ( from
A1131 and A1132) with refere nce to the be ne fits EI can
bring to the organization (A1133).
The Rapid Analysis Report is prepared for upper
l evel ma na gem ent revi ew. T his report i s de sig ned to
enh a nce the compl etene ss of current strateg i c docu
m en tation. It collates all m aterial and find ings into on e
docum ent and indicates the following information.
How the organi zati on i s currently performi ngwithin the given industry sector.
What drives the performance of the organization Wh a t ar e t he c u rr e n t b u sin e s s a n d m a r ke ti ng
strategies. What are the expected industry trends. A list of the organizations EBEs. The performance indicators and drivers for each
EBE, the organization as a whole and the industry
sector.
The perce ived maturity of the EBS. The existing strategic direction and encompassing
policies for each identified EBE.
The Rapid Analysis Report will indicate to manage
m e n t t h e c u r re n t s ta tu s o f th e o r gan i zati on , t h e
e x p ec te d fu tu re tr en d s ( wh ic h will n e e d to b e
addressed) , and if there are any EBEs which are either
not p erforming well. ha v e the potenti a l to perform better (economi c
ally an d ope rationally) .
have deviated from their original mission (identified with a devi ation from contributi ng to the
organizational mission) consequen tly requiring
change (including the formation of new EBEs).
The main theme of this analysis is for the IS and PCto review the organizations performance subjectively
and to then contrast their p ercep tions with objective
information such as the performance indicators.
2.5. Determine viability of undertaking EI feasibility study
(A114)
For an enterprise integration project to be success
fu lly im p le m e n te d , t he r e m u st b e c o n se n su s an d
com m itme nt from all intere sted stakeh olders. However
Assessing the n ecessity of enterprise chan ge 43 5
We stress that a SWOT analysis should always be relative to th e i n te n d e d
oncrete objectives without these SWOT analysis is a pointless activity.
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as the leve l of investigation described in sec. 2 is mainly
exploratory (fact-finding) , the em phasis of the present
activity (A114) is to de term ine the viability of en tering
he ne xt p hase the feasibility study.
This activity is therefore conducted by the IS and
PC, still at a h igh level, de termining the direction for
h e e n s uin g FS, b ase d o n th e r e su l ts o f th e Rap i d
Ana lysis whi ch determi nes those EB Es whi ch offer
opportunities for improvement through the EI process.
T h is s tag e wi ll g ive d ir e c ti on f or th e FS an d wil l
determine nece ssary funding levels, resource comm it-
ments a nd schedul es.
The IS and PC review the findings from the Rapid
An a lys is ( wh i c h i s t h e h e a rt o f t h e P FS ) h a vi n g
ex am ined E I methodologi es ( A1 12 ) a nd the benefits
of EI, possible or con crete EI objectives and goals for
he org ani za ti on, etc. T he l ist of potenti al EB Es i s
n ve st ig ate d to d e c id e wh e t h e r th e r e is an EB E o n
wh ic h an EI p roc e ss is to b e c on d uc te d an d to
determine the most promising choice. This determina-ion is m ade by considering a num ber o f factors, such as
he ex pected va lue a dded by E I, the ava ila bil ity of
esources for the FS, the timing of com pany transfor-
mations, required levels of commitment for the FS, the
availability of necessary skills to do the FS, and overall
ma na gem ent objectives to be real ised by the compl e-
ion of the FS.
Once it is decided that there will be benefit from the
EI process, management choose which of the EBEs will
be investigated in m ore d etail in the FS and determine
h e c o n st ra in t s o p e r at in g u p o n t h at i n ve s ti gat io n .
Commi tment to the cha ng e process from the ma na ge-
ment of the chosen EBE (and those that interact with
t) wi ll be g ai ned as pa rt of this activi ty to reduce
potenti al poli tical probl ems. T he IS and PC shoul d
ensure satisfactory personnel are avai la ble for the
Fea sibi li ty Study Investi g atory T ea m (FSIT ) to be
formed from those personnel who are usually respon-
ible for policy-making in the EBE. The size of the FSIT
hould be small, e.g. three people for an investigation
period of two to three weeks. In the selection of these
peopl e, once could draw on potenti al m embe rs of the
atter to be established Stee ring Committee (SC).4
Guidelines for the FS are drawn up establishing the
objecti ves, required funding , required resources a nd
evel s of commi tmen t and a project schedul e i s a lso
constructed. T hese a re then pa ssed to other ma na g e-
ment whose commitment is required and necessary for
he successful completion of the feasibility study.
2.6. Seek approval for specific EBE feasibility study (A11 5)
This activity involves gaining organizational and
individual management approval (in the light of the FS
guideline s) for conducting feasibility studies within
specific EBEs.
It m ay be valuable to p rovide the details of these
guidelines to all organizational staff potentially affected
by the EI process. This exercise should play a part in
p r o m o tin g e m p l o ye e i n vo lve m e n t in th e c h an g e
process and subseque ntly reduce the level of cultura
resistance. Depending upon the cultural situation and
con text, approval for the FS may or m ay not h ave to be
sought from other u pper-level m anagem ent ( e.g. it may
be done under the auspices of the IS and the manager
of the selected EBE).
It can be seen that the FS is similar to the PFS with
ea ch successi ve pha se buil ding on the fi nding s a nd
information of the previous phases. The activities within
the FS u tilise the findings from the PFS, allowing theFSIT to obtai n i nformation quickl y a s the focus o
investigation is more defined.
3. EBE id en tification fe asibility study
Once the pre-feasibility study has shown that there
exists a poten tial gain to be der ived from ch ange within
an EBE and EI is the m ost approp riate m ethod ology for
change, a feasibility study is carried out outlining in
more detail the impacts and bene fits to flow from EI
The FS is condu cted at the individual EBE level so as to
ensure a greater level of specificity.
Manageme nt may decide to conduc t more than one
feasibility study in parallel. This paper describes the
process of how on e feasibility study is carried out for
one E B E sel ected by ma na g ement on the ba si s of the
PFS findings. The amount of review and investigation
wit hi n t hi s p h ase d e p e n d s u p o n th e IS an d P C
understanding of the current `AS-IS situation.
Much of the information to be elucidated may be
already available in recent company studies, strategic
business reports and other documentation which allowsthe tasks to then be `collate, complete and bring up to
date the already available information.
The objective of the feasibility study is as follows.
Determi ne the envi ronme ntal i nfl uence s on theEBE.
Highlight and characterise domains of activitya nd within these doma ins the operating proce
dures and processes of the EBE.
Re view the curren t strategic direction and policiesof the EBE and subsequently develop a n umbe r of
G. Uppin gton an d P. Bern us43 6
Note that the Feasibility Study may shed some detailed AS-IS analysis, which
would require additional e ffort by mem bers trained in the utilised analysis
method.
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different scenarios, showing the most appropriate
and desirable TO-BE EBE forms.
Evaluate the costs and benefits to be gained fromeach such transformation process.
Nominate the transition objectives of each form. Devel op g uidel ines for use when the Pla nning
T eam a re desig ni ng the future form of the E BE
and are plann ing the actual transition p roce sses to
that form.
The FS will be con ducted u nde r the guidance of the
S and PC, by the FSIT. The leade r of the FSIT could be
eporting to the IS.
The feasibility study ( A12) is divided into six m ajor
tages ( figure 4) .
Appraisal of EBE Environment (A121) . App raisal of EBE Corporate Environme nt ( A122) . Development of EBE TO-BE Scenarios (A123).
Evaluation of TO -BE EBE Altern atives ( A124) . Provision of Guidelines for the Master PlanningProce ss ( A125) .
Decision to carry on with the development of anEBE Master Plan (A126) .
An additional activity (if necessary) is the trainingo f th e FSIT m e m b e r s in th e EI m e th o d olo gy
(A127).
3.1. EBE environmental appraisal (A121)
The main purpose of this activity is for the FSIT to
pi npoint the current environme ntal i nfl uences acting
u p o n t he EBE. T h e e valu atio n o f e ac h o f th e se
envi ronme ntal factors should i ncl ude a sta teme nt o
expected future trends which assist in the guidance of
the de ve lopm en t of future strategies and visions. Within
this stage the FSIT
reviews the market within which the EBE ope rates;
reviews the compe titive forces impacting on theEBE. For integration to m ake the best use of theorganizations resources, managem en t mu st have
Assessing the n ecessity of enterprise chan ge 43 7
Figure 4. Stages of the Feasibility Study.
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a thoroug h understandi ng of their competitive
environm ent. It is the nature and structure of the
chosen industry (and how the organization deals
with these) that indirectly determine s the profit-
ability of th e orgainization. Profitability is strongly
i n fl u e n c e d b y h o w t h e o r ga n iz at io n o p e r at e s
within the five compe titive forces ( Porter 1980,
1985);5
reviews the current use of technology within theEBE
6relative to techn ology use in the comp etitive
e n vir o n m e n t to id e n t ify d e fic ie n c ie s, n e e d fo r
m o d e r nisatio n , o r e x p e c te d fu tu re n e e d fo r
change in this regard;
conducts an econ omic analysis to ascertain thep e r f or m a n c e p o si ti on o f t h e EB E wit h in th e
economic environment in which the EBE is acting;
cond ucts a govern me nt ( political) analysis to showthe curren t legislative and taxation constraints the
EBE ope rates within.
The last activity within this section is to condu ct a
ocial analysis of current social expectations impacting
he EBE,7
and human resources, work-force availability
and culture.
3.2. EBE corporate appraisal (A122)
The purpose of a corporate appraisal is to investi-
gate the internal factors affecting the current p erfor-
mance of the EBE. The purpose of this activity (A122)
c an b e su m m a r ize d as id e n t ifyi n g t he d o m ai n s o f
activity of the EBE, what processes are important within
hese domains, what is the current situation within the
domains of the activity, and finally, contrasting the
current perce ived mission, vision and value s with the
findings.
The first part of this activity includes an identifica
tion of the EBEs current domains of activity ( A1221)
The second step is a review of these domains (A1222)
Much of this re view is simply detailing the findings o
th e P FS , with t he vie w o f n o w fin d in g c on c r et e
objectives for cha ng e in the i nvesti gated doma in. A
review of the domains follows.
( 1) The FSIT define the boun daries of operation of
t h e se d o m ai n s d e l in e a tin g th e t an g ib le an d
intangible l inks be tween the EBE und er investi
g ati on and other EB Es as wel l a s a mong the
doma ins i denti fi ed (e .g . points of i nteraction
existing relationships and any significan t influ
en ces de em ed important by the FSIT). For each
dom ain, its busine ss process shou ld also be listed
at a h igh level.
( 2) The FSIT iden tify the b usiness goals and cr itica
success factors for the EBE an d its domains. For
e a c h d o m ai n , th e FS IT sh o u ld i d e n ti fy th einternal or external compe titive forces impact
i ng upon i t, a nd the competiti ve streng th the
domain currently has, as well as the competitive
strength the domain should have.
( 3) The FSIT assess the EBE through the character
i za ti on of ea ch doma in and, sepa rately, ea ch
busine ss process within these domains (Rolsta
das 1995, Bussler 1995) . The result will be a table
that states the most im portant observations o
the FSIT regarding the current state of the EBE
and its domains, showing FSIT opinions regard
ing:
the decision / management structure; i nformation and ma teri al f lows ( i .e. their
interfaces, control and other relevant prop er
ties);
economi c performa nce;8
human resource functionality;9
an d
other problematic areas.
T he FSIT shoul d not be l imi ted i n i ts considera
tions the observations m ay span e ach o r any aspe ct ofthe EBE, its dom ains, and business processes such a
l iste d i n th e e x am p l e sh o wn in tab le 1 o r i n th e
following subsections.
G. Uppin gton an d P. Bern us43 8
Porters Five Competitive Forces are: existing industry rivalry, potential
ntrants, suppliers, buyers, and substitutes. Management must consider the
ollective strengths of these five forces at the local and global level in order toenerate effective competitive strategies. With such information, management
re better able to formulate decisions assisting the organization in reaching its
bjectives.
What type s of techn ology the EBE is curren tly using, e.g. spe cific types o f food
echnology, information tech nology. Example in the Hospitality Industry, it is a
ubstantial aspect of technology that it is em ployed to facilitate e fficient an d
ffective customer employee interaction in attempting to raise the quality of
ervice (Olsen et al. 1992).
E x am p l e a c co r di n g to th e h o st c o u n tr y a n d c l ie n t c u l tu r e th e s o ci al
xpectations are intrinsically important in the pre-selection process that clients
onduct in the comparsion of hospitality enterprises whose services they intend
o use. Knowledge of host country and client culture assists in appraising the
eeds and expectations of present and future customers, which facilitates the
evelopment of a good image of the organization. Continual m aintenance of
his notion of image will assist the organization in achieving its objectives.
8To identify (possibly through a Value Chain Analysis (Porter 1985)) the
contribution to the value produced or cost incurred to the product of the EBE /domain / process and to identify the resource usage (possiblythrough using RO
or re source utilisation charts) .9
It is important for managemen t to see whether the EBE has all the necessar
b u si n e ss fu n ctio n s p r e se n t th at s h ou l d b e c o n tr ib u ti n g to i ts p r o du c ts o
services.
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This second step (resulting in a table l ike table 1)
allows the FSIT to decide whether the AS-IS situation is
clearly und erstood, and results-in the de cision on wh ere
o ( a n d n o t to ) u n d e r take a m o r e th o r ou g h AS-IS
an alysis.
Note that an AS-IS analysis m ay have two objectives,
o obtain:
( 1) A model reflecting the curren t state of affairs in
the analysed en terprise d omain; resulting in a
deepe r understandi ng by mem bers of the FSIT
of their own enterprise.
( 2 ) For the FSIT to g ai n ex pertise i n how to use
enterprise model l ing for thei r ana lysis of the
business domains.
I f t h e FSIT is in e x p e r ie n c e d i n m o d e l lin g an d
analysis, then the second gain alone is worth the effort.
As a result the FSIT wi ll see the va lue of appl yi ng
ana lysis a nd mode l ling i n the subsequent EI Master
Planning process. They will also gain some proficiency
n applying analysis methods to the particular business
domain.
It ma y ha ppen that the FSIT real ise: the current
domain is in such a bad state (5 ) that more AS-IS analysis
s not l ikely to contribute to any improvement. In this
case the AS-IS a na lysis ma y be abandone d but the
opp ortunity of training on the AS-IS analysis m ust be
replaced by another form of training ( e.g. through the
study of existing textbook models). If the FSIT expects
im p ro ve m e n t o f th e d om ain to b e ac h ie ve d o r is
un certain in its characterization ( ? in table 1) , an AS-IS
analysis is performed. If the domain is judged perform
ing to the satisfaction of all parties ( 4 in table 1) there i
no need for AS-IS analysis (or change) in that domain.
Every such AS-IS analysis results in a representation
of the domain which is then assessed on its own right
( e.g. are there any structural problem s, m issing links
qualitative or quantitative deficienc ies etc?) and com
pa red to other simi lar doma ins of other enterprises
using benchmarking techniques.
3.2.1. Review of decisional/management structure. T o c o mplete this type of AS-IS analysis, the FSIT should review
th e d e c is io n an d m an ag e m e n t str uc tu re ( c o n tr o
hierarchies) of the EBE and its domains for which an
AS-IS an alysis was de em ed ne cessary. The analysis wil
identify the existing chains of authority and spans o
control which affect the communication and informa
t io n c h an n e l s wit h in an d b e twe e n th e d o m ain s an d
i dentify the deci si ona l centres a nd deci si ona l roles
within the domains as well as their conn ections.
A GRAI-grid ( Doume ingts et al. 1995, MacIntosh
and Carrie 1995, Bernus et al. 1996) may be u sed in this
Assessing the n ecessity of enterprise chan ge 43 9
Table 1. EBE observations (Legend; 4 Good, 5 Bad, ? may need improveme nt).
Domains of activity
Decisional/management
structure
Information
an d
material
flows
Economic
performance Functionality Other
Present and
necessary
Present,
n ot
necessary
Not
necessary,
present
Quoting/ Bidding 5Service 5
Strategic market planning 5
Support Management 4 4 4 4 4
Strategic m an age m en t 4 4 ? ? 4
Quality management 5
Financial and economic
management
4 ? ? 4 4
Research and development
Prod uct deve lop m ent 4 ? ? 4 ?
Technological
development
4 ? 4 ?
Internal services 4 4 4 4 4Human resources
management
4 4 5 5
Technological
development
4 5
Main te n an ce 4 5 4 4
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analysis. Based on this assessment, the FSIT can `map
he current E BE s organi zation onto a GRAI-g rid,
a b e ll in g t h e EB E s o r ga n i za ti o n al u n i ts ( p e o p l e/groups) with `roles in this map. This analysis normally
allows for the identification of problem points, e.g. the
FSIT can, through this analysis, ide ntify non -contribut-
ng roles, confli cting roles, i nconsistent deci siona l
frameworks, etc. Analysing the decision mode l of the
present EBE ( domain of activity) allows the FSIT to
answer part of the questions of the People Capability
Maturity Mode l ( PCMM) ( Curtis et al. 1995). A PCMM
s a mode l describing various levels of organizational
m at ur ity r e gar di n g h o w it m an ag e s its h u m an r e -
ources. Further answers to the PCMM can be derived
from the functi ona li ty ana lysi s bel ow a nd from the
environmental analysis A1216.
3.2.2. Rev iew of in formation an d material flows. The FSIT
dentify the information and material flows within and
between the domains of activity to show (from a logicalview) their interfaces. Th ere are two typical problem
ypes that can be pinned down in this analysis step:
( 1) The interfaces (information and material flow)
within the a nal ysed EB E a nd doma in are not
well defined (e.g. information and material flow
ar e n o t c o or d in at e d , t he d at a an d m a te r ia l
exchange is based on ad hoc methods, etc.).
( 2 ) T h e in t e rf ac e s ar e d e f in e d , b u t d a ta an d
m a te r ial e x c h an g e is i n e ffic ie n t ( e . g. d u e t o
too m any process steps, bottlenecks, inefficien t
technology, etc.).
T he i denti fi ca ti on of these probl ems ca n be done
hrough:
( 1) qualitative information and material flow m od-
e l s o f t h e d o m ai n ( e . g . I DEF0 , Da ta Fl ow
Diagrams, CIMO SA functions and information
views ( Ver nadat 1995) , Petri Nets, Entity re la-
tionship- or Object-oriented schem ata) ;
( 2) quantitative analysis ( m ostly achievable through
si mulation model l ing ) to cha ra cteri ze the i n-formation and material flow in the domain (e.g.
using CIMOSA, Timed Petri Nets, GPSS/ SIM-SCRIPT, GERT/ QGERT, e tc).
3.2.3. Rev iew of economic performan ce. The FSIT review
he economic performance of each domain of activity
for which an AS-IS analysis was d ee m ed ne cessary. Th e
FS IT sh o u ld i d e n ti fy i f t h e r e e x i st s p e r fo rm a n c e
ndicators and corresponding criteria at all to measure
h e p e r fo rm a n ce o f t h e d o m ain . If n o su c h c rite r ia
exists, the n the FSIT must develop perform ance criteria
t o m e asu r e th e p e r fo rm an c e o f t h e d o m ain . T h e
pe rformance crite ria should be e valuated to assess the ir
validity as they are ope n for customization according to
the domain; i.e. not all performance indicators/ criteriaar e ap p lic ab le in al l d o m ain s . If th e p e r fo rm a n c e
criteria are not being me t, it indicates the domain m ay
requi re chang e.
A useful wa y of deri vi ng economi c performa nce
indicators ( and identifying performance drivers) is for
the FSIT to create an Activity Based Costing ( ABC)
mod el of the investigated domain or process (Lucertini
et al. 1995) . The ABC mode l could e ither be separately
created or a s an ex tension to function a nd resource
mod els ( e.g. CIMOSA) created as part of the informa
tion and material flow analysis.
T he dev el opment of a new performa nce mea sure
me nt system is of course not the task of the FSIT ; i
could be done by the Master Planning team as part of
the EI Programme.
T o su m m a r iz e , e ith e r t h e re a re p e r fo r m an c eindicators, which can be used to benchmark the EBE
against comp etitors and expected trends ( in which case
ben chm arking is used to assess the nee d for change) , or
t h e re ar e n o p e r fo r m an c e in d ic ato rs ( o r t h e re e x is
only partially de ve loped one s) in which case the ne ed
to de velop these is part of the task of the e nsuing m aster
plann ing process.
3.2.4. Rev iew of hu man resource fun ctionali ty. T he huma n
resource functionality is reviewed from the point of view
of the huma n resource structure, functi on a nd roles
(Curtis et al. 1995) showing how the domain operates at
the leve l of the orgaizational actor i.e. the individua
i n th e o rgan iz ati on ( a s t h e re m a y b e a n u m b e r o
h u m an -c e n t re d p r o d u c tio n an d se r vi ce p r o c e sse s )
Note that even though a similar type of analysis has
been ca rri ed out for huma n ma na g ement rol es i n the
first step ( decisional mode l), this analysis looks at the
individual in the service / production process.In t h is st e p , th e FS IT sh o u ld c o n si d e r h o list ic
asp e c ts as we l l as th e h u m a n r e so u rc e , as it o fte n
h a pp e n s th at u n e x p lain e d ( i .e . n o t m o d e lle d o r
q u a n ti fi e d ) c h ar ac t e ri sti cs o f th e h u m an r e s ou r sei n flu e n c e t h e se r vi ce / p r o d u c ti on . W e a rg u e t h atpersona li ty a nd ma na gem ent intuition shoul d not be
disregarded in a m isguided quest for quantifying e very
d e c isi on . S h ou l d th e q u an t ifie d asp e c ts an d th e
i ntuitive a spects of the ana lysis be i n conflict, this
a ctivi ty w il l shed li g ht to probl ems that need to be
confronted.
3.2.5. Summa ry of AS-IS an alysis. It is expected that these
analyses will fill in the gaps in the understanding of the
curre nt AS-IS situation within the EBE ( there will be no
G. Uppin gton an d P. Bern us44 0
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question marks `? in table 1). If a more detailed AS-IS
ana lysis i s requi red, the FSIT review i n more depth
hose items identified with a question mark `? in the
previous activity.
The findings from these investigations and reviews
can now be contrasted wi th the currentl y perceived
mi ssion, vi si on a nd val ues of the EB E10
(A 12 24 ) to
d e n t if y t h o se p r oc e ss e s wh i ch d o n o t c o n tr ib u te
owards compe titive advantage or the performance of
which is not to the desired level. The FSIT also identify
hose dom ains of busine ss activity which should have
clearly define d p erforman ce indicators, but do not h ave
hem (note: this is not always achievable).
O n t h e p r e se n t c o rp o ra te ap p r aisal l e ve l i t i s
desirable to identify not only the problem performance
ndica tors but a lso the problem drivers. T hi s i s so,
because i t i s those doma ins of a ctivi ty (or processes
wi th i n th o se d om a in s) th at n e e d c h an g e wh i ch
encom pass the performance drivers at fault.
In those enterprises whi ch a lready do ha ve wel ldefined processes, the corporate appraisal could unveil
he processes with the performance drivers that cause
c on c e r n . T h u s c o n d u ct in g an an alysi s h e r e h a s th e
poten tial to iden tify a relatively smaller area that n ee ds
c h an g e . It sh o u ld b e ke p t in m i n d th at si gn i fic an t
p e rf or m an c e d r ive r s m ay b e o u tsi de o f t h e give n
domain.11
However, the enterprise may not be at the level of
maturity of `operating well defined processes (Paulk et
al. 1 9 93 ) i n whi ch case the ` too de ep a nal ysis of the
p re se n t si tu atio n m ay n o t p ro m ise m u c h an d th e
change should be directed to `defining processes as a
priority in the change process.
A valid reason for un dertaking an EI p rogramm e
may be to bring the EBE from one level of maturity to
he nex t (Pa ul k et al. 1 9 9 3 ). It w i l l then be up to the
master planning team to ensure that the performance
drivers with significant impact on performance indica-
ors of the EBE be com e con trollable in the TO-BE state
of the EBE.
This allows not only the identification of potential
areas of improvem en t but also the ability to recognize
non-value-adding processes as an organization profitsfrom successful competition and efficient utilization of
esources (Sa g er 1 9 9 0 ) (note: the empha si s here i s to
ecognise any problems, contradictions, missing details
etc., n ot to solve them) . Importantly though, it is not
advised to take a dogmatic view of value adding, value
c an b e ad d e d in f or m o f t h e p r od u c t o r i n f or m o f
creating future capability whe re the consume r of the
product is the future enterprise.
T h is su b se c t io n g ave d e t ail s o f t h e c o rp o r at e
appraisal. The result o f this appraisal allows the FSIT
to clearly see if there is any strategic gap between the
current practices and the perceived current ope rationa
m ission, vision and value s (H owe 1986) . The result wil
then be used to direct the change within the EBE.
3.3. Develop EBE T O-BE scenarios (A123 )
The central component of this activity involves the
developmen t of alternative EBE TO-BE scenarios. A
num ber of TO-BE scenarios ( future desired states) can
be developed to facilitate various identified opportu
ni ti es a nd to al low for the eva lua ti on of strategi c
alternatives.
This activity involves the identification of significant
opportunities ( Gasser and Majchrzak 1995) for EBEchange (incorporating the high level vision which was
t h e d r ive r b e h in d th e P FS ) . T h e o p po r tu n itie s fo r
cha ng e are ma de ex pl ici t through the envi ronme nta
a nd corporate assessmen ts A1 2 1 (i f trends or fore
casts indicate ch ange is required ) , and A122 ( if strategic
gaps are appare nt) . The activityre quires the re cognition
o f an y c o n st ra in t s t o EB E c h an g e p r oc e ss ( s oc ia
exp ectations, legislative con strain ts, etc.) and conclud es
with the generation of alternative EBE TO-BE scenarios
3.4. Ev alu ate EBE alternatives (A124 )
Each E BE T O -B E scena rio i s eval uated a s to it
viability regarding its costs and ben efits and imple me nt
ability in the give n organizational con text. This e valua
t io n wil l u se th e r e su lt s o f th e e n vir o n m e n tal an d
corporate appraisals i.e. does the known EI m etho
dolog y handl e the type of cha ng e required and i s the
me thod impl eme ntabl e i n the orga ni za ti on? and a
few other specific influencing factors treated below.
T he activi ty beg ins wi th a cost/ ben efits analysis
(A1241) for each desired EBE TO-BE scenario to assessthe costs of undertaking EI within the EBE in view of
the identified be ne fits.
The FSIT also analyse the imm ediate e nviron me nta
variables (A1242) of the EBE, to find out whether they
will influen ce the se lection of the most appropriate EBE
TO-BE, as follows.
The FSIT con sider the causes and leve ls of syne rgyand coh esion throughout and between interacting
business domains. The FSIT should consider the
current situation as well as the structure inhe rent
Assessing the n ecessity of enterprise chan ge 44 1
0If applicable.
1This indicates strategic instability for the enterprise.
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in the EBE TO-BE scenario. Example, if change is
need ed i n one doma in ` D , how wi ll thi s effect
other doma i ns, a nd w i l l these other doma i ns be
able to absorb the r esulting ch ange e ffects, such as
their usual way of interaction with the dom ain `D,
Such consideration u sually results in an escalation
of the chang e process to doma ins nei g hbouring
the one that is fundamentally altered. The result
will show the FSIT the scope of change that the
FBE should go through.
The FSIT tries to identify internal social func-tions to un der stand the c onstraints and limitations
that influen ce an d d ictate a successful EBE chan ge
process (e .g . Ci borra 1 98 4 , B rodwi n and B our-
g e oi s 1 9 9 1 i n O l se n et a l . 1 99 2 , Alt e r 1 99 2 ,
Bergquist 1993, Hasan and Cheung 1993).
T he FSIT i denti fy the power and political con-structs (ba sed on the ma na g ement a nd deci si on
structure) as analysed in A12221 to see how these
influence the daily work practices in the organiza-tion as the y may impact on the successful change
process ( Morgan 1986, Vallen and Vallen 1991,
Olsen et al. 1992, Walsham 1993).
The positive and negative effects of the possiblec h an g e sc e n ar io s o n t h e p o we r c u lt ur e o f t h e
organization are identified. The FSIT should be
able to tell, by the end of the activity, what forces
wi ll su p p or t an d wh a t f or c e s will o p p ose th e
change and why.
An analysis is include d of the group d ynam ics andorganizational leadership issues which must be
allowed for as they may impact on the successful
c h an g e p r o ce s s ( e .g . P fe ffe r 1 98 1 , Fr an z an d
Ro b e y 1 98 7) . T h e FSIT sh o u ld id e n t ify th e
p e r so n n e l , wh o t h ro u g h l e ad e r sh i p q u al it ie s
woul d carry the cha nge process ( both techni cal
and managerial leadership is to be identified). If
certain qualities are not p resent, this ne eds to be
clearly stated.
This analysis can be used to achieve two goals. It can
b e u til ise d to r e fin e t h e id e n t ific atio n o f t h e m o st
ui ta bl e T O -B E scena rio, and i t ca n be uti li sed todentify those factors that need to be considered during
he change process.
Resulting from the above two activities ( A1241 and
A1242) the mo st satisfying EBE TO -BE sce nario is the n
p r op o se d b y t h e FSIT ( e . g . t h e r e su lts o f t h e c o st/bene fits analysis ( A1241) and the EBE en vironme ntal
variables analysis ( A1242) may show that even though a
certain form of an EBE TO-BE scenario is prom ising to
b e t h e m o st b e n e fic ial in t e rm s o f c osts ; th e EBEs
culture, structure and political processes may not allow
for smooth transition).
For the selected scen ario, the FSIT should iden tify a
first-cut set of transition requ irem en ts and objectives
The transition (EBE TO-BE) requireme nts and objec
tives are formulated to meet A121 (EBE Environmenta
Appraisal) and A122 ( EBE Corporate Appraisal) find
ings. These transition objectives will be utilised later in
d e fi n in g th e EB E T O -BE i n th e Mast e r P la n n in g
process.
T he F SIT coul d col l ect i n one document the E B E
Transition objectives and selected EBE TO-BE scenar
ios, this will form a section o f the FS Rep ort ( see A125)
The docume nt will de scribe the following.
Future business objectives and plans for the EBETO-BE.
Selected EBE TO-BE scenarios. Future long-term capital goals of the EBE TO-BE Fu t ur e str at e g ic d i re c t io n a n d p o li c ie s to b e
implemented in the EI Master Plan.
Future system architecture and standards of theEBE TO-BE. EI Master Plans critical success factors ( these
CSFs are those which m ust be re alised in orde r for
the EI Master Plan to be successfully completed)
EI Master Plans long-term requirements.
3.5. Establish gui delin es for the EI master plan n in g process
(A125)
T h e e st ab li sh m e n t o f th e g u id e l in e s f or th e EI
Master Plann ing process involves the pre paration o f the
Feasibility Study Rep ort, which include s the following.
( 1 ) Th e re su lts o f th e ap pr aisal o f th e EBE
en viromen t ( A121), the EBE corporate apprai
sal (A122) , the developmen t and feasibility of
a se le c te d EBE TO -BE sc e nario , an d th e
i dentification of the EB E tra nsi tion (A 12 3
A1 24 ) . E ach of these ha ve been prepared in
the activities described in the previous section
The results will assist in gaining manageme nt
c o m m i tm e n t s h owin g th at t h e re is a vi ab lea nd val id opportunity for enterprise i nteg ra
t io n with in th e o rg an izat io n to e n su re it
maintains its compe titive advantage as well a
capturing the organi zational mi ssion, objec
tives, strategies, goals, critical success factor
etc.
( 2 ) C on c r e te p la n s f or an EI Mas te r P lan n i n g
process are established, including the required
resource levels, funding, management commit
me nt, a nd a prel imi na ry schedul e for Master
Planning.
G. Uppin gton an d P. Bern us44 2
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( 3) Nomination of the EI Steering Committee ( SC)
wh o sh al l o ve r se e t h e E I Ma st e r P la n n in g
p r oc e ss a n d o f th e Ma st e r P lan n i n g T e am
( MPT) who will carry out the master plann ing
task. T he nomi nation i nvolves the g ai ning of
m a n ag e r ial c o m m i tm e n t o f t h e SC an d MPT
me mbe rs, based on clearly stated objectives of
the Master Planning proce ss as developed above.
3.6. Seek approv al for specific EBE EI master pla n n in g ph ase
(A126)
Final approval for the EI Master Plann ing ph ase is
hen soug ht, based on the FS Report. T his i nvol ves
gainin g organizational an d in dividual EBE m anagem en t
approval for conducting Enterprise Integration Master
Planning upon a specific EBE. This approval should be
gained in the light of the guidelines as provided in the
FS Rep ort ( see A125) and is the initiating decision tocomm ence the Master Planning. Within this stage, it
may be valuable to provide the details of these guide-
in e s ( d i st rib u te c o p ie s o f t h e FS Re p o r t) to al l
o r ga n iz at io n a l st af f p o t e n ti al ly a ff e c te d b y t h e EI
process. As above, this exe rcise should play a part in
promoting employee involvement in the change process
an d subseque ntly redu ce the level of cultural resistance .
Mintzberg ( 1994, pp. 207 208) writes `planning has
generally garnered its greatest support when conditions
have been relatively stable. By this statement Mintzberg
ncorporates the ideals that `planning works best when
t ex trapol ates the present or dea ls wi th i ncremental
change within the existing strategic perspective.
Managem en t comm itme nt is therefore accumulated
when it is convinced that the orgainization can handle
chang e, i .e. when ma na g ement see that ei ther ( a) the
desired state of modu s operan di is not `too far from the
c u rr e n t st at e , o r ( b ) a viab le m e t h o d o f t ran si tio n
between states is available.
4 . C o n c lu s i o n s
T h e ab ove m e t h o d olo gy h as b e e n d e ve l op e d in
more detai l a t Gri ffith University i n the form of a
process model for the purposes of a dissertation, and
epresented as a network of functions tha t coul d be
unde rtaken by the change age nts of an en terprise. This
mode l of initiating ch ange allows for the prerequisites
for the establishment of the initial EI programme to be
atisfied as described in Williams (1994a, sect. 2.1).
T h e r e ad e r sh o u ld n o te t hat i n m o st r e lative l y
healthy organisations the information needed to carry
out this change-initiation process is either available or
relatively easy to obtain. A typical estimate for the effort
a nd resources needed w oul d be a bout 2 to 4 months,
where the Pre-Feasibility Study is done in 6 weeks by the
IS and PC, taking a few hou rs a wee k on be half of the IS
and full-time for the PC. The FSIT would then commit
3 or 4 ma na gem ent l evel pa rticipa nts, working i n a
group for 3 to 4 hours a wee k and an additional one day
a we e k c o m m itm e n t fo r 1 .5 to 2 m o n t h s. T h e tim e
spent by the FSIT should include some initial informa
tion sessions, held by the IS and PC and the chair of the
FSIT should prepare instructions and schedule for the
FS for each team me mbe r. The FSIT then writes up its
report ( estimated to take up 1.5 weeks at the end of the
FS acti vity) .
Below is a summary of the results of the `Identifica-
tion of the E BE stag e of the enterprise i nteg ration
process.
T h e o p e rat io n o f th e o rga n izati on h a s b e e n
assessed in terms of external and internal forces. A decision ha s been ma de as to the necessity o
undergoing a coordinated change process effect
in g o n e o r m o r e o f t h e b u si n e ss e n t i tie s o f th e
company.
The most appropriate m ethod for that change h ab e e n d e ci de d as we ll as th e c h an ge m e t ho d s
ben efits, standard s, etc.
The current (strategic and operational) problemshave been highlighted.
The organizations strength s and weakne sses h avebeen highlighted.
T h e p e r fo rm a n c e i n d ic at or s an d p e r fo rm a n c edrivers have been identified (in order to measure
fu tu r e su c ce s s w h ic h c an b e e x p re sse d via im
provement in terms of the performance variables
that are aligned with a given set of strategies).
The direction of the industry sector in which theorganization rests has be en assessed , as well as the
expected trends have been identified.
A p r e lim i n ar y EBE T O -B E sc e n ar io h as b e e ni dentified a nd a ssessed subjectivel y a nd objec
tively.
P re l im i n ar y c o st s an d b e n e f its o f th e c h an g eprocess have been assessed.
T he orga nization s g oal s, to be i mpl emented byEI, have been communicated.
The critical business and corporate issues, strategies, and critical success factors of the organiza
tion and the EBE have been identified.
T he ski ll a nd knowl edg e base of the empl oyee shas bee n assessed via their structure, fun ction and
roles.
The organization culture has been assessed for itsresistance or acceptance to change.
Assessing the n ecessity of enterprise chan ge 44 3
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The cultural seed of change vital for acceptanceand consensus has been acknowledged.
Guidelines for the master planning process havebeen established.
Management expectations for the proposed pro-ject have been identified.
T op ma na g ement i nv ol v ement a nd commi tmenthas bee n established.
T he ` Establi shm ent of the Initial Prog ra mme i s
eady to begin. The `Ide ntification of th e EBE stage h as
concen trated on the following.
Assessing the change methodology. The competitive market and other relevant forces. The readiness and amenability for organizational
and EBE change.
T he orga nizationa l g oals and objectives to beimplemented by EI.
The desired TO-BE state of the EBE.
T h e I S an d P C wo u ld alr e ad y h a ve m u c h o f t h e
equire d in formation as well as econ om ic, strategic, and
an alytic in ve stme nt justification ( as note d in William s
994) . The identification and selection of the EBE has
been ma de, al ong wi th the nomi nation of potential
mem bers of the EI Steeri ng C omm i ttee a nd Master
Planning Team.
T he chang e a ssessment methodolog y presented i n
his article corresponds to the identification layer of
PERA and GERAM, and can be applied to both existing
and `green-field operations. AS-IS analysis in the green-
field case may be applied to earlier designs (e.g. when a
compa ny deci des to bui l d a new pl a nt). T hi s cha ng e
ass e ss m e n t m e t h o do lo gy c an b e ap p l ie d i n m an y
different industry sectors, as the pre-feasibility study
and feasibility study are not industry specific. In fact the
fi rst version of the methodol og y was i ntende d to be
ervi ce (h ospital ity) i ndustry speci fi c, but as work
progressed, it tra nspi red that the basic processes of
change assessment are indeed the same in service and
manufacturing industries partly because more and
more of m anufacturing industry is incorp orating servicecompon ents, while the service industry is taking over
echn ologies traditionally rooted in m anufacturing, and
partly because integration requires in both industries
h e su c ce s sfu l tr e at m e n t o f p r od u c t an d r e so u rc e
m an a ge m e n t , o f c o-o rd in a tio n an d o f th e h u m an
organizational component.
Identification layer activities may be carried out in a
phased approach to lay good foundation of the ensuing
more detailed change process, such as specified in the
uccessive en terprise life -cycle layers. T he PFS and FS
den tify policies and requ irem en ts, with de cisions made
o n p ar t ia l ( b u t i n fo r m at ive ) d a ta wi th i n c re a si n g
definition as progress is m ade through the activities
allowing for intra-phase and interphase comm unica
tions (w hich a re crit ical i n the preli mina ry de sig n
phases).
This level of communication allows for the users to
make explicit the hidden requirements that have gone
unnoticed over t ime, a s compa ny personnel know the
`workarounds in the current AS-IS scenario without
these bei ng percei v ed or know n i n deta i l by ma na g e
m en t. Con ve rsely, m anagem en t goals and o bjective s are
not always linked to activities of the operational level
thus a sub-optimal company culture is sustained. `True
and lasting change com es whe n those inne r and hidden
a ssumptions ( or beli efs) and va lues are cha ng ed a nd
t h at th i s c an o n ly b e ac h ie ve d th r ou g h a sh ar e d
u n d e r s ta n d in g ( C o o p e r 1 9 95 i n r e vi e wi n g S ch e i n
1985) .
We have shown a detailed model of how change can
be initiated in an enterprise and how this process fitsinto a larger process called Enterprise Integration. We
h a ve st ar te d f ro m a c o m p le t e e n t e r p rise l ife -c yc le
reference architecture ( PERA and GERAM) , concen
trated to th e first iden tification laye r of the life-cycle
and produced a process model of the pertinent part of
the methodology, which could be called a methodology
for change assessem ent.
The need for such a model is justified through the
fact that usual methodology handbooks either; (a) do
not operationalise the activities to be carried out by
ma na gem ent, a nd therefore a re of l ess hel p than they
c o u ld b e , o r ( b ) t he way o f t e xtu al p r e se n t at io n o
methodologies leaves many questions open, especially
as for the information needs of methodological steps
and the information links between these steps (Keller
and Detering 1995).
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Assessing the n ecessity of enterprise chan ge 44 5
Ap pe ndix A: Activity list
A0 Develop Master Plan
A1 Identify EBE
A11 Conduct PFS
A111 Investigate Project
A1111 Initial Discussions
A1112 Identify Value of Undertaking Change
A1113 Identify Possible Methods
A1114 Select Most Appropriate Method for change
A112 Examine E1 Particulars
A1121 List Generic Benefits of E1 in Given Industry
A1122 Identify Current Enterprise Integration Guidelines & Standards
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G. Uppin gton an d P. Bern us44 6
A1123 Iden tify Possible Enterprise Integration Objectives
A1124 Determin e Goals for Enterprise Integration Activities
A1125 Deve lop Action Plan for Ente rprise Integr ation Pre-Fe asibility Study ( Rapid Analysis)
A113 Con duc t Pre-Fe asibility Stud y ( Rapid Analysis)
A1131 Examin e Organizational Status Quo ( AS-ISh igh leve l)
A11311 Review Curren t Business and Marketing Strategies
A11312 Conduct SWOT Analysis
A11313 Condu ct Industrial Tre nd s Analysis
A11314 Review PI and PD for given Organizational and Industry Sector
A1132 Determine Value of Enterprise Integration within Context-Specific EBEs
A11321 Identify and List All EBEs
A11322 Assess each EBE
A11323 Identify Existing Strategic Direction and Policies for each EBE
A11324 Evaluate 112, 1131, 11 32 findin gs
A11325 Nominate Potential Change EBEs
A1133 Prepare Rapid Analysis Report
A114 Determine Viability of Undertaking Enterprise Integration
A1141 Evaluate Preliminary Direction for Feasibility Study
A114 11 Re vie w Rapid Analysis Find ing s
A11412 Evaluate Alternatives for Feasibility Study (FS Options)A11413 Determin e Preliminary Direction for Feasibility Study
A1142 Establish FS Proposal
A11421 Seek Management Commitment for Feasibility Study
A11422 Seek Other Necessary Commitments for Feasibility Study
A11423 Selection of Feasibility Study Investigatory Personnel
A1143 Prepare Feasibility Study guidelines
A11431 Docume nt Objective s of Feasibility Study
A11432 Docume nt required Resources
A11433 Docume nt required Fundin g
A11434 Document required Commitment
A11435 Docume nt Schedule
A115 Seek Final Approval for Specific EBE Feasibility Studies
A12 Conduct Feasibility Study
A121 EBE Environmental Appraisal
A1211 Conduct Market Analysis and Expected Trends
A1212 Conduct Competition Analysis and Expected Trends
A1213 Conduct Technology Analysis and Expected Trends
A1214 Conduct Economy Analysis and Expected Trends
A1215 Conduct Government Analysis and Expected Trends
A12151 Conduct Legislation Analysis and Expected Trends
A12152 Conduct Taxation Analysis and Expected Trends
A1216 Conduct Social Analysis and Expected Trends
A122 EBE Corporate AppraisalA1221 Identify EBE Domains of Activity
A1222 Review Domain of Activity (if necessary)
A12221 Define Boundaries of ope ration for e ach domain
A12222 Review Business Goals and Critical Success Factors
A12223 Characterize each domain of activity
A122231 Assess Decision and Management Structure
A122232 Assess Information and Material Flows
A122233 Assess Economic Performance of Domain
A122234 Assess Human Resource Functionality of Domain
A1223 Comp lete AS-IS analysis ( if re quired)
A1224 Contrast curre nt Mission, Vision and Value s to A121, A1221 and A1222
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Assessing the n ecessity of enterprise chan ge 44 7
A123 Develop TO-BE Sce narios
A1231 Identify Change Opportunities
A1232 Iden tify Change Constraints
A1233 Generate Alternative TO-BEs
A124 Evaluate EBE Altern ative s
A1241 Conduct Cost/ Ben e fits An alysisA12411 Select App ropriate Cost/ Benefits Technique for E1 ContextA12412 Conduct/ Obtain Cost/ Benefits Analysis on EBEA12413 Review Results of Cost/ Ben e fits An alysis
A1242 Conduct Environmental Variables Analysis
A12421 Conduct Structural Analysis
A12422 Conduct Cultural Analysis
A12423 Conduct Power and Political Analysis
A12424 Conduct Organisational Behaviour Analysis
A1243 Select EBE TO-BE
A12431 Assess feasibility of scen arios in ligh t of en vironm en tal variable s
A12432 Select Most Suitable EBE TO-BE Scenario
A1244 Establish EBE Transition Objectives
A12441 Iden tify Future Busine ss Objectives and Plans
A12442 Identify Long-Term Capital GoalsA12443 Indent Strategic Direction and Policies to be Implemented by E1 Master Plan
A12444 Define Future System Architecture and Standards
A12445 Define Critical Success Factors of EI Master Plan
A12446 Define E1 Master Plan Long-Term Requirements
A125 Establish Guidelines for Maste r Plann ing Process
A1251 Prepare FS Report and Master Planning Guidelines
A12511 Collate Objectives of Master Plan
A12512 Docume nt re quired Resources
A12513 Docume nt re quired Funding
A12514 Document required Commitment
A12515 Document Master Plan Schedule
A1252 Create Steering Committee and Master Planning Team
A12521 Docume nt Objectives of EI Steering Committee and MP team
A12522 Nominate Steering Committee and MP Team Members
A12523 Seek Management Commitment
A126 Final Approval for Specific EBE Enterprise Integration Master Plann ing Phase
A13 Establish Initial Programme
A2 Develop EBE Concept
A3 Develop EBE Definition