CHANGE MANAGEMENT PROCESS IN THE WORLD OF IT - Polimi.it

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Facoltà di Ingegneria Industriale e dell’InformazioneMaster of Science in Management EngineeringCHANGE MANAGEMENT PROCESS IN THE WORLD OF ITSupervisor: Prof. Alessandro BrunReport by: Kavya NarasimhamurthyStudent ID number: 859575Academic Year: 2016/2017

ACKNOWLEDGEMENTI would like to thank my parents for being my support system. They have always been my pillarsof strength and have encouraged me to be the best of myself. They have taught me and my sisterto be happy even in rough times. I cannot thank them enough for being who they are.Moving to Italy, has proved to be one of my best decisions. My heartfelt gratitude goes to all myfriends who made me feel at home and helped me in this new place.Politecnico Di Milano has made me realize my potential and understand that the greatest strengthis in understanding differences and appreciating them. I would like to express my profoundgratitude to the all the Professors for the learning they gave me.I would like to thank Professor Brun for all his support and for making this process an amiableglide. He steered my thoughts in the right direction.Finally, I would like to thank Amplifon group for giving me an opportunity to learn and grow inthe professional front. I would like to express my special thanks to Mr. Giovanni Canino, mymentor for being and guiding me through the smallest of things.Page 2

ABSTRACTDigital growth in the present age transforms many industries and the rate of change is everdemanding. This scenario is specifically relevant in the IT industry. Every IT landscape mustevolve over time. Old technologies must be replaced, while existing ones require continuousupgrade to meet the ever-increasing demanding regulations. Businesses must adapt changemanagement process to be in pace with the competing world.This report is a brief write up on the change management process in the world of IT supported bythe practical knowledge gained during my internship in Amplifon. Firstly, we understand what ischange and why is it important to implement a change management process in an organization.Next, the basic concepts of change management process are understood to get a clear picture aboutthe practical implementation of the process. This is followed by a summary of illustrativeworkflows and tools employed in a massive organization such as Amplifon. We conclude thereport by highlighting the key points that are essential to have a successful change managementprocess in place.ESTRATTOLa crescita digitale dell'età presente trasforma molte industrie e il tasso di cambiamento è semprepiù incalzante. Questo scenario è particolarmente rilevante nell'industria IT. Ogni ambiente ITdeve evolversi nel tempo. Le vecchie tecnologie devono essere sostituite, mentre quelle esistentirichiedono un aggiornamento continuo per soddisfare le sempre maggiori richieste poste dallanormativa. Le imprese devono adattare un processo di gestione delle modifiche per essere in lineacon la concorrenza.Questa relazione è una breve descrizione del processo di gestione delle modifiche nelmondo dell'IT, supportata anche dalle conoscenze pratiche acquisite durante il mio tirocinioin Amplifon, in cui ho seguito il processo aziendale di gestione dei cambiamenti. In primoluogo, vengono presentati i cambiamenti e perché è importante implementare un processo digestione delle modifiche in un'organizzazione. Seguono i concetti di base del processo di gestionedei cambiamenti, che sono funzionali ad avere un quadro chiaro sull'implementazione pratica delprocesso. Una sintesi introduce i flussi di lavoro e degli strumenti illustrativi impiegatiin un'organizzazione vasta come Amplifon. Infine la relazione evidenzia i key ponit essenziali peravere un processo di gestione dei cambiamenti di successo.Page 3

CONTENTSCHAPTER 1 – INTRODUCTION1.1 What is change?1.2 What is Change Management?1.3 Is Change management important?CHAPTER 2 – LITERATURE REVIEW2.1 Information Technology Infrastructure Library2.1.1 Need for ITIL2.1.2 ITIL Framework2.1.3 Benefits of ITIL2.2 Service Transition2.2.1 When is service transition helpful?2.2.2 Service Transition Process2.3 People management through Service Transitions2.4 Technology Considerations2.4.1 Interdependence and automation of processes2.4.2 Configuration Management System2.4.3 Release and Deployment Technology2.5 Implementing Service TransitionCHAPTER 3 – CHANGE MANAGEMENT IN IT3.1 Change Management Concepts3.2 Change Management Procedures3.3 Change Management Roles3.4 ITIL Change Management Process3.5 Change Advisory Board3.6 Change Management KPI’sCHAPTER 4 – EMPIRICAL ANALYSIS4.1 About Amplifon4.2 Market Analysis4.3 Business Model of Amplifon4.4 Change management at Amplifon4.4.1 Process Goals4.4.2 Change Management Process Flow4.4.3 Nature of Change Requests4.4.4 KPI’s for Change Management4.4.5 Change Management Tools4.5 Roles and ResponsibilitiesCHAPTER 5 – 12222242525293132333438394040495050535557Page 4

LIST OF FIGURESFigure 1: ITIL’s Evolution10Figure 2: ITIL Framework11Figure 3: ITIL Process Management12Figure 4: Service Transition12Figure 5: Service Transition Process14Figure 6: Service Knowledge Management System20Figure 7: Provisioning new service20Figure 8: Feature of Change Requests23Figure 9: Change Management Procedure24Figure 10: Change process Management Roles and Responsibilities28Figure 11: Life cycle of a change request (ITIL)29Figure 12: Role of CAB in Change Management Process30Figure 13: Growth drivers in hearing devices35Figure 14: Market Value Split35Figure 15: Growth driven by Baby boomers36Figure 16: Growth figures for North America36Figure 17: Growth figures for Europe37Figure 18: Distribution Channels37Figure 19: Value Chain39Figure 20: Level of organization40Figure 21: Sample Process flow for Change Raising and Recording41Figure 22: Sample Process flow for Change Classification42Figure 23: Sample Process flow for Change Assessment43Figure 24: Sample Process flow for Change Authorization and Schedule44Figure 25: Sample Process flow for Change Implementation Coordination45Figure 26: Sample Process flow for Change Review and Closure46Figure 27: Sample Process flow for Change Monitoring and Reporting47Figure 28: Sample Process flow for Change Management Performance evaluation48Figure 29: Change Management Process Flow49Page 5

Figure 30: Footprints Dashboard52Figure 31: A sample change request52LIST OF TABLESTable 1: KPI for Change Management Process31Page 6

CHAPTER 1 - INTRODUCTION1.1 What is change?Change has been perceived differently by different groups of people throughout the evolution ofmankind. As a result, change has had different meanings throughout literature due to differentperspective levels. Change could be defined as the transformation towards a future state of anorganization, therefore achieving expected results1. Alternatively, other authors have definedchange on a lower level than Creasey’s definition, more as a variation within the transformationalproject2.The first definition emphasizes on the organizational transformation from a current state to aprospective future state, while the second mainly concerns the change within this transformation.1.2 What is Change Management?Change Management is a collective term that is used to support and prepare individuals, teams andorganizations in the process of organizational change. It includes several methods to redirect theresources, business process, budget allocations or other processes that can significantly affect theway an organization can perform.1.3 Is Change management important?The environment in which companies are currently evolving has become one with a binaryoutcome: ‘change or die’3. The change that companies are meeting has altered over the years4.Due to this new environment, companies have understood the importance of adaption. In the recentpast many projects began, but only leading to depressing high failure rates of between 50 and 70%,as depicted by numerous dissertations: Stanton et al., 1993; Spector & Beer, 1994; Crowe &Rolfes, 1998; Marjanovic, 2000; Cao & McHugh, 2005.These failures created heavy losses to companies who were unable to adapt to change and to facethe terrible laws of economics. This leads to a common understanding that approaches like Total1Creasey, 2009Rousse, 20153Beer & Nohria, 20004Hayes, 20022Page 7

Quality Management or Business Process Reengineering on their own were not successful 5. Thisincentivized some researches and managers to think about alternative ways to cope with change,leading to the creation of change management.This paper will focus on the change management methodologies employed in a leading healthcareorganization – Amplifon in the field of information technology. It will also throw light on howbusinesses as such can thrive by using the right change management techniques.To understand better the concepts of change management in terms of information technology, it isimportant to focus our attention on ITIL processes and service transition in detail.5Burnes, 2014; Siegal et al., 1996; Genus, 1998Page 8

CHAPTER 2 – LITERATURE REVIEW2.1 Information Technology Infrastructure LibraryITIL is a globally recognized best practice methodology for IT service management which is usedall over the world by organizations to ensure that their IT services are aligned to the needs of theirbusiness. To understand better the concepts of ITIL, it is important to know the rudiments of ITSM.IT service management(ITSM) refers to all the activities that are directed by policies, organized inprocesses and supporting procedures which are performed by an organization to plan, design,deliver, operate and control information technology services offered to customers. It is oftenassociated with Information Technology Infrastructure Library(ITIL). Therefore, ITIL can bedescribed as a set of intricate practices for IT service management whose focus is on the alignmentof IT services with the needs of business. ITIL addresses the organizational structure and skillrequirements for an IT organization by presenting a comprehensive set of management procedureswith which an organization can manage its IT operations.2.1.1 Need for ITIL:The concept of ITIL dawned in the 1980’s when the British government determined that the levelof IT service quality provided to them was not sufficient. The Central Computer andTelecommunications Agency (CCTA), now called the Office of Government Commerce (OGC),was tasked with developing a framework for efficient and financially responsible use of ITresources within the British government and the private sector.6 In Europe, large companies andorganizations embraced the framework quickly in the early 1990s. The IT sector has been changingand evolving ever since and so is ITIL. The below timeline depicts the evolution of ITIL over time.6http://itsm.fwtk.org/History.htmPage 9

Figure 1: ITIL's Evolution2.1.2 ITIL Framework:The ITIL framework helps manage delivery, industrialization, support and consumerization frominception to pullout for every service or product offered by the IT organization. The five volumesof the ITIL framework are:1. Service Strategy: It specifies that, at each phase of the service lifecycle, the focus shouldbe open the business case with well-defined business goals, requirements and servicemanagement principles.2. Service Design: It gives an overview on how a service solution interacts with large businessand technical environments, providing guidance on the production of informationtechnology policies, architectures and policies.Page 10

3. Service Transition: Transition from aservice to business environment is animportant step in ITSM. Thus, changemanagement roles and release practicesare of prime focus in Service Transition.4. Service Operation: The prime focus isthe delivery of best practices to achievethe agreed level of services to both endusers and customers.5. Continual Service Improvement(CSI):It aims to align and re align IT lementingFigure 2: ITIL Frameworkenhancements to the IT services which support business process. The activities of CSI mustbe planned and scheduled to be successful.2.1.3 Benefits of ITIL:ITIL provides a robust framework for identifying, planning, delivering and supporting IT serviceswhich can be applied to all business and organizational environments. Successful adaptation ofITIL can help improve business processes in various ways. Stronger alignment between IT and business Manage business risk and service disruption Improved service delivery and customer satisfaction Reduced costs through improved use of resources Greater visibility of IT costs and assets Supporting business change whilst maintaining a stable service environment Better reliability and quality of serviceThe below image depicts the interdependence of all ITIL processes.Page 11

Figure 3: ITIL Process Management2.2 Service TransitionIT services can be viewed as business assetsbecause IT processes can be perceived as a part ofa lifecycle or a continuum. The main purpose ofservice transition is the maximizing the businessvalue of the organization, manage risk and manageknowledge for decision support for the IT servicesoffered by the organization. Change is the essenceof any organization and is always associated withthe factor of risk. Embracing the change with leasthurdles is the purpose of ITIL service transition. Itpaints a big picture to depict the changes withawareness of potential impact on the rest of the ITFigure 4 : Service Transitionprocesses and business value of the organization. ItPage 12

supports all projects that are in transition and not focus only on a single project. The objectives ofservice transition are as follows: A consistent framework for evaluating the service capability and risk factor before a newor changed service is deployed. Maintaining integrity of the IT processes as they evolve through the transition phase. To ensure that the service can be managed, operated and supported in terms with therequirements and specifications of service design.2.2.1 When is service transition helpful?7 When adding, or changing a service is not simple. When one size does not fit all and the IT team may have to adapt and innovate. When there must be a change to an existing supplier, service or service provider. Servicetransition can help ease the business into the switch. When replacing systems, hardware and applications s more complicated than it appears.Old and new software may not “talk” to each other. People may need retraining, andprocesses may need updating. Each action has its own repercussions and costs. Servicetransition can help predict the effects and cut the risk of failure during the changeover. When the service management capability of an internal or external service providerchanges, service transition can help the organization to adjust and adapt.2.2.2 Service Transition ProcessService transition is characterized by 7 processes. These processes will effectively to moveservices into operation. Each step in the process is important to deliver and support highperforming services.7Best practice Insights BMCPage 13

Transition Planning and SupportService Asset andConfigurationManagementServiceValidation andTestingRelease mentChangeManagementFigure 5 - Service Transition Process1. Transition Planning and SupportDefinition: The process responsible for planning all service transition processes and coordinatingthe resources that they require. These service transition processes are change management, serviceasset and configuration management, release and deployment management, service validation andtesting, change evaluation, and knowledge management.8Goal: The goal of this process is twofold. Firstly, to ensure that all the requirements identifiedduring service strategy, introduced in service design and documented in continual serviceimprovement is achieved through effective planning and resource coordination. Secondly, it is topin point and manage potential risks that might disrupt service or may cause failure during theservice transition phase.Business Benefits: The outcome of this phase will result in increased ability of handling a greatnumber of changes, releases, deployments, less risk and higher degree of success.2. Change ManagementDefinition: The process responsible for controlling the lifecycle of all changes. The primaryobjective of change management is to enable beneficial changes to be made, with minimumdisruption to IT Services. 9 This process will be discussed in detail in the further chapters.89ITIL Glossary 2011ITIL Glossary 2011Page 14

Goal: To produce maximum business value while reducing disruptions. It is designed to avoid oraccept risks when the requirements demand new solutions and services from IT.Business Benefits: All the other lifecycle activities depend on change management to handle therisk of changes. This process helps increase the change success rate and also increase incident andevent management.3. Service Asset and Configuration ManagementDefinition: The process responsible for ensuring that the assets required to deliver services areproperly controlled, and that accurate and reliable information about those assets is available whenand where it is needed. This information includes details of how the assets have been configuredand the relationships between assets.10Goal: The goal of Service asset and configuration management(SACM) is to ensure that the assetsthat are required to deliver services are properly controlled and accurate information about theseassets are readily available.Business Benefit: The savings inherent in the proper management of assets, software licenses andconfigurations can be massive. The SACM processes and knowledge output are crucial to thecontribution of business value.4. Release and Deploy ManagementDefinition: The process responsible for planning, scheduling and controlling the build, test anddeployment of releases, and for delivering new functionality required by the business whileprotecting the integrity of existing services.Goal: The goal of RDM is to deliver services obtained by service design or continual serviceimprovement, through building, testing and providing the capability of resources to deliver theservices based on business stakeholder requirements.Business Benefit: The cost of outages, rework and unplanned work can be dramatically reducedby developing a rational approach through effective RDM.10ITIL Glossary 2011Page 15

5.Service Validation and TestingDefinition: The process responsible for validation and testing of a new or changed IT service.Service validation and testing ensures that the IT service matches its design specification and willmeet the needs of the business.11Goal: The main aim is to provide quality assurance. It also includes testing the service or releaseif it functions reliably.Business Benefit: Services that are tested and validated are more reliable and they help increasethe business value.6. Change EvaluationDefinition: The process responsible for formal assessment of a new or changed IT service to ensurethat risks have been managed and to help determine whether to authorize the change.12Goal: The goal is to evaluate the actual versus the predicted performance of any service change.Business Benefits: Ensuring business value is the heart of the process. The more effectively thechange and the service implementations are evaluated, the better those activities will serve thebusiness.7. Knowledge ManagementDefinition: The process responsible for sharing perspectives, ideas, experience and information,and for ensuring that these are available in the right place and at the right time. The knowledgemanagement process enables informed decisions, and improves efficiency by reducing the need torediscover knowledge.13Goal: The goal of KM is to improve both the quality and availability of critical data, and to enableaccurate management decisions that serve the business. ITIL defines the scope of KM as the entireservice lifecycle.Business Benefit: It enables better service quality through increased IT efficiency along withincreasing the understanding among IT staff of the value of services provided to the business.Knowledge management keeps the company’s intellectual property separate from that ofcompetitors and outside service providers.11ITIL Glossary 2011ITIL Glossary 201113ITIL Glossary 201112Page 16

2.3 People Management through service transitionsThe essential activities of service transition are two-fold. First one is to manage the communicationand secondly, it is to manage the organizational and stakeholder change. According to ITIL servicetransition, early business support should be provided for the proposed transition. Also, accordingto most of the CIO’s there must be an equal balance between the enabling technology, process andthe people to reap maximum benefits for the business value. It is strongly emphasized that withoutthe support of the people in the organization, no changes can be implemented. To smoothen theprocess of service transition and implementing change, communication with people in theorganization is a key driver. The following points can be employed to ensure the same. Leadership team which embraces change Planning in a way that supports adoption of change in an organization Capability and knowledge enhancement Metrics that can be used to manage and measure the process Feedback managementBy employing these valuable factors throughout the lifecycle, changes can be implemented andthrough this maximum business value can be extracted.2.4 Technology ConsiderationsTechnology is an integral part of the service transition phase. It supports the transition process intwo important ways:1. Supporting tools that affect the entire service lifecycle2. Supporting the service transition part of the lifecycle and smaller elementsThe tools that affect the entire service lifecycle forms the first main category of systems supportingservice transition. Examples of such systems are IT service management system and dashboards. IT service management system(ITSM): To have a dependable, technology-driven servicewhich meets business demands, IT organizations should have in place integratedmanagement processes. An ITSM solution that integrates with ITIL processes and has aneffective service management suite with CMDB, workflow platform and user interface willfoster the business in extracting maximum value. This unified approach provides proactivePage 17

and continual improvement of service availability, quality, and cost-effectiveness incomplex enterprise environments.14 Dashboards: An interactive, real-time access to service support metrics is provided by theemployment of a dashboard solution. This enables IT management to optimize decisionsand accelerate IT’s alignment with business goals. Dashboards enable a cross-functionalview of IT and supports customizable and role based view for KPI’s.The second category of IT systems that provide solutions which support service transition includesthe service management tools and technology to perform data mining, database management,release and deployment, publishing and more.2.4.1 Interdependence and automation of processesToday’s workplace is an interdependent environment with organizations going global and peoplesharing calendars, exchanging emails and using technology in many ways that increasecollaboration and productivity. Data-to-Information-to-Knowledge-to-Wisdom (DIKW) model isessential for decision making process and this must be architected in service knowledgemanagement system (SKMS) fashion to enable stakeholder collaboration using the same datasources from configuration management database (CMDB) or configuration management system(CMS).An effective system should include automating and controlling service management businessprocesses as well as requesting centric, workflow based architecture. It should also include prebuilt modules for notifications, escalations and ability to track business activity to measurebusiness process performance.2.4.2 Configuration Management SystemAccording to ITIL, an effective way to track the characteristics and history of each configurationitem is to use the software Configuration Management System (CMS). CMS can be fullyautomated and this may require integrating several tools.14Best practice Insights BMCPage 18

Figure 5 describes a sample service knowledge management system (SKMS). CMS is a part ofthis SKMS system and this figure incorporates the Data-to-Information-to-Knowledge-to-Wisdom(DIKW) model.Various IT management tool and databases, such as an asset database, a change managementsystem, or a CMDB may be included in a CMS. CMDB is the heart of a CMS system which actsas a core database that powers the complete CMS system. CMDB acts as a repository ofinformation related to all components associated across all IT environments. The CMDB providesa single point of reference, making it the definitive reference mechanism for all IT decisions.15 Byensuring that all IT management applications have access to IT configuration data, SKMS canprovide an insight that is essential to improve business decision-making.2.4.3 Release and Deployment TechnologyRelease and deployment technology reduces both desktop administration and server configurationcosts, and improves risk management and employee productivity. Look for a policy-based solutionthat automates software discovery, packaging, provisioning, configuration, patching, and repair.A comprehensive release and deployment solution enables less dependency on multiple softwaredistribution tools.16 Figure 6 illustrates and describes how release and deployment technologiesprovision a new service. Release and deployment technology is often called as service automationor service provisioning.1516Best practice Insights BMCBest practice Insights BMCPage 19

Figure 6: Service Knowledge Management SystemFigure 7: Provisioning new servicePage 20

2.5 Implementing Service TransitionThe ITIL Continual Service Improvement publication provides guidance on the challenges thatwill be faced when figuring out what business benefits can be delivered by managing discreteactivities as a lifecycle.Many IT organizations have difficulty estimating how much time they spend to transition a serviceinto production and then to keep the service up and running. One reason for this is that largeservices are often developed and run as a project from external consultants. Then it’s the job of thetransition team to roll that service into operation.17There are 2 approaches to handle this in the IT sector: firefighting and fire prevention Simple processes can be employed to reduce chaos in the firefighting method. A reliableand good reactive change management process is a crucial to reducing chaos and gettingthe fire under control. But to do so, the operations of incident and problem managementmust be integrated with change management. When this integration is achieved, theproactive approach of fire prevention can be started. Being proactive in the sense, identifying weakness in the infrastructure before they causeservice outages is the key to plan and implement service transition. Having an effectivechange management system can help prevent unplanned outages. About 60-80% of allunplanned outages are caused by badly conceived changes. By implementing this process,even companies with minimal budget can be benefitted. Step by step, the organizationshould be able to put out the fire and start preventing them. When return oninvestment(ROI) is visible, it gets easier to justify the investment in change management.17Best practice Insights BMCPage 21

CHAPTER 3 - CHANGE MANAGEMENT IN ITAs discussed in the previous chapter, changes are strategic, prudent or operational. Within thisscope, they can either be reactive or proactive. A proactive change is made to seek benefits orvalue to the business such as avoiding risk. The intent of a reactive change is to correct animmediate situation which would impact the business in terms of quality of service and experience.With this background, we can define two important terms that are important to understand theprocess of change and service transition. Change Management: The process responsible for controlling the lifecycle of all changes.The primary objective of change management is to enable beneficial changes to be made,with minimum disruption to IT Services.18 Request of Change(RFC): A formal proposal for a change to be made. An RFC includesdetails of the proposed change, and may be recorded on paper or electronically. The termRFC is often misused to mean a change record, or the change itself.19Several analysts and IT think tanks have claimed that a weak change management system can leadto high volumes of urgent and unplanned work. Mistakes and oversights causing disruption to thebusiness and service provided could also be one of the altercation for not having an efficient changemanagement process. Managing change effectively will increase and enable business continuity,operational value and reduced risk. An efficient change management system ensures that thechanges to the environment goes through a proper approval and post-review process. This aids inreducing the risk to ongoing operations.3.1 Change Management ConceptsRelease and Deploy management(RDM) and Service asset and configuration management(SACM) should be integrated with each other. The benefits of doing so include balancing releaseand change activities with managing configurations and understanding the potential impact ofactivities before they are even started. In change management, each task is associated with tasksthat occur either sequentially or in parallel and these tas

3.4 ITIL Change Management Process 25 3.5 Change Advisory Board 29 3.6 Change Management KPI's 31 CHAPTER 4 - EMPIRICAL ANALYSIS 32 . 4.4.1 Process Goals 40 4.4.2 Change Management Process Flow 40 4.4.3 Nature of Change Requests 49 4.4.4 KPI's for Change Management 50 4.4.5 Change Management Tools 50 4.5 Roles and Responsibilities 53 .

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