Capstone Thesis LDR_515 Dodd
-
Upload
peter-dodd -
Category
Documents
-
view
90 -
download
0
Transcript of Capstone Thesis LDR_515 Dodd
Dodd 1
Running head: Dodd
MBA 18-Week Project in Change Management
Peter Dodd
University of Phoenix
LDR/515
Niraj Kohli
June 12 , 2006
Dodd 2
Table of Contents Page 2
Executive Summary Page 3
Introduction Page 4
Initiatives Page 4
Use Cases Page 5
User Interface Page 7
Internal Staff Impact Page 8
Technology Project Plan Page 9
Databases Page 9
Programming Page 9
Networks Page 10
Use Case Benefit Page 10
Stakeholder Impact Page 10
Risk and Mitigation Page 11
Projected Cost Savings Page 11
Sensitivity Analysis Page 12
Outcomes Measurements Page 13
Models and Theory of Change Page 13
Systems Thinking and Change Management Page 16
Future Change Management Page 17
Executive Summary Page 17
Resource Constrains and Strategies for Mitigation Page 18
Ethical Impact Page 19
References Page 20
Dodd 3
Executive Summary
The following proposal contains justification for two initiatives designed to give
Wells Fargo Bank a competitive advantage over its competitors. In the event it is
determined that the current E-Business functions are no longer ‘cutting edge’ or cost-
effective, Wells Fargo Management is encouraged to adopt the following strategies. The
proposal will define each initiative and provide rationale supporting selection and
implementation of these initiatives. Additional justification for acceptance of this
proposal will be included in the form of Use Cases, a Technology Plan, discussion of
Change Theory Models, Recommendations to lead implementation of these changes and
a plan for sustaining these changes. As a conclusion, I will outline the impact these
initiatives may have on our internal staff and customers.
Dodd 4
Introduction
The following proposal contains justification for two initiatives designed to give
Wells Fargo Bank a competitive advantage over its competitors. In the event it is
determined that the current E-Business functions are no longer ‘cutting edge’ or cost-
effective, Wells Fargo Management is encouraged to adopt the following strategies. The
proposal will define each initiative and provide rationale supporting selection and
implementation of these initiatives. Additional justification for acceptance of this
proposal will be included in the form of Use Cases, a Technology Plan, discussion of
Change Theory Models, Recommendations to lead implementation of these changes and
a plan for sustaining these changes. As a conclusion, I will outline the impact these
initiatives may have on our internal staff and customers.
Initiatives
The first proposed initiative is to add “real-time” customer support via Instant
Messaging (IM) for visitors to the Wells Fargo website. The rationale behind real-time
customer support is to allow registered visitors an exclusive channel of communication
with the Bank in the event they have questions about their checking or savings accounts
which cannot be easily answered with information contained on the website. If
implemented, IM communication will allow Wells Fargo service agents the opportunity
to answer a diverse array of customer questions while the customer is navigating through
the Bank’s website.
Implementation of IM communication will lead to a reduction in operating costs
by reducing the number of telephone inquiries and the number of service agents required
Dodd 5
to answer those calls. Based on a monthly contact rate of 2.1 million inquiries,
Operational savings may be achieved if IM requests account for 30% of total monthly
volume within 12 months, the current monthly contact rate does not increase and the
number of existing customer service agents is reduced by 25% for the same 12-month
period.
The second proposed initiative is to add an exclusive area within the website for
registered visitors maintaining a high-value relationship with the Bank or those that wish
to establish a high-value relationship with the Bank. The rationale behind selection of
this initiative is to encourage use of our website by high-value customers and to reward
them (high-value customers) with perks if their deposit account balances exceed a certain
monetary threshold. Operational excellence will be achieved if the Bank realizes an
increase of at least 35% in the total relationship balance of its High-Value Customer
portfolio in an 18-month period.
Each of these initiatives represents a cutting-edge enhancement because neither of
these services is currently offered by the Bank’s primary competition. If Wells Fargo
implements these initiatives before either Bank of America or Chase Bank, these services
will offer wells Fargo brand identification in the minds of consumers.
Use Cases
Each use case provides “one or more scenarios that convey how the system
should interact with the end user or another system to achieve a specific business goal”
(Wikipedia, 2006).
Dodd 6
The use case for real-time support includes the steps of accessing the Wells Fargo
website, registering as a user, navigating the site using hyperlinks, determining the need
for support, requesting support and interacting with support personnel. Customers and
service agents will each need IM software installed on their PC’s. This software will be
licensed and wholly owned by Wells Fargo. IM Software will be provided free of charge
to customers who request and download the product through the website. If
implemented, the Bank will work with existing IM developers to customize the
version available to customers. A focus on mobil technology is encouraged.
The use case for an exclusive area for high-value customers will include all steps
required to receive online support as well as, user self-selection/registration as a high-
value customer, preference selection/enabling of advanced features, use of advanced
features and preferred placement on a waiting list for real-time online support. Customers
will need a computer with an Internet connection to access the Wells Fargo online
website. Customers may access the Wells Fargo website from a computer in one of the
Bank’s branches or any location worldwide. The Bank will support both dial-up and
high-speed cable modem/DSL connection speeds for website users. Once customers have
accessed the website, their computer must possess a minimum level of speed and
available memory to use our features. Customers will have the option of registering
existing accounts for online viewing, requesting a new account be opened, viewing
general information about the Bank or applying for a Wells Fargo job while on the
website.
Dodd 7
Online account registration will require that the customer enter specific,
confidential information about themselves and their account(s). Customers who choose
not to register their accounts will not be required to enter any confidential information but
will not be allowed access to real-time support or the exclusive high-value area.
While navigating the website, customers will be guided by online menus. By
selecting a menu item, customers will be taken to a specific area within the website. In
the event account information is not available at the level of detail required by the
customer, they will be given the option to click a button and request an online assistant
with which they may converse by typing questions into their computer. Currently,
visitors to the website only have the option of calling the service center on the phone if
they have questions.
While conversing with an online assistant, users will still be able to navigate the
Website. This will allow users the opportunity to execute instructions provided by
customer service agents. Access to confidential account information and conversations
with online support personnel will need to be carried out on a secure link-up to avoid
fraud, loss of confidential information or system intrusion.
User Interface
In addition to the basic systemic requirements needed by non-exclusive
customers, exclusive customers would need to be able to download information into
financial software, such as Quicken or Microsoft Money. These customers would be
allowed the ability to set up an email account on the Wells Fargo servers similar to the
service provided by Yahoo or Hotmail. The exclusive area of the Wells Fargo website
Dodd 8
will need to have a different color-scheme and look to underscore the exclusivity of
membership to this area.
Along with access to special features and email accounts, exclusive members will
have the opportunity to execute trades on financial markets as a fee-based service and
will be placed at the front of the waiting line for requests of help from our online support
personnel.
Similar to the warehouse clubs that offer extended service hours for their business
members, the exclusive area of Wells Fargo’s website will be available at all times. The
normal area of the website goes down for maintenance periodically. Unlimited access
to the exclusive website area will be created by the Bank through dedication of additional
servers.
Customer training for both website enhancements can be facilitated in Bank
branches as ‘how-to’ seminars. This will allow an opportunity for recruitment of new
customers as well as offering personalized services that exceed the ability of the
competition.
Internal Staff Impact
If these proposals are brought to fruition, there will be a significant impact on the
Bank’s internal staff. Staffers who contact customers as online support will need
familiarity with site functionality. As enhancements are made, ongoing training will be
required. As such, the Bank will need staffers who are eager to learn and continue to
gain knowledge. In addition to placing an additional burden on existing staff, there is a
very real possibility that the Bank can reduce operating expenses by ‘off-shoring’ the
Dodd 9
jobs of online support personnel. This makes financial sense because the lower salary
costs may help reduce the expense of implementation for these two initiatives.
Technology Project Plan
The Technology Project Plan for the proposed service enhancements include
expanded databases, programming requirements and network configuration. Each
solution calls for both hardware and software upgrades internally and externally.
Databases
In order to provide real-time contact with visitors to the website, the Bank needs
to add information to existing databases. Currently, these databases include customer
account information consisting of names, addresses, account numbers and purchasing
histories. If a real-time interface with service personnel is offered each customer needs
an IM address, IP Address and an IM communication tool. If an area is created within
the website for the exclusive use of existing high value clients, databases will need to be
expanded to include qualifying information, such as current balance, ancillary financial
relationships and frequency of use.
For both initiatives, the Bank needs to either build or buy a database that
interfaces with the existing database infrastructure. If accepted, this step would require
additional use-case analysis to determine which option would be more cost effective.
Programming
In addition to expanding our database capabilities, the Bank would need to
conduct the progr5amming steps requir4ed to allow legacy systems to communicate with
new software. We would model these programming tasks on our past successful
Dodd 10
combination of Norwest Bank and Wells Fargo Bank merger tasks.
Networks
Networking configuration would need to be modified to allow customer service
agents the opportunity to view the key strokes and screens utilized by website visitors.
This would allow our internal network to communicate with the external internet as well
as allow us to communicate with other business’s intranets in the event customers contact
us from their work PC. Our solution design would take into account as many variables as
our use case research is able to uncover.
Use Case Benefit
The benefit of use case application will be to uncover the needs of our
development staff so they can design an interface that gives customers a confident feeling
when visiting our website and utilizing these enhancements. As we conduct our analysis,
we will seek input from each stakeholder to determine their needs. Participant
stakeholders will include customer service staff, trainers for internal/external users,
content developers, computer programmers, online security coordinators and the human
resources department. Gaining information from these groups will benefit the
organization by combining the needs of each group into a product that meets as many
needs as possible.
Stakeholder Impact
The stakeholders that are impacted will include each group surveyed in the use
case analysis as well as our branch banking locations. The branches will be impacted
Dodd 11
significantly because their primary task will be to educate external customers regarding
the ease and convenience of online banking.
Risks and Mitigation
The business risks we face include leading our competitors to an untapped
marketplace. If we are successful providing real-time online service and establishing and
exclusive area on our website, out competition may try to emulate our practices. To
mitigate this risk we must continuously plan improvements for each of these added
services. By doing this, we can maintain the momentum we enjoy during roll-out and
stay steps ahead of anyone who attempts to duplicate our products. We will also consider
licensing agreements for others to use our product in the event we are successful and our
competitors are unsuccessful providing these services.
Projected Cost Savings
The estimated costs for full implementation for both of these initiatives are
represented in the following tables. Projected costs include training 1,100 customer
service agents, adding database software, upgrading desktop PC’s/Servers, training our
staff and marketing these services online/in-store and through various media outlets such
as TV/Radio and print:
Dodd 12
Real-Time
Exclusive Area
Human Resources 400000 250000
Hardware(PC and Server) 950000 800000
Software (database and IM) 195000 175000
Training 980000 600000
Marketing100000
0 500000
NPV
The following tables represent the Net Present Value for the expenses outlined
over a 1-year period. All figures are in U.S. Dollars and calculated at a rate of 3 %
annually.
Real-TimeExclusive Area
Human Resources$388,349.5
1 $242,718.45
Hardware(PC and Server)
$873,786.41 $776,699.03
Software (database and IM)
$189,320.39 $169,902.91
Training$951,456.3
1 $582,524.27
Marketing$970,873.7
9 $485,436.89
Source: CCH Business owner’s Toolkit, 2006
Sensitivity Analysis
Each of the projected costs bear the risk of change based on factors within the
economy. Human Resource expenses are sensitive to the availability of skilled labor. If
Dodd 13
there are no skilled employees to hire, the cost for skilled labor will increase. Hardware
is sensitive to the availability of raw manufacturing materials. Items such as plastic,
memory chips and metals may drive these costs up or down. The software cost is based
on an internal development effort. If we face resource shortages when developing
software or if we cannot program efficiently, costs could increase significantly. Training
and marketing costs may fluctuate because we have a finite number of advertising
minutes. If there is high demand for these minutes on radio or TV, the Bank may have to
increase efforts in print media.
Outcome Measurement
The outcomes we will measure o determine success include customer use of our
enhancements, feedback from employees and customers, the number of new accounts we
can book and the profitability of these new accounts. Additionally, we will measure the
rate of return we see on the investments of hardware, software, training and marketing
during the first year of implementation.
Models and Theories of Change
Change Management Theory involves looking at the following principles,
“Reaction of individuals to change, individual needs, loss reconciliation, expectations and
fears” (TeamTechnology, 2006). The impact of these theories on the proposed changes
for Wells Fargo customers will be significant because consumers may fear technology, be
resistant to manipulation of their money through electronic channels and doubt the
integrity of these cost-saving proposals. Only after they have successfully used the new
resources could they begin to trust the benefits of change.
Dodd 14
The critical success factors related to these changes will be consumer acceptance.
As such, the Bank’s investment in training both consumers and employees will be critical
to consumer acceptance. The human implications of the proposed changes will involve
establishing trust in the processes defined as well as trust in the system used to deliver
these enhancements.
The responsibility of Wells Fargo employees consists of gaining as much
knowledge and understanding about the enhanced website portal and online banking tools
as is feasible to project confidence in the products. Leadership within the organization
will carry the responsibility to gain employee and consumer acceptance.
Change Model Application
The proposed changes are included in the Bank’s long-term, large-scale strategies.
The Bank will save money by reducing contact through the telephone and will gain a
Competitive advantage by offering exclusivity for high net-value customers.
For the Bank’s initiatives, John Kotter’s 8 steps of change is appropriate.
Employees will reap a sense of urgency and communicate this to customers. The right
team will be placed to communicate change to the staff. The vision will focus on the
emotional elements of the changes. Communication and Empowerment will be used to
disperse key learning points and execute the change. Short-term wins will be created for
customers as the changes are seen as successful. When financially feasible, the Bank
won’t back off of the proposed changes. The changes will become the industry norm for
online banking.
Dodd 15
The plan for addressing the critical success factors will include measurements of
customer satisfaction and usage. The contingency strategy for managing resistance to the
changes will be to gradually phase-out the existing telephone contact interface. This will
allow consumers and employees an transition period until the changes are widely
accepted.
The leadership behaviors required to keep momentum moving will be a two-way
flow of ideas from customers to the Bank and from the Bank to customers, internal and
external. As long as each impacted individual feels their opinions are being heard,
momentum will be maintained.
The cultural elements of the Bank include long-time customers and employees
who are resistant to change. By establishing a culture of inclusion and setting online
banking as the convienient alternative to visiting a Bank branch, acceptance will be
achieved.
A continued focus on external education for employees will overcome the
organizational cultural barriers for these changes. Employees will be encouraged to
attend school to learn about technology and in turn, communicate this knowledge to
potential customers.
The post-implementation strategy for ongoing success will be to benchmark Wells
Fargo’s customer enrollment in and usage of online banking tools. This data may be
shared among competitors so the banking industry as a whole can generate consumer
confidence in online banking.
Dodd 16
Systems Thinking and Change Management
With regard to Systems Thinking and Change Management Evaluation, the
following topics will be addressed: application of system logic in decision making,
incorporation of systems thinking in project development, the application of systems
thinking in future change management projects, stakeholder interests and resource
constraints faced as the project moves forward, strategies employed to achieve balance,
the impact of technology on effective managerial decision making and the role of ethics
in the management of change and transition.
Application of Systems Logic
Systems logic implies that all elements of a system must be looked at as logical
components of a system. The two enhancements being proposed involve expanding
existing systems. As such, the components of these systems must be viewed as
interacting with each other. Systems Logic will be applied as this interactivity is
analyzed.
When expanding access to our existing website, it is incumbent upon the design
team to determine logical navigation paths for website visitors. When designing the
website, logic must be considered for a host of components such as, internet connectivity,
power sources, occupancy limits and communication channels for learning.
Project Development
The role of Systems Logic in project development is clear when multiple
components are involved in a system. A full understanding of the function of each
component is necessary before an individual or team can understand the impact of one
Dodd 17
component on the other components of a system. It is only after these impacts are
analyzed that decisions can be made regarding their individual or collective impact on the
system.
When looking at the website enhancements, developers must
consider the human element of the system and the different preferences for learning each
possesses. Learning habits, age, gender, and enculturation all played a role in the end
user’s ability to use these proposed enhancements.
Future Change Management
When looking at the impact of these proposals, it was important to use “common
language to describe complex components” (Agoshkova, 2006a). With regard to future
change management initiatives, this application of and conversion to common language
will be important for two reasons; end users may have never been exposed to the high –
level technological backbone of either system and common language will ease user’s
intimidation at impending change and it will be easier to translate common language into
languages other than English for training purposes.
Stake Holder Interests
The primary stake holders for each enhancement are the customers of Wells Fargo
Bank. The changes and enhancements to these systems should have a minimal impact on
these stake holder’s time and should be easily understood so they are not rejected or
under utilized. Secondary stake holders include Wells Fargo employees and investors.
Employees must understand these enhancements so they can communicate to the
customers. Investors must see value created by these enhancements in order to realize an
Dodd 18
increased return on their investment.
Resource Constraints
Resource constraints include time, money and people for each enhancement.
Timelines were provided for project completion as well as limits placed on the amount of
money budgeted for each enhancement. Additionally, training for staff members was
allotted during normal working hours. This required a realignment of resources to make
sure that the normal tasks associated with non-enhancement related activities did not go
unattended. The proposed website enhancements were given an even lower level of
financial latitude because they used existing technological infrastructures. Checkpoints
for the effectiveness of each enhancement have been designed to measure increases in
customer activity.
Strategies for Mitigating Constraints
Each of the constraints listed was mitigated through analysis of the impact of
exceeding limitations. The primary constrain was money as all labor and time converted
to an actual cost. In order to balance these constraints, input related to saving time and
the amount of resources were considered and applied as appropriate.
Technological Impact
Technology is the basis for each of these enhancements and it assisted the job of
decision-making by bringing all stakeholders closer together. Technology also
eliminated expensive travel for stakeholders to meet as many collaboration sessions were
conducted electronically via Net Meetings or E-mail conferences. Additionally,
technology made training employees and customers a much more streamlined process.
Dodd 19
Because each enhancement relies on presenting cutting-edge technology to the customer,
a forward-looking approach was used to determine systemic requirements.
Ethical Impact
Because each proposed improvements touched the customer on a personal level,
the choice to make these features available created an ethical dilemma. A decision was
made to offer enhanced website access to customers with more money on deposit with
the bank. To offset this dilemma, the decision to offer real time support to those
customers who have minimal balances was made as a strategic option to try to increase
business. Additionally, by reaching out to these existing and prospective customers, the
Bank demonstrates diversity in its business practices.
Dodd 20
References
Agoshkova, Elena B (2006). Systems Thinking in the Twenty-First Century. [Online].
Bank of America (2006) Home. Accessed 3-10-06. Available:
http://www.bankofamerica.com
Businessballs.com (2006). Change management. [Online].
Available: http://www.businessballs.com/changemanagement.htm
Chase Bank (2006) Home. Accessed 3-10-06. Available:
http://www.Chase.com
TeamTechnology.co.uk (2006) Change Management. [Online].
Wellsfargo.com (2006) Glossary: use case. Accessed 3-10-06. Available:
http://www.wellsfargo.com
Wikipedia.com (2006) Glossary: use case. Accessed 3-10-06. Available:
http://en.wikipedia.org/wiki/Use_case