Managing Change and Innovations

8/2/2019 Managing Change and Innovations

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MANAGING CHANGE ANDINNOVATIONS

AIR ASTANA. ERP

IMPLEMENTATION


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What is Organizational Change?

organizational change is themovement of an organization fromits current state to some future andhopefully more effective state.

Pierce, Gardener and Dunham, 2002


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First-order/Second-orderchanges

First-order change

- adjustment in system, processes, or

structures, but it does not involvefundamental change in strategy, corevalues, or corporate identity.

Second-order change

- transformational, radical, andfundamentally alters the organizationat its core.


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Hybrid types of change

Sociotechnical changes

- changes in people and technology

Technostructural changes

- concurrent changes in organizational

technology and structure


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Resistance to change

Fear of failure

Creatures of habit

No obvious need

Loss of control Concern about support system

Unwillingness to learn

Fear that the new way may not be better Fear of the unknown

Fear of personal impact


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Pressures for change

Environmental

Fashionpressure

Mandated

pressure Geopolitical

pressure

Hyper

competition Reputation and

credibility

Organizational

Growth pressure

Integration andcollaboration

Identity

pressure

New broom

pressure

Power and

political pressure


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Strategies for successfulimplementation

Project championship

Training

Communication of systemfeatures and benefits

Communication of new business

processes and organizationalstructure

Rewards and incentives


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AIR ASTANA

National airline Established in 2001 First flight- 15th May,

2002- Almaty-Astana

Operates domestically/internationally Shareholders:- Samuryk-Kazyna-

51%

- BAE Systems PLC- 49%


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Domestic routes


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International routes


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Mission

We will provide profitable domesticand international air services to thehighest standards of air safety and

customer service, in order to serveand compliment the needs of theRepublic of Kazakhstan.


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ERP-system

ERP system is a set of businessapplications or modules, which linksvarious business units of an

organization such as financial,accounting, manufacturing, andhuman resources into a tightlyintegrated single system with a

common platform for flow ofinformation across the entirebusiness.


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President of Air Astana aboutERP

necessary step for further

development of the company

When the company was at the

initial stage of development andwas not so big, it was enough forthe company to use less complexoperational system (OS). Now asthe company become bigger andincreased its operations thecollaboration between thedepartments become morecomplex

Peter Foster


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Why do we need ERP?

Staff: 3500employees

In 2010 served 2.35

million passengers Fleet of 26 Westernaircrafts

Further expand the

fleet up to 34 aircraftby 2016 and up to 43aircraft by 2020


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ERP-implementation

2007- Top-management began tothink of the ERP-system

2009- study of available solutions

2009- Tender to choose the providerof ERP-system

Winner- BAS- KZ company-platinum partner of Oracle


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System implementationframework


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Objectives of ERP implementation

Integrated system

Collaborating all functional operations

Increase the level of effectiveness,performance, production

Improve availability and accuracy of managementdata

Comply with Samuryk-Kazyna directions andprinciples of corporate management

Improvement of operational clearness, control andforecasting

Eliminate current systems limitations (in-usesystems)


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Actions before implementation

2007-2008 study of in-useprocesses and reorganization

2009 investigation of availablesolutions

January-February, 2010- Tender

March, 2010- project introduction


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Stages of implementation


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ERP implementation

Completion in 9 month

Project team- Air Astana & BAS members

Meetings with the President of Airline and

Vice President of IT department were heldon Fridays every week

At the end of implementation process the

specialists of Oracle audited the project,as it was contacted by Air Astana at thebeginning of the project


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It was not the introduction of theERP-system from the ground up, butreplacing of the existing fragmentedsystem to a new and modern system,the project was a complex

integration of different parts of theIS, which previously operated in theairline.

Valerii Lanovenko,

Head of the Oracle CIS


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Key principles in implementation process

Concentrate on leading experience

Completely involve end-users andinterested parties

Balanced integration and settings

Be ready for changes in current

business processes


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Success factors

Top managementsupport

Business case

Changemanagement

Project management

Training


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Oracle methods

Focus on best practice

Participation of top-management

Training technique-education at an early stage

-colleague training


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Effective communication

Competent projects team work, properplanning and adaptation to unexpected

situations, a clear definition of roles,responsibilities and objectives were theguarantee that the large-scale project wasimplemented in nine months. Mutualunderstanding between business usersand implementing team has played a key

role along with the support of top-management of all three parties.

Medet Rakhimbayev,

Chairman of the Board of Directors of BAS


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Problems

No communication among workers

ex: any problem, direct call to ITdepartment

Difficult to shift to new

systemex: previously- Excel


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Risk factors in ERP-system

S i f lli i k


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Strategies for controlling riskfactors in enterprise-wide/ERP

projects


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ERP in Kazakhstan

First implementation of the system wasprojected in 2006 inExploration&Production Kaz Munai Gaz

Top companies:-Kazakhstan National Bank

-KazakTeleCom

-Kazkahstan Temir Zholy-Astana Finance and others


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Fashion pressure-Technological pressure


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Internal pressures

The need for integration andcollaboration

Growing number of passengers

Increase in flight routes

Staff expansion


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Power pressure

The idea of implementing ERP-system first came from shareholderSamruk-Kazyna as Peter Foster

noted in his speech to mass media


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Organization Development(OD)

problem identification

consultation with an OD practitioner

data gathering and problem

diagnosis feedback

joint problem diagnosis

joint action planning change actions

further data gathering


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OD intervention process


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Successful implementation is first of all aprofessional team, which participated in theproject. We constantly invest in training our

staff.

Oksana Borisova,

executive director of BAS

Given the high level of complexity, the

project in Air Astana is an example ofsuccessful implementation of ERP-system,not only in CIS, but also in the world.

Valeriy Lanovenko,

Head of the Oracle CIS


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It's not the strongestof the species thatsurvives, nor the

most intelligent, butthe one mostresponsive to

change

Charles Darwin


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Thank you

Documents

Managing Change and Innovations