Importance of SWOT Analysis and Cost-Benefit Analysis - Essay Example

Executive Summary Change management is an integral part of every business process. Every business needs to keep abreast with the changes which are seen in the case where the business has to encounter these changes to get new contract. The report looks into change management to secure a contract of 41 million. The report highlights the reasons for change. Then a SWOT is conducted to gauge whether the change will be effective. To strengthen the cause a cost benefit analysis is done which favors change. The barriers to change and the method they will be dealt with is discussed. The report then concentrates on the plan of implementation by laying stress to education plan, communication plan and evaluation plan. The overall work in the report highlights that bringing the necessary change will help the organization in the future as well as secure the $1 million contract. Contents Introduction 3 Purpose of the report 3 Need for change 3 SWOT Analysis 4 Cost Benefit Analysis 6 Barriers to change 7 Change Management Project Plan 8 Communication Plan 10 Evaluation Plan 11 Conclusion 12 References 13 Introduction Change management is an integral part of every business process. Every business needs to keep abreast with the changes which are seen in the case where the business has to encounter these changes to get new contract. This report thereby looks into the changes from different perspective by concentrating on the cost benefit analysis, the barriers to change, the action plan, the communication and the evaluation plan. This will thus help the business to secure a new client and will help the business to grow and compete with the fast growing competitors. Purpose of the report To identify the need for change for the company To conduct a SWOT analysis which highlights the reason for change To identify the resistance to change and the cost benefit analysis associated with it To develop a management change plan, communication plan and evaluation plan which will help to determine the objective and achieve the new project Need for change The case highlights that the organization needs to change by implementing a new IT solution (SAS) so that the company is able to secure a contract of $1 million. The need for change is based on the following evidence Firstly, the effect of global crisis has been severe as it has reduced the consumer confidence which is reflected in depleting sales by 50%. This is having a an overall bearing on the profits and is hampering the company. Secondly, the competitors have been able to increase their market share through price reduction mechanism which has hampered the growth and eroded some profit. This is making the company look towards improving the process so that it is able to regain the lost ground. Thirdly, the company is about to receive a new contract for $ 1 million if it upgrades its technology. The contract has a clause which makes it mandatory to upgrade to the changes so that execution is proper. Lastly, the technology used is becoming obsolete so the company might lose vital customers in the next 2 – 3 years if it doesn’t change. This is making the organization to think in line for a change. SWOT Analysis The SWOT analysis for the organization helps to identify areas which the company needs to work upon so that their performance improves and the organization is able to get more orders. The SWOT analysis is Strength The organization has a good brand image which is depicted from the fact that a new order of $1 million has been provided showing that the company has a good name. The organization has a pool of staff who have a long association with the company and recognizes themselves with the organization The willingness of the employees and acceptability to change will help to implement the changes easily Weakness The organization faces threats from the competitors who are following the policy of price war and reducing prices continuously is luring customers away from the organization The system in place to carry the daily work is old and out dated creating problems to secure new orders The organization has not been able to offer products which enhance value of the customer which has resulted in depleting profits and sales Opportunities To secure a contract of $1 million by upgrading their IT system which could act as a benefit in the long run Providing training to the staff so that they are able to retain the same employees who have been loyal and look towards the wellbeing of the organization Look towards way to improve the technology up gradation which will help the organization in the near future Threats The organization faces threats from new entrants with better and varied product and services The chances of closure if the organization doesn’t bring the necessary changes in technology Cost Benefit Analysis A look at the cost benefit analysis will help to understand the manner in which the organization can benefit from the technology up gradation and the growth potential the company will have hence. It is seen that the cost of new SAS is $50,000. The training cost associated with using the new technology is $ 10,000. This makes the total cost to be $ 60,000. . The additional cost estimated is $ 5000. This makes the total cost to be $ 65,000. The company expects that the new contract will fetch them $ 1,000,000. Considering a profit margin of 40% we see that the profits that will accrue are $400,000 Thus even using the above figures we see that the company is able to achieve a profit of $ 335,000. Thus we see that the new contract provides a potential for some earning. A look at a more rigorous analysis shows that if the company is able to earn at least 6.5% of the new contract it will incur no losses. Any profit percentage below this will be loss and greater will be profit. This thereby shows the potential this technology will have. Barriers to change The organization looking towards integrating the new technology faces barriers from different quarters which needs to be watched out so that the changes in technology passes without any hurdles. The barriers are The organization faces obstacle from the employees who might resist the changes as it means that the employee will have to change in the working procedure. (Albert, 2010) This will require training both on and off the job. The organization would also face hurdle during the implementation of the new technology. (Kotelnikov V, 2010) Since, it a new technology upgrading will take time and to understand every little aspect will be difficult which will raise voices from different quarters Another barrier could be the difficulty in making employees understands that they won’t be fired and would be placed under some other area where they are suitable. (Dargan, 2009) This will raise restrain as employees would not be ready to change Another barrier could be the delay in the process which would delay the contract to be executed thereby having a risk of being cancelled. Time frame needs to be prepared so that the change is accomplished within the time frame. The organization needs to watch out for this barriers and solving the problems associated with the above barriers will help the change process pass easily. Change Management Project Plan One of the most important strategies for the organization is to ensure that the change management project plan passes without any hurdles. To ensure this the following needs to be done Setting objectives: The organization need to set the objectives they intend to achieve with the new SAS and the time frame for the same. It is as Implementing the SAS within 3 months to be in fully operational condition Training the employee both on and off the job within the period of implementation i.e. 3 month Increase profitability by 10% as the new system is more efficient Launch new products which increase consumer attractiveness and competes with the competitors Strategy for change: The organization need to ensure that the new SAS which replaces the old one adheres to the time frame, is quick and helps to solve multiple problems and benefits in a number of ways IT provider: The organization needs to enter into an agreement with a service provider. This will help in implementation of SAS. Also attention should be laid to ensure that all terms and time frames are sorted out while entering into contract Allocating Resources: The organization needs to allocate the resources and it is in the following manner Train employees, managers, technicians and others associated with the job during the implementation period which is 3 months Allocate the funds for each like $50,000 to purchase SAS $10,000 on training and implementation of SAS $5,000 to develop new procedures Develop communication plan: The organization needs to develop a communication plan and implement it. This will be done in the initial phase and will be completed in about 2 week’s time Develop Education plan: The organization needs to develop an education plan and implement it. The planning process will start early as week 1 but will be implemented after the communication plan i.e. week 4 and will take around 3 weeks making it 7 weeks in all Develop reward programs: The organization needs to develop this as it is a new procedure which will require motivation. The work on this will start after week 7 and will be implemented then. New IT implementation: The system will be in place and start to work after 3 months which includes the trial run Finally, having the evaluation plan to gauge the effectiveness of the system Communication & Education Plan A communication plan forms an important part of the overall plan and is “written documents explaining the objectives, the way to reach there and fixing of responsibilities of employees”. (Mayhall, 2010) The plan is as under Firstly, the management needs to communicate clearly about the change program and what is expected out of the employees. There should be clarity in it Secondly, ensure that proper training both on and off the job is provided on a continuous basis so that SAS works properly in the future Thirdly, allocating responsibilities to all employees for example employees who work on the machine has to do hat, responsibilities of technician and coaches and so on. This will be done in the following way Time frame and tool A formal meeting should be conducted and all points be discussed. This should be informed to all employees within a period of 1 week Providing time to the employees to sort out their queries and replying to the same should be over within 2 weeks Hold another meeting finally confirming the changes and sent a newsletter confirming the same to be completed in 3 weeks Implement training which will be conducted for a period of 1 month and will end at week 7 Within this time frame ensure that there are regular feedbacks and queries are solved will help to ensure that the tool and time frame is adhered to Fourthly, implementing the rewards and motivational tool Finally, having an evaluative plan to gauge the efficiency of the SAS and system Evaluation Plan Evaluation forms an important aspect as “it will help to check the effectiveness and efficiency of the whole system”. (Evaluation Plan, 2010) The following is the evaluation plan Review the communication plan after 1 week Review the educational plan after 2 week Develop tools for monitoring after week 3 Evaluate the employee on different parameters to gauge the effectives which will be done during week 4, 5, 6 and 7 Review deadlines after every week and especially after 6 weeks as the implementation date is near Make the necessary changes as and when required especially while allocating resources Hold regular meeting with the IT provider after 4 weeks Have an audit system in place to look after the expenses after 6 weeks Make regular correction to the plan Have a continuous program to improve efficiency after week 12 Conclusion Organization will thus be able to achieve the contract of $ 1 million if it follows the above strategy and will build the organization for the future as well. This will strengthen the overall working of the organization and will help them face stiffer competition in the future. References Albert F, (2010), “Employee Resistance to Organizational Change”, Winthrop University Dragan, (2009), “Factors that causes resistance to organizational change”, Word Press Evaluation Plan, (2010), “Evaluation Plan”, available at www.learnersassociate.net (Accessed October 7, 2010) Kotelnikov V, (2010), “Resistance to change”, Ten 3 Business e-coach Mayhall R, (2010), “How to develop a communication plan”, the Ney York Times Company Read More