Business Change Issues Essay Example

improved cash flow, and higher labor productivity. However, this implementation is expected to cost CVS over $500 million over five years. As of 2008, CVS's annual revenue was around $80 billion with an income exceeding $2 and ranked 24th on the Fortune 500 list.

The company has around 6,800 pharmacy stores with a total of 6 billion in revenue. All stores will eventually need to be connected to the central system. The company currently employs 190,000 people. The implementation of the ERP will involve training an average of 3 users at each store and over 100 users at the head office. The ERP license costs are estimated to be around $200 million, while implementation and training will cost approximately $300 million. However, cost overruns may occur if the timeline is extended or if more training is required for additional branches.

The company must prioritize planned change management to avoid implementation failures during the roll-out plan, which will follow a schedule to be worked out with SAP. A broad description of the work is being discussed.

The management must handle ground difficulties carefully in implementing change, as resistance is often due to misconception. A change plan should involve top leadership to inspire and ensure smooth transition. Implementation failure can result from lacking change policies. Adoption of new work processes requires meticulous management, as it causes a significant change in the organization and affects every individual and department when a system is installed and implemented.

Three categories of strategies are required for successful management of significant change: Organizational Strategies, Technical Strategies, and People Strategies. Organizational strategies involve developing and deploying a change strategy, utilizing change management techniques, overseeing project

management, modifying organizational structures and resources, adjusting managerial style and thinking, promoting coordination, and emphasizing Information Technologies (Al-Mashari and Zairi 2000). Technical strategies encompass installing enterprise solutions, understanding and explaining complexities, arranging in-house technical capability, as well as managing time and cost (Sarker and Sarker, 2000). People strategies entail training staff, including managing attitudes and behaviors of management (Gable and Stewart 1999).

The responsibility of formulating change policies falls on the management, as implementation teams are not equipped to devise strategies for adoption. Users exhibit resistance towards software due to their perception of it being a risk and a potential threat to their position in the organization. Additionally, they have become accustomed to their current mode of operation which they deem superior to the new system. The failure of implementing change can often be attributed to rumors or misinformation, usually originating from outsiders and breakdowns in communication within management.

Larry Smeltzer (1991) stresses the significance of face-to-face conversations in creating convincing and vital communication between the Change Managers and employees. According to him, using a memo to convey instruction or information is too cold and impersonal, resulting in lean communication.