IT Management: August 2009

Saturday, August 29, 2009

Advantages of ERP Systems\Disadvantages of ERP Systems

Advantages of ERP Systems

There are many advantages of implementing an EPR system; here are a few of them:

A totally integrated system
The ability to streamline different processes and workflows
The ability to easily share data across various departments in an organization
Improved efficiency and productivity levels
Better tracking and forecasting
Lower costs
Improved customer service

Disadvantages of ERP Systems

While advantages usually outweigh disadvantages for most organizations implementing an ERP system, here are some of the most common obstacles experienced:

Usually many obstacles can be prevented if adequate investment is made and adequate training is involved, however, success does depend on skills and the experience of the workforce to quickly adapt to the new system.

Customization in many situations is limited
The need to reengineer business processes
ERP systems can be cost prohibitive to install and run
Technical support can be shoddy
ERP's may be too rigid for specific organizations that are either new or want to move in a new direction in the near future.

Implementation of an ERP System

Implementing an ERP system is not an easy task to achieve, in fact it takes lots of planning, consulting and in most cases 3 months to 1 year +. ERP systems are extraordinary wide in scope and for many larger organizations can be extremely complex. Implementing an ERP system will ultimately require significant changes on staff and work practices. While it may seem reasonable for an in house IT staff to head the project, it is widely advised that ERP implementation consultants be used, due to the fact that consultants are usually more cost effective and are specifically trained in implementing these types of systems.

One of the most important traits that an organization should have when implementing an ERP system is ownership of the project. Because so many changes take place and its broad effect on almost every individual in the organization, it is important to make sure that everyone is on board and will help make the project and using the new ERP system a success.

Usually organizations use ERP vendors or consulting companies to implement their customized ERP system. There are three types of professional services that are provided when implementing an ERP system, they are Consulting, Customization and Support.

Consulting Services - usually consulting services are responsible for the initial stages of ERP implementation, they help an organization go live with their new system, with product training, workflow, improve ERP's use in the specific organization, etc.

Customization Services - Customization services work by extending the use of the new ERP system or changing its use by creating customized interfaces and/or underlying application code. While ERP systems are made for many core routines, there are still some needs that need to be built or customized for an organization.

Support Services- Support services include both support and maintenance of ERP systems. For instance, trouble shooting and assistance with ERP issues.

ERP Improves Productivity

Before ERP systems, each department in an organization would most likely have their own computer system, data and database. Unfortunately, many of these systems would not be able to communicate with one another or need to store or rewrite data to make it possible for cross computer system communication. For instance, the financials of a company were on a separate computer system than the HR system, making it more intensive and complicated to process certain functions.

Once an ERP system is in place, usually all aspects of an organization can work in harmony instead of every single system needing to be compatible with each other. For large organizations, increased productivity and less types of software are a result.

The Ideal ERP System

An ideal ERP system is when a single database is utilized and contains all data for various software modules. These software modules can include:

Manufacturing: Some of the functions include; engineering, capacity, workflow management, quality control, bills of material, manufacturing process, etc.

Financials: Accounts payable, accounts receivable, fixed assets, general ledger and cash management, etc.

Human Resources: Benefits, training, payroll, time and attendance, etc

Supply Chain Management: Inventory, supply chain planning, supplier scheduling, claim processing, order entry, purchasing, etc.

Projects: Costing, billing, activity management, time and expense, etc.

Customer Relationship Management: sales and marketing, service, commissions, customer contact, calls center support, etc.

Data Warehouse: Usually this is a module that can be accessed by an organizations customers, suppliers and employees.

Integration is Key to ERP

Integration is an extremely important part to ERP's. ERP's main goal is to integrate data and processes from all areas of an organization and unify it for easy access and work flow. ERP's usually accomplish integration by creating one single database that employs multiple software modules providing different areas of an organization with various business functions.

Although the ideal configuration would be one ERP system for an entire organization, many larger organizations usually create and ERP system and then build upon the system and external interface for other stand alone systems which might be more powerful and perform better in fulfilling an organizations needs. Usually this type of configuration can be time consuming and does require lots of labor hours.

What is ERP?

ERP stands for Enterprise Resource Planning. ERP is a way to integrate the data and processes of an organization into one single system. Usually ERP systems will have many components including hardware and software, in order to achieve integration, most ERP systems use a unified database to store data for various functions found throughout the organization.

The term ERP originally referred to how a large organization planned to use organizational wide resources. In the past, ERP systems were used in larger more industrial types of companies. However, the use of ERP has changed and is extremely comprehensive, today the term can refer to any type of company, no matter what industry it falls in. In fact, ERP systems are used in almost any type of organization - large or small.

In order for a software system to be considered ERP, it must provide an organization with functionality for two or more systems. While some ERP packages exist that only cover two functions for an organization (QuickBooks: Payroll & Accounting), most ERP systems cover several functions.

Today's ERP systems can cover a wide range of functions and integrate them into one unified database. For instance, functions such as Human Resources, Supply Chain Management, Customer Relations Management, Financials, Manufacturing functions and Warehouse Management functions were all once stand alone software applications, usually housed with their own database and network, today, they can all fit under one umbrella - the ERP system.

What is Sarbanes-Oxley?

The Sarbanes-Oxley Act was signed into law on July 30, 2002 by President Bush, and was approved by the House by a vote of 423-3 and by the Senate 99-0. Sarbanes-Oxley is considered the most significant change to federal securities laws in the United States since the New Deal. Officially titled the Public Company Accounting Reform and Investor Protection Act of 2002, and commonly called SOX and Sarbox, it was named after sponsors Senator Paul Sarbanes (D-MD) and Representative Michael G. Oxley (R-OH) and came as result of a series of corporate financial scandals.

The Sarbanes-Oxley Act is designed to review dated legislative audit requirements to protect investors by improving the accuracy and reliability of corporate disclosures, covering issues such as establishing a public company accounting oversight board, corporate responsibility, auditor independence, and enhanced financial disclosure. The act's major provisions mention that we can name the prohibition on insider trades during pension fund blackout periods, the certification of financial reports by CEOs and CFOs, the public reporting of CEO and CFO compensation and profits, accelerated reporting of trades by insiders, and ban personal loans to any Executive Officer and Director. Basically, the act requires full disclosure on just about everything.

Sarbanes-Oxley requires additional disclosure as well as criminal and civil penalties for securities violations and significantly longer jail sentences and larger fines for corporate executives who knowingly and willfully misstate financial statements. The act also notes the prohibition on audit firms providing extra "value-added" services to their clients, including actuarial services, legal and extra services such as consulting or unrelated to their audit work. The Sarbanes Oxley Act also requires that publicly traded companies furnish independent annual audit reports on the existence and condition of internal controls as they relate to financial reporting.

Other provisions included mention that US companies are now obliged to have an internal audit function, which must be certified by external auditors. The act also grants auditor independence, including outright bans on certain types of work and pre-certification by the company's Audit Committee of all other non-audit work. The Sarbanes-Oxley Act list also requires that information on how significant transactions are initiated, authorized, supported, processed, and reported must be disclosed if this information is requested at any time.

Sarbanes-Oxley allows enough information about the flow of transactions to identify where material misstatements due to error or fraud could occur. There is also information and other implementations and controls designed to prevent or detect fraud, including who performs the controls and the regulated segregation of duties. This act also states how the period-end financial reporting process and controls over safeguarding of assets, reporting the results of management's testing and evaluation must be handled.

The future of The Sarbanes-Oxley Act will depend on businesses' ability to respond to those areas already mentioned by making it a part of every-day business. Deloitte and Touche LLP has released a new publication called "Under Control" where some points on this matter are exposed, such as education and training to reinforce the control environment, clearly articulated roles and responsibilities and assigned accountability, effective and efficient processes for evaluating testing, remediating, monitoring, and reporting on controls, technology to enable compliance, adaptability and flexibility to respond to organizational and regulatory change, and integrated financial and internal control processes. It's clear that the act may need refining in the future, but presently it serves as a protection to investors against those that do not or mistakenly fail to report accurately.

HIPAA, the Health Insurance Portability and Accountability

What is HIPAA?

HIPAA, the Health Insurance Portability and Accountability Act, was enacted by the U.S. Congress in 1996, and became effective July 1, 1997. This act is a grouping of regulations that work to combat waste, fraud, and abuse in health care delivery and health insurance. The intention of the HIPAA is also to improve the effectiveness and efficiency of the health care system, portability and continuity of health insurance coverage in the group and individual markets, as well as the ability to provide consequences to those that do not apply with the regulations explicitly stated within the Act.

The Health Insurance Portability and Accountability Act protects health insurance coverage for workers and their families when they change or lose their jobs. HIPAA also promotes the use of medical savings accounts, improving access to long-term care services and coverage as well as simplifying the administration of health insurance. As federal law, it limits pre-existing condition exclusions and permits special enrollment when certain life or work events occur. The HIPAA prohibits discrimination against employees and dependents based on their health status, and guarantees the availability and renewability of health coverage to certain employees and individuals in general terms, allowing also the portability for group coverage from one carrier to another group carrier.

The regulations require guaranteed issue and renewal of insurance coverage, prohibiting plans from charging individuals higher premiums, co-payments, and/or deductibles based on health status. Pre-existing conditions may not be imposed if group coverage was effective for 12 months and not longer than 63 days elapsed between coverage. If such coverage was for less than 12 months, than pre-existing conditions may be imposed for only that portion of the 12 months that were not covered. The Health Insurance Portability and Accountability Act establishes a maximum of 12 months may be imposed for a pre-existing condition, meaning individuals will not be punished for seeking care for chronic and life long illnesses in the past.

The Act's Administrative Simplification provisions required the establishment of national standards. These standards were set forth for electronic health care transactions, national identifiers for providers, health insurance plans, as well as employers. The Administrative Simplification process also addresses the security and privacy of health data to improve the efficiency and effectiveness of the nation's health care system, encouraging the widespread use of electronic data interchange in health care. The regulations were expanded in 2002 to provide protection for individual medical records. With the new revisions in place, medical records may not be disclosed without written permission of the patient. It is also required that medical records be kept under lock and key and available only on a need-to-know-basis.

Key privacy provisions establish that patients must be able to access their records and correct errors, in addition to being informed of how their personal information will be used. Patient information can only be shared to treat the patient and cannot be used for marketing purposes without their explicit consent. Patients can ask their health insurers and providers to take reasonable steps to ensure that their communications with the patient are confidential, and file formal privacy-related complaints to the Department of Health and Human Services (HHS) Office for Civil Rights. Health insurers and providers must document their privacy procedures so that patients and staff are aware of the policy that will be followed to give the patients the confidentiality that they expect from medical professionals.

What is BS7799?

ISO17799 and BS7799 are security policies and standards procedures. The standard was initially known as a British standard called BS 7799, developed by the British Standards Institution. Later, it became the ISO IEC 17799 standard when it was adopted by the ISO IEC technical committee for international use.

Such a committee is called ISO IEC JTC 1 and is currently responsible for all information regarding technology standards, and the BS7799 refers specifically to Information Security Management Standard formally approved during the year 2000. This standard defines a set of recommended information security management practices, although it is probably better to say the standard is a set of recommendations, as the ISO IEC recommends that you consider each suggestion as you try to improve your information security program, and not view each suggestion as an inflexible obligation to follow.

Depending on your information security needs you may accept or not accept the BS7799 standards. If a particular recommendation helps you to address any important security matter then accept it, otherwise, ignore it. ISO17799 and BS7799 include an open approach to most of the common information issues related to electronic files, data files and software files, and paper documents. Information related to hand written notes, printed materials and photographs, recordings, video recordings and audio recordings, general communications including conversations, telephone conversations, cell phone conversations and face to face conversations, as well as messages such as email messages, fax messages, instant messages, video messages, physical messages, among many other items are considered as definition of the term "information".

Since the information has value and is therefore an asset, it needs to be protected just like any other corporate asset. Information should be protected just as the infrastructure that supports this information, including all the networks, systems, and functions that allow an organization to manage and control its information assets. BS7799 explains what you can do to protect your organization's information assets.

Today, organizations are faced with a wide range of security threats, from equipment failure to human errors, fraud, vandalism, theft, sabotage, flood, fire, and even terrorism in many countries, that is way the information needs to be protected. BS7799 suggests focusing your attention on three main points to guarantee your information security, which are integrity, confidentiality and availability. Integrity refers to the need to protect the completeness and accuracy of the information as well as the methods used to process it. Confidentially refers to the assurance that the information can only be accessed by the people who have the authorization to do so. And availability refers to the guarantee that those who have been authorized to use the information have access to it and all associated assets when needed.

To identify your information security risks and needs, you may need to perform a risk assessment. The best way to truly assess this information is to study any legal requirements as well as determining what your own requirements are to develop or improve your own information security program. B17799 simply tries to help those who inquire improve their information security requirements for overall safety.

The Two Types of SAS70 Reports

It should be noted that there are two different types of SAS 70 reports. The first type commonly referred to as Type I includes an opinion written by the service auditor. Type I reports describe the degree in which the service organization fairly represent its services in regards to controls that have been implemented in operations and its inherent design to achieve objectives set forth.

Type II reports are similar to Type I, however an additional section is added, the additional section includes the service auditor's opinion on how effective controls operated under the defined period during the review (usually the defined period is six month, but can be longer).

You should note that there is a substantial difference between the Type I and Type II reports Type II reports are more through, because the auditors gives an opinion on how effective the controls operated under the defined period of the review. Type I only lists the controls, but Type II tests the efficacy of these controls to reasonably assure that they are working correctly. Because Type II reports require a much more thorough audit they are usually much more expensive.

What is SAS 70?

SAS 70 is an acronym for Statement on Auditing Standard 70; it was developed and is maintained by the AICPA (American Institute of Certified Public Accountants). Specifically, SAS 70 is a "Report on the Processing of Transactions by Service Organizations" where professional standards are set up for a service auditor that audits and assesses internal controls of a service organization. At the end of the audit, the service auditor issues an important report called the "Service Auditor's Report".
SAS 70

A service organization can be defined as a business or entity that provides outsourcing services. These outsourcing services can and in most cases do impact the control environment of customers. Some of the many types of service organizations can be insurance claim processors, data centers, credit processing companies, and clearing houses.

It should be noted that SAS 70 is not a barebones checklist audit; it is an extremely thorough audit that is used chiefly as an authoritative guidance. In today's market, it is a very helpful and substantial audit that shows transparency to the businesses that a service organization works with. In addition, it shows the service organizations prospective clients that the service organization has been thoroughly checked and deemed to have satisfactory controls and safeguards either when hosting specific information or processing information such as data belonging to customers that they do business with.

SAS 70 has grown increasingly popular with the implementation of the Sarbox Act. The Sarbanes-Oxley Act (usually referred to as Sarbox or Sox) adds importance in implementing SAS 70 as an important resource to show the effectiveness of a service organization's internal controls and data security safeguards.

What is DMAIC?

DMAIC is a basic component of the Six Sigma methodology- a way to improve work processes by eliminating defects. The Six Sigma methodology is widely used in many top corporations in the United States and around the world. It is normally defined as a set of practices that improve efficiency and eliminate defects.

Six Sigma has been around for more than 20 years and heavily influenced by TQM (total quality management) and Zero Defect principles. In its methodology, it asserts that in order to achieve high quality manufacturing and business processes, continued efforts must be made to reduce variations.

The Six Sigma system strives to reduce these variations in both business and manufacturing and in order to do so; these processes must be measured, analyzed, controlled and improved upon. In order to improve upon these processes, the Six Sigma system requires sustained commitment from an entire organization - especially from the top echelons to help guide lower rung workers and policies.

It should be noted that the Six Sigma system derives its name from the high quality output that it strives to achieve. Six Sigma refers to a defect level of lower than 3.4 defects per million opportunities. This methodology has saved businesses around the world billions in dollars due to its low defect output. For instance, since 1986, Motorola has stated that the Six Sigma system has saved them $17 billion dollars. Six Sigma is a registered trademark of Motorola Corp.

For those that use the Six Sigma system there are two major methodologies. They include DMAIC and DMADV. In this article DMAIC will be covered. DMAIC was developed by Edwards Deming and is useful in improving an existing business process to reduce defects. The DMAIC methodology includes five steps including; Define, Measure, Analyze, Improve and Control. Here is some information regarding each step.

Define: Define is the first step in the process. In this step, it is important to define specific goals in achieving outcomes that are consistent with both your customer's demands and your own business's strategy. In essence, you are laying down a road map for accomplishment.

Measure: In order to determine whether or not defects have been reduced, you need a base measurement. In this step, accurate measurements must be made and relevant data must be collected so that future comparisons can be measured to determine whether or not defects have been reduced.

Analyze: Analysis is extremely important to determine relationships and the factors of causality. If you are trying to understand how to fix a problem, cause and effect is extremely necessary and must be considered.

Improve: Making improvements or optimizing your processes based on measurements and analysis can ensure that defects are lowered and processes are streamlined.

Control: This is the last step in the DMAIC methodology. Control ensures that any variances stand out and are corrected before they can influence a process negatively causing defects. Controls can be in the form of pilot runs to determine if the processes are capable and then once data is collected, a process can transition into standard production. However, continued measurement and analysis must ensue to keep processes on track and free of defects below the Six Sigma limit.

What is DMADV?

DMADV is one of two major methodologies of the Six Sigma system. The Six Sigma system is a way to improve processes in work and manufacturing and its main goal is to eliminate defects. The Six Sigma methodology has been widely used by many Fortune 500 corporations with amazing results and can be used in small groups to achieve goals or on a corporate level affecting tens of thousands of workers. The short definition of the Six Sigma system is a set of practices that improve efficiency and remove defects.

The Six Sigma system has been around for over 20 years and was built upon the TQM (total quality management) and Zero Defect principles. It strives to achieve high quality manufacturing and business processes by continued efforts to reduce variations.

The major methodology of Six Sigma states that in order to eliminate defects or variations, processes used in both business and manufacturing must be measured, analyzed, controlled and improved upon. In addition, Six Sigma requires a sustained commitment from a small group or an entire organization.

Six Sigma refers to a defect level of lower than 3.4 defects or variations per million opportunities. Its name and actions strive to achieve high quality output. The Six Sigma methodology has been extremely successful throughout the business world and has helped companies save billions of dollars through enhanced productivity and a reduction of defects. The Six Sigma system was originally started by Motorola and is a trademark of the Motorola Corporation.

There are two major methodologies in the Six Sigma system, they are DMAIC and DMADV. In this article, DMADV will be covered. DMADV is an extremely effective way to create a new product or a new process design. This methodology's goals are for its designs to be predictable, and defect free. There are five steps in the DMADV process, they include; Define, Measure, Analyze, Design Details and Verify the Design. Here is some more information regarding each step.

Define: In the first step, you must define the design goals that are both consistent with your customer's demands and your own company's goals.

Measure: In this step, four things should be measured. They include, CTQ's which stand for critical to qualities, production process capability, risk assessments and product capabilities.

Analyze: It is important to use the process of analysis to develop and design better alternatives that can reduce defects. These designs must be evaluated for their inherent capabilities to determine whether the design is the best available or if an alternative can be created which may be better.

Design Details: In this step a design must be optimized to function at its peak. In addition, in order to optimize a design, a design must usually be verified. While verification is the last process, during the design details step, a design plan should be readied for the next step.

Verification: Once a design has been analyzed and tested, it should be verified. Verification usually occurs through pilot runs. As a design is verified through the pilot run, it can be readied for full production.

Downsides of the Six Sigma Methodology

For the vast majority of organizations, the Six Sigma methodology has helped them be competitive and reduce costs; however it should be noted that there are some downsides that do exist.

In order to implement the Six Sigma methodology in an organization, it is extremely important to have buy- in from employees on all levels. If associates, middle managers or high level executives are not enthusiastic about using the Six Sigma Methodology, it can ultimately lead to failure.

Another downside of using Six Sigma is that in some instances, Six Sigma's effectiveness has never been measured or is unable to be measured. Due to the inability of measurements, it is unclear if Six Sigma is actually helpful.

Finally, many organizations use the Six Sigma methodology as a way of protecting themselves from liability. For instance, if a company produces a product that is low in quality or can harm its user, the organization can use the defense that quality is at the forefront in order to be viewed positively. In this respect, it is unclear if an organization has implemented Six Sigma for its methodology or to cover its liability.

Statistics

Statistics is at the core of the Six Sigma methodology. Six Sigma focuses on using data to problem solve and create systematic approaches to lowering deficiencies. Because data is at the core of the Six Sigma methodology, statistical analysis and tools are commonly used. It is important to note that while the Six Sigma methodology is data driven at its core, rudimentary statistical tools and analysis are usually proficient.

Implementation of Roles in Six Sigma Methodology

There are many roles that that are used in the Six Sigma Methodology. While most of the roles below are used in many organizations Six Sigma implementation, it should be noted that they are not universal. The roles include:

Executive Leadership - Top level executives are responsible for vision and ultimately implementation of the Six Sigma Methodology. They also empower others to take initiative and ownership of the Six Sigma principles.

Champions - Champions are usually upper management that is responsible for the implementation of Six Sigma throughout their organization.

Master Black Belts - are usually hand picked by Champions to coach others within the organization on the Six Sigma methodologies. They allocate either all or most of their time to the Six Sigma methodologies. It should also be noted, that they usually have mentoring responsibilities to coach and train lower roles including Black Belts and Green Belts (see below)

Experts - while this role is not in every organization, it can play a huge role in major engineering or manufacturing sectors. They improve overall services, products, and processes for their end customers.

Black Belts - Black Belts focus on six sigma execution. They are usually middle managers.

Green Belts - These roles are usually taken on by employees who help Black belts execute specific projects, as well as other job responsibilities.

The Six Sigma Methodology

The Six Sigma includes two key methodologies; DMAIC and DMADV. DMAIC is used for an existing process. DMADV is used when creating a new product or process. Using DMADV for new projects can usually result in a more predictable process and ultimately higher quality product.

DMAIC

There are 5 important steps included in DMAIC. They are:

D - Define goals to improve the overall process between your company strategy and your customer's demands (can also refer to your group and the groups or individuals that you support)
M - Measure your current processes. Collect relevant data on your current processes and then use this data as a baseline for future comparisons.
A - Analyze your relationship within the process. It is important to understand the relationship to determine factors that can ensure you keep your companies strategy in line with your customers demands.
I - Improve the process. It is important to constantly improve and optimize the process, using analysis and other techniques. One technique that is often used is Design of Experiments. (This is a technique that can help to test a hypothesis, using acceptable experimental design)
C - Control. It is important ensure that you can control and correct any variances avoiding possibly costly defects and loss of quality. Many times pilot runs are set up to study process capability and production transition. These pilot runs can help fine tune or add additional control mechanisms.

DMADV

There are 5 important steps included in DMADV. They are:

D - Define goals that are consistent between your business strategy and customer demands.
M - Measure CTOs (critical to qualities) CTOs consist of production process, capabilities producing a product, the capability of a product and any risk assessments.
A - Analyze and evaluate many different designs, choosing the best design for its overall qualities.
D - Design details. It is important not only to design a product, but optimize the design features. In order to fully optimize a design feature, you may be required to create multiple designs or simulations.
V - Verify the design. Important steps to verifying a design include setting up pilot runs and running a short production. This step also requires you to handover the design to process owners.

What is Six Sigma?

Six Sigma is defined as a type of business improvement methodology. Its main objective is to implement a vigorous process to systematically eliminate defects and inefficiency. It was originally developed by Motorola in the early 1980's and because of its proficiency has become extremely popular in many corporate and small business environments around the world.

Six Sigma's main purpose or objective is to deliver high performance, value and reliability to the customer. It is regarded and used around the world as one of the major themes for TQM (Total Quality Management).

Six Sigma was developed by Bill Smith at Motorola in the early 1980's. It was originally designed for a way to measure defects and to improve overall quality. A major position of Six Sigma is that by using the methodology, it can lower defects to a level of 3.4 DPMO (defects per million opportunities). 3.4 DPMO can also be written as plus or minus six sigma when the centerline spans 12 sigma positions. (Six Sigma comes from a technical term used in statistics)

While originally developed for quality control, Six Sigma is used in many different ways, such as improving communications with customers, employees and shareholders and improving the total process of interaction, communication and product design.

It should be noted that the term "Six Sigma" is a registered trademark, owned by Motorola. According to Motorola, this methodology has saved the company over 17 billion dollars from its inception to 2006.

Organizational Change Management

Organizational change management takes into consideration both the processes and tools that managers use to make changes at an organizational level. Most organizations want change implemented with the least resistance and with the most buy-in as possible. For this to occur, change must be applied with a structured approach so that transition from one type of behavior to another organization wide will be smooth.

Management's Role in the Organizational Change

In most cases, management's first responsibility is to identify processes or behaviors that are not proficient and come up with new behaviors, processes, etc that are more effective within an organization. Once changes are identified, it is important for managers to estimate the impact that they will have to the organization and individual employee on many levels including technology, employee behavior, work processes, etc.

At this point management should assess the employee's reaction to an implemented change and try to understand the reaction to it. In many cases, change can be extremely beneficial with lots of positives; however certain changes do sometimes produce a tremendous amount of resistance. It is the job of management to help support workers through the process of these changes, which are at times very difficult. The end result is that management must help employees accept change and help them become well adjusted and effective once these changes have been implemented.

The Importance of Buy In

For an individual or organization to achieve change effectively, it is important that individuals in the organization that will need to make modifications to their behavior exhibit buy in. Buy in means that the organization as a whole understands that the changes that need to be made are ultimately beneficial to both the individual and the organization. In addition, each individual and the organization as a whole will have to work hard to make the necessary behavior modifications. If an organization tries to make changes which are inherently bad or are not received positively by an organization, it will be much more difficult or close to impossible to implement these changes without significant resistance.

You can enhance buy in by first explaining the changes you would like to make, citing issues with current procedures and then communicating the benefits for both the individual and organization.

The ADKAR Model

Change management has been developed over a period of time and one of the models that have played an influence in change management is the ADKAR model. ADKAR was a model developed by Prosci. In this model, there are five specific stages that must be realized in order for an organization or an individual to successfully change. They include:

Awareness - An individual or organization must know why a specific change or series of changes are needed.

Desire - Either the individual or organizational members must have the motivation and desire to participate in the called for change or changes.

Knowledge - Knowing why one must change is not enough; an individual or organization must know how to change.

Ability - Every individual and organization that truly wants to change must implement new skills and behaviors to make the necessary changes happen.

Reinforcement - Individuals and organizations must be reinforced to sustain any changes making them the new behavior, if not; an individual or organization will probably revert back to their old behavior.

What is Change Management?

If you work in a corporation or with a large organization, you might have heard the phrase "change management" used from time to time. Change management has been around for a while, but has become extremely popular with organizations or corporations that would like to initiate significant change to processes that can include both work tasks and culture.

A common definition used for change management is a set of processes that is employed to ensure that significant changes are implemented in an orderly, controlled and systematic fashion to effect organizational change. One of the goals of change management is with regards to the human aspects of overcoming resistance to change in order for organizational members to buy into change and achieve the organization's goal of an orderly and effective transformation.

What is ITSM?

ITSM stands for Information Technology Service Management. It is a discipline that is widely used for managing large, medium and small scale information technology systems. ITSM is targeted towards the customer and is considered a consumer friendly approach to managing a wide variety of services. ITSM tries to put the consumer relationship first, by switching the emphasis from an IT centered philosophy to a customer service philosophy.

IT Service management is sometimes associated with other types of management philosophies including Six Sigma, TQM (Total Quality Management) and Business Process Management. In addition, IT Service Management is also associated with IT Infrastructure Library (IT Service Management is one of the disciplines), but it should be noted that ITSM or IT Service Management is not synonymous exclusively with ITIL.

For the most part, IT Service Management is concerned with back office elements of IT in businesses, as well as other types of organizations. For instance, in an ecommerce business whose primary product is electronic gadgets, the focus of IT Service Management would be on management and inventory systems, performing diagnostics and reports and for administrators to easily perform maintenance on the system in place. The emphasis for both the business and the consumer is the not the technology but the use of technology as a marketing tool or business development tool. In today's business environment, you don't necessarily have to be a technology company to benefit from IT service management, in fact most businesses today that use IT Service Management have huge informational systems which most customers never come in contact with.

There are many service providers that assist businesses and organizations incorporate ITSM into their infrastructure, they include Altrius Management, Novell Zenworks, Oracle Enterprise Manager, IBM Service Management and iSYS. In addition, you can also find management service providers, most notably Econ Global Services.

Advantages of ITIL/Disadvantages of ITIL

Advantages of ITIL

There are several benefits for using the Information Technology Infrastructure Library for many of your IT business needs and one main benefit is that through the guidelines and best practices that are taught in the library, your business can save a tremendous amount of money once implemented.

Another advantage of ITIL is that it will help your IT department organize and manage many different disciplines using one comprehensive volume. ITIL is the leader in IT guidelines and best practice publications; it has been tested in real world environments for over a decade and is proven to work.

Disadvantages of ITIL

While the advantages usually far outweigh the disadvantages, there are a couple of criticisms that are worth noting including the idea that most IT professionals consider ITIL a holistic approach to IT management. While ITIL is comprehensive, even the publication itself does not consider itself a holistic approach to IT management.
In addition, there are also accusations by some IT professionals that following only the ITIL due to its acceptance by many IT managers as the authoritative source has actually led to many businesses to skip pragmatic solutions for their specific business needs. Finally, another criticism of ITIL is that while some topics are covered extensively and are of high value, other topics may not receive enough emphasis with quality being uneven in certain publications.

What is ITIL?

ITIL is an acronym for Information Technology Infrastructure Library. ITIL are a series of books and training manuals that outline and explain the practices that are the most beneficial to IT services (usually manager focused). The goal of ITIL is for managers to have extremely high standards in IT value, as well as high financial quality in day to day IT operations. ITIL procedures are supplier independent and include instructional materials on IT infrastructure, operations and development issues.

It should be noted that the acronym ITIL is a registered trademark, and the books included in the ITIL library are copyrighted as well.

ITIL has had a long history of development, and many IT professionals believe that ITIL grew out of the yellow books, which were best practices and guidelines that were used in IBM during the 1980's, however it wasn't until the middle of the 1990's that ITIL become a formal library of IT best practice frameworks. The newest version of ITIL (version 3) is set to be released in May of 2007. The ITIL v3 has been anticipated by many IT professionals all over the world for the last few years. It is expected that five core texts will be packaged in the publication, they include: Service Strategy, Service Design, Service Transition, Service Operation and Continual Service Improvement

The original ITIL library included several books that covered specific themes in IT Service Management. However, after the original publication, the books in the library grew to over 30 volumes. Since 30 volumes can be cumbersome, difficult to read and digest and expensive to purchase as a complete set, the second version of ITIL has been consolidated.

ITIL v2 was packaged differently; version 2 was sold in sets that related to process guidelines and included several different aspects of IT including applications, services and IT management. It should be noted that the most popular sets being sold in ITIL v.2 include the services set, specifically Service Support and Service Delivery. While these two sets are by far the most popular, the ITIL library used as a whole is extremely comprehensive and a good foundation for any business using IT components today.

Following is a list of the books included in ITIL version 2:

1. Introduction to ITIL: While not one of the core competencies of ITIL, this publication gives the reader a comprehensive overview of the advantages, methods used and wide array of publications available in the ITIL library. This introductory book helps both the individual and organization acquire a thorough understanding of how ITIL can be an invaluable tool when put into action.
2. Service Delivery- Part of the IT Service Management Set, the service delivery book is primarily focused on being proactive and looking at the long term for what businesses require from its ICT (information and communications technology) provider to make sure that the proper support is being given to its businesses users. This includes Service Level Management, Capacity Management, IT Services Continuity Management, Availability Management and Financial Management.
3. Service Support- Service Support is also part of the IT Service Management Set. This book is focused on the businesses end user and making sure that all end users of the organization have appropriate services to run and complete their tasks accordingly.
4. ICT Infrastructure Management- ICT is an acronym for information and communications technology, this manual includes best practices for several facets of the ICT infrastructure including ICT design, planning, deployment, operations and technical support.
5. Security Management- ITIL security management focuses on the best practices and guidelines to make sure that information is stored safely and protected against risks of hacking and theft. In today's business world, it is extremely important that sensitive data remains private and confidential.
6. Business Perspective- This book details the best practices and addresses many issues in IT. This book tries to facilitate understanding regarding key issues in the IT along with quality management in the IS (Information Service) field.
7. Application Management- This set includes best practices and guidelines in order to improve quality of software applications and support of these applications through the entire development life cycle.
8. Software Asset Management- Software asset management is part of IT service management and looks at how software should be treated as an asset with value. This book details how businesses can save money through policies and procedures that underline using software expeditiously.
9. Planning to Implement Service Management- provides business with a framework for analyzing and understanding what is needed when instituting certain IT processes and approaches. Many times a CSIP (Continuous Service Improvement Program) is implemented, along with other ITIL books and disciplines.
10. ITIL Small Scale Implementation- This discipline is used for businesses with smaller ITIL departments. This book covers many best practices and guidelines used for larger implementation, but focuses as well on the important roles and responsibilities within a small unit and ways to avoid conflicts between ITIL priorities.

What is Service Management?

Service management, also called IT service management, is the discipline used in industries that provide services or a combination of goods and services. While widely used in the IT industry, specifically the ICT (information and Communication Technology) sector, service management can be integrated into many other industries.

Service management is usually used in conjunction with operations support systems. Systems that use service management can include order management, inventory management, activation, maintenance, performance diagnostics and several other types of support systems to make sure that these systems are running proficiently and error free.

There are several components of service management. Service management usually incorporates automated systems along with skilled labor. Service management also usually provides service development. For instance, it is extremely important to first simplify and then streamline services that you manage (i.e. delivery, support) into a simple workflow. However, managing your workflow is not enough, another component is the ability to govern automated controls from a centralized location and make sure that data security is in effect at all times.

Service Management is usually used with other types of management systems including Total Quality Management (TQM), Six Sigma, CMMI (Capability Maturing Model and Integration), and Business Process Management. It can be used with small scale companies or used with extremely large corporations. The discipline of service management has been around since the early 1970's and was originally part of the Operations Management discipline.

Today, you can find many resources and service providers that help small and large businesses incorporate the principles of service management into their organization. Some of the vendors that provide service management include: iSYS, IBM Service Management, Novell Zenworks, Oracle Enterprise Manager and Altrius Management Suite.

While the above service providers help organizations manage large groups of computers (automated systems), there are a few vendors that provide management services as well, most notably Econ Global Services.

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