PERFORMANCE AND TECHNOLOGY

ADVISORY

Critical Success Factors for Organisational Design (OD)Dorothy Nel, Associate Director24 June 2010

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Objective of the presentation

Making the business case for ODAligning OD with strategic and tactical objectivesBuilding support and involvement among key stakeholdersCreating a dynamic governance structure with decision-making protocolsDefining OD scope, deliverables and objectivesAddressing key issues pertaining to resource deployment and accountabilityKeeping pivotal communications vital and engaging

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Business case for OD

A business case is an important tool to assist in a transformation process. It is designed to provide decision-support information on

at least three critical junctures of the transformation journey.

A business case is a document which evaluates the potential benefits, impacts, risks and revenue implications of alternative

courses of action, in order to support a business decision to follow one of these courses of action.

Once the cost-benefit equation is understood, the performance measures used in the business case can become very powerful drivers for change.

Case for changeSelection of

conceptual designValidate the chosen design solution for

finance

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Business case for OD (cont.)

Guiding principlesThe business case cannot reflect on precise, validated numbersAssumptions need to be made that are reasonable, objective and conservativeThe benefits need to be defined in terms of the key performance indicators, as defined by the balanced scorecard

Industry trendsUsed to obtain buy-in from key stakeholdersAssumptions remains static and are not tested Re-evaluation of benefits

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Aligning OD with strategic objectives

Organisational strategyOrganisational value chain

Core/non-coreBusiness model

CustomersServices/productsOperating model

Processes/technologyStructuresCulturePerformance measures

Strategy

Process Tech- nology

Culture People Structure

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Building support and involvement among stakeholders

Strong sponsorship at the appropriate level

Mitigating risks including change management risks

Stakeholder engagement Internal/externalAppropriate levelParticipation in design and analysisBest practice/benchmarks

Structured communication processTwo-way flow of informationKey messages aligned to project milestones

HR involvement Change agent/super usersRaise resistanceSize of OD intervention

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Creating a dynamic governance structure with decision-making protocols

Approves project deliverablesAddresses risks & issuesMonitor & track budgets

Exco Project Steering Committee

Project Sponsor

Project Manager

Ratifies investment decisionsValidates the business model/organisational structures

Makes technology and high- level process decisionsApproves organisational structuresApproves budgets

Board

Addresses risks/issuesProvides quality assuranceEvaluates if project deliverables are appropriate

Obtain progress reportsEscalate issues & concernsIdentify inter-dependencies

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Defining OD scope, deliverables and objectives

ScopeOrganisational levelsNumber of people/areas affectedProcesses within the organisationTechnology InfrastructureTimeline

DeliverablesAnalyse findings

Key findings on organisational model, structure, process, technology and cultureCustomer engagement Comparison to best practices/benchmarksMain areas of enhancement

Future designDesign principlesFuture business model (processes, structure, technology & culture)Change impact and risks associated with the modelBusiness caseImplementation plan

ObjectivesCase for changeMeasurable objectives with KPI’sTracking of objectives (quick wins)

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Addressing key issues pertaining to resource deployment and accountability

Project perspectiveRole clarification between client/consultants in various streams of the projectSponsorship roles

Initiating/sustainingDay to day commitments vs. project commitmentsInterdependencies - project manager role

Migration perspectiveInternal HR

Job profile development & job gradingSystem updatesGuidance on consultation process

Management Consultation/communication

Organised labour Staff affected

Change agentsPerformance contracts

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Keeping pivotal communications vital and engaging

Pivotal communications Audience

Case for change or business case Board, Exco & SponsorProject objectives/measures and budget Sponsor

Design principles ExcoValue chain/ business model discussions Board/Exco

Organisational impact on processes/ structures/technology/culture

Exco

Business case and implementation plan Board/Exco

Impact/process Unions, clients, suppliers, staff etc.

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Presenter’s contact detailsDorothy NelKPMG +27 (12) 431 1468dorothy.nel@kpmg.co.zawww.kpmg.co.za

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2010

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