Change Management In The It Industry

ACADEMY OF ECONOMIC STUDIES

FACULTY OF BUSINESS ADMINSITRATION

CHANGE MANAGEMENT IN THE IT INDUSTRY

– LICENSE DEGREE –

Scientific Coordinator: Author:

Prof. univ. SERBAN DANIELA SEBASTIAN-MARIUS POPINA

BUCHAREST

2016

TABLE OF CONTENT

0. Introduction

0.1 Evolution of technology

“Scientist from the RAND Corporation have created a model to illustrate how a Home Computer could look like in the year 2004. However, the needed technology will not be economically feasible for the average home. Also the scientists readily admit that the computer will require not yet invented technology to actually work, but 50 years from now scientific progress is expected to solve these problems. With teletype interface and the Fortran language, the computer will be easy to use”. (Independent and investigative news – AnonHQ, http://anonhq.com/)

That was said in 1954 in an article from the magazine Popular Mechanics, describing a home computer that could look like a wall full of electronic devices, panels and other equipment including a steering wheel, a display that looks like an old TV that is positioned in the up-corner of the room, and a table with a keyboard and other buttons for a variety of commands. All these were designed for a Home Computer, which could be used within the software technological limitations (non-user-friendly interface, a more code-based computer).

In 2004, people were still excited about the Windows XP interface, which is somehow similar to the one we use now in the newer versions of Windows. If we think of the difference about the technological expectation of the year 2004 (expectations from the 1950’s) and the technological reality of the same year, and also of the technological progress, we may conclude that human kind is on an exponential curve of tech-development.

Now, in 2015-2016, scientists are thinking of a way that the “Biological Super Computer” might be created by using bacteria for the CPU of the Computers. They might create a computer that actually lives. For the moment, nobody can say if it will be able to think for itself, but it might. The project started ten years ago, but it didn’t reach to an important conclusion up until now. They say that in ten years they will be able to develop super-computers out of this, meaning that home biological computers will be available sooner.

Again, “the needed technology will not be economically feasible for the average home”, but evolution proved that our dreams regarding IT and equipment are fulfilled sooner than expected and much cheaper. Furthermore, at the initial expected time, these equipment might even be outdated and valueless.

Do you remember the time when the touchscreen was a dream for the most home users, and only one year later having a touchscreen was mainstream? Or that cloud computing was just an idea, and shortly it became reality? The way technology is changing our lives and levels of expectation is incredible: maybe we didn’t get to teleport ourselves to work or Hawaii, but there are some super-jumps of technology on the steps of evolution.

And don’t forget about the quick steps between floppy disks, cd’s, USB Drives, external HDD’s and, of course, Cloud Storage. I remember that I was a kid and I was still dreaming of a cheap Portable CD Player: one year later I had an MP4 Player, because it was somehow cheap and the MP3 Players were already outdated. We are witnesses to a spectacle of a marvelous technological step into a revolution of all the industries, from medicine to education, from construction to automotive, etc.

0.2 Evolution of the IT Market in Romania

In Romania, the IT market started to develop lately, but fast. In 2003, we were far behind the IT world competition. The IT expenses were less than 1.5% GDP, while the average among other countries was over 3%. In 2006, 8500 IT companies were active in Romania, out of which 3500 had a turnover under 10000 Eur. On the other hand, the contribution to GDP was over 9%. The market grew by 33% until 2008, and it was still growing.

Even if Oracle, IBM and other big players opened offices in Romania before 2000 (both IBM and Oracle opened offices in 1995), they started to invest significant amounts of money only after 2004-2006, which is the period when the foreign investment started to grow intensively. For example, Intel opened the Romanian office in 2005, becoming a big competitor of the existent ones in less than one year. SAP founded the Romanian branch in 2002, offering expensive support for Business Intelligence tools to big companies, like CFR, in a very short period of time (before 2005).

Also, the period before 2005 was more like a time span for adapting the technological environment to the international one: since the communism lasted in Romania until 1989, investment in technology came quickly, but the industry development started significantly only after the Romanian environment was adapted to this major national change, from socialism to democracy.

After 2005, the Romanian technological environment grew so much that not only that foreign investors started to open head-quarters in this region, but Romanian companies started to export their products: surprisingly, our technological studies generated best results among the ones that graduated faculties with technological profile, most probably due to the fact that university cycle studies are free and the hunger for information and evolution was severe after the communism ended.

Between 2005 and 2010, the Romanian IT Market was export oriented, 55% out of the total production being recorded outside the country, and 85% of it was related to the European Union: the Romanian export of software and technologies was over 350m Eur in 2006. One of the biggest players that generated these results on export were Siveco and BitDefender, which impressed the international IT environment with their software, products and services.

The number of IT engineers that worked in IT companies also grew very much in this period, from 35000 employees to 50000. In 2014, there were 120000 employees in the IT companies, out of which more than half were IT engineers and specialists. IBM, HP, Gameloft and Computaris are only few of the companies that enlarged their IT teams in Romania. This is an effect of their investment, which they decided upon as a result of the evolution of the industry.

Source: Own sources

The salaries also grew consistently: In 2006, there were salaries of 700-1000 Usd. In 2011, the salary on the entry level was of 2000 lei, and grew by 10% until 2012. Also, in 2012, the salaries expectations for 2017 were doubled in relationship to the ones in that moment. The average salary was 200% of the average salary in all industries active in Romania. The Romanian results in IT engineering were similar to the ones on the international level, thus the salaries needed to have the same tendency. The IT specialists needed to feel motivated also financially, and since this business sector grew this much, more and more Romanian students wanted to work in the technological environment, since there were very few industry sectors that paid this well.

In 2014, the IT Romanian Market was called the “Romanian Paradise”, meaning that there will be no IT engineer unemployed: many employing offers started from 1000 Eur. As a consequence, in 2015 there were 7000 young people which just finished the university cycle in the IT field, out of which most of them followed the classical IT career path, and the others went to video gaming field or IT positions in companies that were not active in the IT industry. Very few of them chose to work in other fields than IT.

A statistics shows the number of employees in some of the segments of the IT industry between 2008 and 2010. The number of employees in the field of Software and IT Services have been growing from 54300 to 56600, while the total number of IT&C employees has decreased from 124100 to 115800. Also, the number of the employees in the Telecommunication field has decreased by more than 6000, from 49800 to 43100, similar to the number of employees in the field of Hardware and Electronics: they went down from 20000 to 16100, representing less than 15% of the total work force active in the IT&C field in 2010.

An explanation to the above statistics could be that at the start of the economic crisis period which Romania, along with Europe, faced difficultly, many companies were more software oriented than hardware oriented, since it required IT skills more than financial resources, which were limited at that time. Also, Romania is more of an importer of technological hardware than exporter. Also, the technological skills regarding programming and consultancy were not a problem for the Romanian IT specialist, considering the exigency of the IT studies that are done in the universities from this region.

Source: Own sources

The IT industry had a contribution of 6% to the GDP of Romania in 2014, having the potential of reaching 10% in the upcoming years. But this is an index dependent of the local entrepreneurs in the industry: they need to invest in and develop their own products, then successfully sell them on the global market in order to capitalize on this potential. For instance, BitDefender developed the BitDefender Box, being called by the foreign magazines “The start of the internet of things” and “The best security solution of the smart homes”.

The IT sector doubled up in comparison with 2011, adding a value of 9b Eur to the Romanian GDP in 2014, overpassing even the agricultural contribution to GDP, very close to the construction sector. Despite the fast growth, the smallest sector in the Romanian IT field is the Software one now. In 2016 it is forecasted that the Software sales will reach 300m Eur if the IT market value will also grow up to 1400m Eur.

0.3 Main Romanian IT Hubs

There are cities like Cluj, Bucharest, Iasi, Brasov, Timisoara, with different prospects for the future of IT, but all having a high contribution to the Romanian IT Market. Bucharest settles on the first place regarding the IT industry, contributing with 67% to the national turnover, and more than 50% of the IT work force and no less than 60% GDP contribution to services and software, telecommunication and hardware. The top 25 companies in software and services have their headquarters in Bucharest: the city is like home for the companies with the biggest IT potential. Of course, Bucharest will be the first choice for a foreign investor, since it is the metropolis of Romania and the best IT oriented Faculties are also here.

Brasov is a small IT hub, but only 3 hours away from Bucharest, so it is chosen as a secondary office for the companies that settled with their main offices in Bucharest. Also, German investors prefer Brasov for their large number of German Language speakers.

Cluj, the second city by the IT companies based locally, is a hot spot for BPO services and R&D Centers. It is in the Top 30 world destinations for foreign IT investors. Also, it ranks amongst the first 100 outsourcing sites, at the moment having a demand for IT talent which surpasses the candidate pool. Its software market developed by 50% in the last two years, hosting 250 IT companies and more than 5000 active IT engineers.

Timisoara Ranks for one of the best developed areas in Romania, having unemployment figures almost identical to the ones before the crisis. Before the fast growth of Cluj in the IT industry, Timisoara was the second biggest hub in Romania. Also, Iasi is well-known for its high pool of fresh graduates that are to become software engineers or IT specialists. It is not really an attractive location for foreign IT investors, and many of the fresh university graduates are leaving the city in the favor of Bucharest or Cluj, but Iasi is considered a generator of IT specialists. (Doing Business, http://rbd.doingbusiness.ro/)

0.4 IT Industry now in Romania

A good opportunity for Romania IT Industry is the cloud computing one, because Romania can easily benefit from the high speed internet: there is a strong infrastructure, at low cost and the labor skills are high ranked. Most IT specialists are software developers, almost half of them. The others are Technical Support Specialists or Quality Assurance engineers and Testers (21% Technical Support and 16% QA/Testers), followed by the few percentages which consist in specialists working in different niches of the IT industry. Of course, these data reflect the fact that the Romanian IT specialist, seeing the poor economic environment from this region, has the tendency to work in the industry sector where the salaries are bigger: an IT developer can earn more than twice as much as a technical support specialist or a tester.

Among them is a very wide range of programming languages that Romanian IT engineers know very well: Php, .Net, C#, C++, Java, JavaScript, Html & Sql, and others. But all these do not cover the needs of the market: many external investors are looking for skilled Romanian fresh graduates, and during time, it a company needs an experienced specialist, it has to persuade him to quit his actual job for a better offer: it is very hard to find an IT specialist unemployed, but very easy to find companies with an immediate offer for a possible candidate.

Let’s split the IT market into his main three segment: Hardware, Software and IT Services. Then, let’s properly analyze the competitive landscape.

0.4.1 Hardware

On the hardware market, there is a decline in the average price at selling in the past years, but despite that, the market continues to expend, with major efforts, both in what regards the volumes and the total turnover. Approximately 880000 personal computers and equipment with similar functions were purchased by Romanian customers in 2012, fact which includes desktop computers, notebooks, netbooks, tablets, etc.

Talking about tablets, in 2014 their sales volume and value overcame the sub-segment of the desktop computers market, and the high competition on the tablets market became more and more intense at the end of the year, close to holidays, fact that generated a rapid growth in sales on this market. Almost half of the tablets on the market are imported, the other half being manufactured locally by companies like Evolio, Allview, E-Boda and Serioux. The Romanian market is very sensitive when it comes to money and prices, so tablets manufacturing had to be done at very low-costs. Of course, they were not at all the best tablets on the market, but they were easily purchasable by anyone with at least an average income. Also, the expansion of the tablets’ sales in the business environment (B2B and B2C also) and the cloud opportunity of information storage enabled the local manufacturers to develop a variety of products.

0.4.2 Software

The biggest demand in Romania is for IT solutions regarding Enterprise Risk Management (ERM), SCM Solutions (Supply Chain Management) being placed on the second place. Despite that, ERP Solutions (Enterprise Resource Management) are the ones covering the majority of the turnover in IT solutions: their implementation might not cost very much, but their support may last for years and the costs are very high. The ERP sector has a strong performance, growing annually by 20%, ranking on top of the general software market. Also, many IT solutions and tools feel the need to shift from local application to cloud services.

There is a strong competition between SaaS and PaaS (Software as a Service and Platform as a Service), the first one being online and representing the largest cloud market, the second one needing installation on hardware components. SaaS seems to be wining lately, which is why many IT Tools and Solutions developers try to create online versions of their desktop programs. In 2014, only 6% of the Romanian companies have implemented one or more cloud solutions. As expected, the office software ranks first in the top leading SaaS application, covering 25% of SaaS market, Office 365 from Microsoft being the most representative tool.

0.4.3 Services

This segment is expected to grow by 8% in 2016 and to reach 473m Eur in 2019. IT Services might outperform the other sectors of IT on long term, the reasons being the continuous growth in outsourcing and the adoption of cloud services, which require support (which is, usually, given by outsourcing companies).

0.5 Growth Opportunities for the Romanian IT Industry

Talking about outsourcing, Romania ranks first for outsourcing in Europe. This is due to several fact, like: our geographical position is in the proximity of Western Europe, our IT Specialists are very well prepared, we have a tendency to learn many foreign languages, our universities are in a continuous process of preparing IT students in the best possible way, we have a very good price-quality ratio, and we are cheap in comparison to the amount of work. Most probably, these are the reasons why we rank so high globally among outsourcing locations: Top 10.

In 2014, the Top 50 Software companies in Romania had businesses of almost 1 billion Eur, having a growth of 25% in comparison to 2013. There is a high demand of IT Solutions, especially in the foreign countries, and this had a high contribution to this growth. Also, their total net profit was of almost 70m Eur, and the number of employees have raised by 2500. This is how the number of employees of the Top 50 IT Software Companies in Romania was of 19000.

The leader is still Oracle Romania, with a turnover of 700m Ron and a net profit of almost 9m Ron in 2014. Also, their employees’ number have raised by 1000, from 2500 to 3500 in 2014, and continued to grow. The following companies are BitDefender and Siveco, which are of Romanian entrepreneurs. They are far behind Oracle in terms of turnover, each of them having a turnover of 250-280m Ron, not even half of what Oracle could do in Romania. On the other hand, the most profitable companies were BitDefender, SAP and Endava. BitDefender had a net profit of 42,5m Ron, five times more than Oracle, which seems to be the main competitor.

Source: Wall-Street: Cele mai mari 50 de companii de software din Romania

Due to this progress, Romania has now a higher opportunity to access an inflow of European Funds, in order to develop continuously and to enter into the European Information Society. 850m Eur are expected to be received from the European Operational Program funding in the period 2014-2020, ensuring a continuous support for IT&C development in mid-term. The growth of Romania’s GDP is expected to average 3.4% yearly during 2015-2019, while the level of private consumption is expected to be lower. This means that the IT market will have to gain higher levels of consumption and high business confidence. Also, it means that the IT Market has to persuade the consumers to buy mostly from local manufacturers and developers.

The foreign investors show high interest in Romanian IT world, fact that is confirmed by global ratings and reports which can prove a good position for Romania in the ITO world. It is ranked the 25th in attractiveness for IT Services, and Delloite’s Top technology Fast 500 EMEA, an event showing IT companies with the fastest revenue growth, placed four Romanian Countries on the list. Vola.ro, an internet airline ticker retailer, ranks on the third place.

After all these, despite the fact that we are not such a big country, neither in terms of surface, economy or demography, we seem to be able to make important changes and generate best solutions in the IT world. I guess that after the end of the communism, and even during that period, there was a hunger for evolution and technology development which motivated us to go further and further with innovation in the IT&C environment. The investments in this sector have grown massively in the past ten years and they seem to continue.

I believe that in the following years we will still keep the balance between the local and foreign investment in this industry, maintaining both the wish to progress with internal resources and the desire to grow in the best foreign IT companies globally. I must say that this is also a reason why we keep raising the quality level and the efficiency one in the IT background. I strongly consider that even if there are still many changes to make to reach a higher rank in this market (and not only this market), we will be able to have the right solution for them. But how will we manage these changes?

1. Change Management Concepts

1.1 Approaching Change Management

Companies need to begin change processes in order to satisfy the market’s needs, to maintain or raise the wealth of the organization and to fulfill the governmental and legal tasks required by the state. There are also many other reasons, but these are the main ones for which a company would enter a change process. Also, these change processes are started in order to maintain the organizational stability and to support a continuous balanced economic growth. Change management is able to help the company in modifying any part of its structure so that it would face efficiently a business environment which is continuously changing. This process includes activities meant to support, accept and approve the necessary and wished changes. The main task is not the change itself, but its effects: changes make it hard to maintain the integrity and quality of the work environment. In the past, the work environment was more based strict and severe rules, and every decision was imposed. Nowadays, people are sensitive to changes, competition is huge, and a single mistake made in the internal environment of the company could mean the external decline of it. It is a vicious circle which is likely to lead into a fast failure, or even into a fast escalation on the market.

Organizational Development (OD) is a way to approach the organizational change planning process, involving the behavioral science in a well-organized environment and on long term, improving organizational effectiveness. Most changes nowadays are related to technology within a company, and Organizational Development is looking forward to finding the best IT solution for the employees and the wealth of the company. Still, the process of implementing any technology within a company is incredibly slow, unfortunately.

People seem to be afraid of technology, and in many cases the resistance to change is due to the massive lack of technological knowledge of some managers: they fear that they might lose their old dominant position, sustained also by the old management system. They fear that the younger employees with better technological skills and good management knowledge might be chosen for the management position, even if they have less managerial power and less influence among the employees.

This is becoming a critical issue when it comes to the case when the ones that fear new technologies are the same ones that are able to change and improve the technological environment of the company. Here, only some pressure from the authorities or the legal power can force the situation to change.

These are cases when Organizational Development must start the necessary processes in order to achieve its goals: develop the capacity of the employees for self-renewal, develop the team-work efficiency, and also the department (or the external company hired for that) is not imposing some ways to change: if the change is not mandatory, it is chosen at the organizational level, not only managerial level, allowing the employees to have a freedom of choice, which will make them see their importance in the change process. Also, this shared power of internal democracy is a way to develop the way colleagues trust each other working together towards a certain choice. Organizational Development is trying to make changes in the employees’ self-trust by allowing them to take part to a change right from the beginning, just like helping them see a house built from nothing to its final state. Starting a project from its null state and seeing it finished is very helpful when it comes to raising self-reliance, Organizational Development taking advantage of knowledge about human behavior in organization in order to help the employees achieve their goals and the company’s goals.

1.2 Issues Encountered when it comes to Changes

1.2.1 The evolution of technology

In the IT world, there is also a time limitation regarding the fast way now technologies appear. While the employees get used to a certain tool, a newer one shows up. Also, the implementation of a new software tool within a company is very expensive, especially when it comes to its maintenance. The change regarding implementing new internal IT tools is now only expensive, but the employees are inefficient for a while. On the other hand, these are necessary changes: as an IT company, you don’t only have to keep the pace of the industry externally, but internally too.

Organization Development Process means gathering data and feeding it back in order to plan and assess from both points of view: subjective and objective. This is why, when choosing which software would better fit an organization, there are more factors to be analyzed: besides the indexes which show which IT solutions are most effective and could generate more profit on the long-term, there is the subjective factor: the compatibility with the work environment. How do the employees organize their activities and how do they fulfill their tasks? How is the information organized in the actual system? Which IT solution is best and, simultaneously, closest to the actual one? To which solution would the employees adapt best? There are many questions to be answered when choosing a tool to be implemented within a company. Indeed, some of the tools are mandatory, but for every mandatory step there is a choice to make, even if the choices are only two. Which is best?

New tools show up on the IT market every day, as a consequence of the fast development of technology. Each product is bringing new updates in order to offer a better way to fulfill tasks in comparison to similar products that were used before for the same task. A problem of attitude is arising when the decision to bring a new tool is delayed until the following year, because there is a high probability that in the following year a new tool will rule the market: more expensive, more efficient, more productive, more complex, but easier to use. And after the following year, the decision is delayed again from the same reason. The system remains outdated.

Also, this happens in many fields of activity and many cases: for instance, let’s say that we own a bank and that our way to organize files is outdated. As much as we delay the way we organize files, either physically and electronically, there will be newer and newer ways to do this, there will appear new tools, many of the files will become useless. Years ago, a bank would have given you few files for opening a current account, and too many files for opening a savings account. Now, there are many files for the current account and very few for the savings one because the savings are associated to the current account now. In the past, not all the banks were structured similarly. But some banks didn’t change too much: they give you all the files required by the law regarding the current account, and for the deposit they still give the old type of files, along with the new ones. They changed only because it was mandatory, but they were not seeking the efficiency of the change. If they would want to change now, there would be too many things to be changed. Sudden and massive changes are not good at all for the wealth of the company, especially when they are mixed.

1.2.2 Changes required by law

There are, for instance, changes required by the law. They are mandatory, and as a CEO, you decide that the change is necessary because you want the company to continue with its existence and you wish more of it in terms of profit, clients, or benefits. Basically, you want your company to benefit from the change. Or, at least, you don’t want to lose more than necessary. And this is impossible unless the change is managed correctly before, during, and after the implementation.

The changes that we want are proactive, and the changes that are imposed by law are reactive. In both cases, change management refers to a professional method, allowing the way change management is perceived to be more similar from a person to another, restraining the meaning of it to a truer one. Also, change management is recommended to be done by the management (and other employees) of the company and an external consultancy company, specialized in change management. Of course, each company can have its own Change Department, but it is recommended that they have it when the changes are often. In most cases, the specialists recommend to the company that they should also have a proactive side of the change, in order to be one step further than the competition and also to forecast future new requirements of the law. The forecast cannot go too far because there is a time span for each change, and the biggest part of it is the accommodation period. For example, everybody could guess four or five years ago that smoking will be forbidden in closed public spaces, but that required a change that could consist in a restriction that did not exist even in the law.

Let’s take the example of Computer Generated Solutions. Inside there, in many departments, nobody is allowed to access their phone, not even inside the building. Nobody is allowed to send emails externally (only to the clients through certain CRM tools), nobody is allowed to write something on a paper and take it home, it is like they took the meaning of work strictly: you come to work and do nothing else, and you go home and do nothing regarding your work. All the work must be done at the office, and nothing else can be done there. That would be ok if they weren’t so exigent. Their requirement are very high, but it seems that their strict rules regarding security of information and work have placed them pretty high in the IT Industry. The internal situation is that the IT department has some freedom, like a normal company, but the other departments have too many employees with an employment time span of at most 4-5 months. And the salaries are at the average level of the industry, excluding the IT ones: there are very high salaries.

They said that they can see this as the future compulsory way for a company to work, regarding the security of the information. They might be mistaken or not, but even if the employees are not pleased with this, the clients are: there are usually huge amounts of money which the clients pay for the quality and security of their products/services. CGS is a special case regarding this subject, because even if they change frequently their security policy adding always new clauses and principles, they do it within certain organizational values that they respect.

1.2.3 The employees

Once people start to get used to a certain way to fulfill their tasks, they gain a natural tendency to resist to new approaches. This is understandable, of course, because it is natural to become familiar and to feel comfortable with the things you get used to. Even though, if the behavior is not well enough keen on its own management, it might become a serious issue when people stay anchored in their past and systematically refuse to grow beneath the limitation of their routine.

In order to get to know the organizational (and also personal) behavior of the employees, it is very important to establish and pay attention to the working relationships. After creating links with them, there is a stage of diagnosis where data is gathered and analyzed, setting change objectives. The changing process starts with the intervention of the collaborative action, whose target is to implement the desired change. Of course, the change itself is not the hardest thing, but its maintenance and support is essential: following up and reassessing periodically the situation is compulsory if a change is wanted to last. The whole Organizational Development Process is finished with a terminal relationship, leaving the employees and the whole system self-reliant on its change.

Change management, as you can see, is a science of people. In the end, an enterprise exists as an agreement between human beings. Also, it is managed by people. Each definition of change management is interpreted subjectively by each of us, and even if the words remain the same, the meaning is different. Even the word “change” could mean different things: to some people, it means upgrade; to others, it means substitution. To my mind, it means anything that can switch the initial state of something into a final state, which is compulsory different from the first one. Also, changes can be done according to a plan, being managed systematically, or they can be left as simple changes. This is also a way to manage changes: once the change is done, do nothing about it, just let’s see what happens. What I am trying to explain is that in life, not only in the business environment or IT industry, changes should be seen from many points of view and should be associated to a risk management, also, which should forecast all the outcomes and prevent the bad ones.

Change management is difficult because it involves changes in people's behaviors. Reshaping people's behavior requires a significant amount of knowledge to raise awareness and bring new skills. To change the organizational culture and customs in interdepartmental teams and collaborations are crucial for success. In addition, support from management is also needed to reinforce the importance of change and to highlight negative consequences for employees and the organization.

Stress within employees is a very important matter regarding change management: this tension experienced by everyone in the company affected by the change through constraints, extraordinary demands or opportunities which are to be faced. Also, stress from external causes can be an obstacle in the efficiency of the change process. Change management tries to deal with stress by identifying it with a motivator: the stress will act as a positive influence and it can be energizing and performance enhancing. Of course, stress comes with damage no matter what you do, and it can break down a person’s physical and mental system, leading to a job burnout or rage. The question is if the employee can transform this rage into energy and motivation for better professional outcomes. Psychologists believe that if a person is stressed, it should be either helped or given hope, or given something to do. Of course, the favorite options are the help and the hope, but when it comes to things which are to be done, people have the tendency to destroy because it is easier. Here is the challenge or turning this feeling of destroying into constructing, into creation. This can channelize all the negative energies of the stressed ones into motivation.

Change management can also improve the efficiency of communication. Better communication between employees and the organization will lead to a better understanding of everyone's needs and priorities, because business units do not operate in isolation. With communication and high availability, users will feel more empowered and less frustrated when the systems are changing.

1.3 Benefits of Change Management

There are many benefits a company can get out of change management: most of them are associated to risk management, reducing the forecasted damage and improving the quality of services and products. Change management is necessary to achieve a high level of IT, availability and service quality. Through effective management of change process, both unplanned and planned transit time can be reduced. Thus, service quality is improved, IT support and business’ costs are reduced during the change timespan.

Change management can simplify and support the flow of information and operations. The change process will help organizations in rationalizing the information flows on simplified levels, maximizing the use of existing software in order to reduce unnecessary reports and improve productivity.

Creating a series of analyzes that can be used to achieve reduction in cost of the product / service is another benefit of change management. This can help the organization to grow and focus on revenue and profits. These analyzes include cost analysis for service and product, which are very useful for the decision-making service. These also include the matching with the estimated costs, the analysis of the direct utilization of labor, and the corrective actions and plans.

However, change management is one of the hardest fields of management to be implemented. It takes a great inter-functional team of application and businessmen that are keen on the whole business service and also on individual changes of the business units. It requires project management and a parallel configuration to define relationships between business processes, IT services and basic applications and infrastructure.

1.4 How Change Management Works

Change management is a process of finding and solving problems. Change management is a matter of moving from one state to a “problem solved” state. Three types of objectives and activities are implicated: transform, reduce, and apply. Transforming the issues is a process concerned with identifying differences between the two statuses, the problem status and the expected outcome status. Reducing the problems is an activity that identifies the ways of lowering the number of differences. The application itself is like a game of “find and solve” the problem.

Specifying and defining the change issue is the core of change management. In this process, the future state is identified, the initial state is described and defined and there will be taken decisions regarding the whole process, structured as to cross from one state to the other through intermediary steps. If the problem is taken into consideration early enough in time, the more participants will be capable of planning and recognizing the effects and risks that were not identified during planning. These steps also answer to questions like “how, why, what?”. The initial form of the problem statement regarding change often has its core on the change means. This is also stated as a “how” question, with the initial status more or less specified. Despite this, the outcome fall on the question “what”. This answer needs a diagnosis of the issue and a discussion about the expected and wished result. The questions “why” have to be answered in order to discover the meaning of the change and to generate a range of new ways of doing the change. Together, these questions seek the true and final outcome that should fit best for the certain issue, as a result of the collective effort.

Three basic steps of change management are mandatory in this process: unfreezing, changing and refreezing. This point of view takes into consideration the concept of stabilization of dynamic systems. These being said, the starting point and the ending point of the change process are the stability points. Unfreezing consists in gathering and analyzing data, setting change objectives; Changing is taking collaborative action to implement desired change; and Refreezing is following up to reinforce and support change.

1.5 The importance of Changes

Again, why do we change? Globalization along with the continuous technological development are constantly evolving, creating a need for change in every business environment. Otherwise, the companies that are not open to changes might fail sooner than expected for not keeping the pace of the market. Also, knowledge has a very important meaning now, technologically and accountably: while technology was in a constant innovation process, knowledge became not only power, but money: it is an asset that might decide the future of the company. Technology is used for storage and, most important, security of information, ensuring the wealth of the company.

Being updated constantly is not only a stressful factor that might have a great influence upon the business, but if it is not done right, the business might fall few steps at once on the market ladder. But going further that the competitors is a great advantage: the stress of change is diminished for a short, but meaningful, period.

With so much change in the technological industry, the companies have to turn from pragmatic to flexible and open to change. This is the reason why the abilities regarding flexibility and adaptation are becoming more important than the managerial ones. Also, it is very important to know how to fight the resistance to change: changes are recommended to be done in a proper period of time, because big and fast changes are extremely difficult due to the complexity of the structure, culture and routines of the company.

We are talking about people, who are not robots that are programmed to do things however we want. Human being cannot simply change parts of their behaviors, they need time, because the past is imprinted, so changes must be done erasing parts and/or adding other parts to the routine.

Technology grows fast and managers prefer the adaptation to external innovations more than internal development: internal development is slower than, let’s say, a new revolutionary software of internal database of files. It is easier to buy tools than create them, it is much quicker, but more expensive. On the other hand, time is money. Buying a new tool might create a competitive advantage, placing far behind the companies that are resistant to change. Also, this can generate a huge profit and market share difference between the ones that suddenly fell behind and the ones that manage to maintain their position, at least.

1.6 Change Management – A science of People

I have always thought that things like Change Management, Sales, and so on, are just different ways of saying “treat other people correctly and try to see how it is to be them”. Change Management addresses to the emotional side more than it does to the rational one. Also, I think that this side of us must be addressed systematically. Any factor that perturbs a stable state of being, turning it into another state, different from the first one, is creating people issues. When a change occurs, the managers must lead the change in an organized way, new skills and abilities will have to be developed, job descriptions will change a bit (at least in the eyes of the employer) and the work force will act with resistance and uncertainty.

These issues can be dealt with reactively or proactively. On any of the approaches, the efficiency and the motivation of the employees will be reduced, at least for a while. Of course, the managers should choose some key stakeholders also, and try to begin the change in a formal way: if there are emotions from the beginning, even good emotions, they can be easily turned to black and have a worse effect than expected. A formal approach would be the best way to send the message of the change by the least emotions.

Also, a formal approach requires a rational analysis of the data that would be collected preliminarily. The plan should be done respecting a certain structure that can create less negative effect upon employees’ efficiency. The implementation strategy seems to be the hardest part: this is the true beginning of the change, as it is perceived by the employees. If the change begins badly, then most probably this state of the whole process of change will turn even worse.

Another best-practice example of change management is a principle which says that starting from the top levels is extremely important. When it comes to changes that require the attention of all the layers of the company, all of the eyes of the employees’ turn towards the CEO and the top managers. They must be the first subjects of the change, embracing it professionally as a challenge, motivating the whole company. They must be careful, because he change must be perceived very similarly from all the top managers, in order to send the same message about the change and o model the desired behaviors. The top managers will be the most stressed, but they have to be aware that the change is not only about them, but the whole company. The change itself consists in a stressful process, this is why the stress of the managers must not be felt by the employees.

A great team-work of the managers will place the company on a position for success. They must be all committed to the same target, understanding the business environment from a behavioral point of view, in order to be able to control within some limits the way employees feel about the change.

Talking about layers in a company, all of them and all the business units must have a role. The efforts for the change have to include the identification of the change leaders and the responsibility for design and implementation. This is how a change has the effect of a “cascade”, from the top managers to the bottom employees. Each layer has trained leaders, having to share the same vision with the whole company, fighting for the same mission, being motivated to make the change happen.

1.7 Understanding the Change

I said earlier that the change is recommended to be formal. The workforce is rational and it will be asking itself of the necessity of that change, not being aware if the company is in need of it or not, or if the company is on the right way, or how much do they want to be involved an or how much the change is wanted. The answer will be searched for and it must be provided by the managers. The vision of the change and its formulation must be written and visible to every employee.

Firstly, there must be a realistic and convincing formulation of the change statement. It needs reasons, a beginning and an ending. Also, the demonstration of the future of the company is a second very important factor that influences the change. The future of the company must look promising and the change plans must be feasible. The third thing to do is to explain briefly the proper behavior and the decision making strategy. On the other hand, there are always people that that don’t embrace the change. For those ones, the leader must create a separate and special message, which must be perceived the same as the initial message, which was perceived by all the other employees, even if it looks different.

Employees need to feel ownership over the things they do and over the ones they are involved in. They all have a special role in the big change process, they must identify the issues and they have to offer solutions. This, many times, is reinforced by monetary or non-monetary rewarding.

Unfortunately, the change initiators and leaders believe that all the employees understand the problems and the change reasons, that they all feel the necessity of the change, and that they can forecast as clearly as the leaders do. This mistake is done too often because employees lack knowledge about aspects of the change and they are either disinterested, or lazy, or they think that they would not understand anyway. Others believe that they can do nothing but obey, and due to many reasons the employees do not ask questions, and the managers think that the message was completely understood. This is, actually, the mistake of the managers: they should educate their teams and provide all the details. A smart thing about involving the employees in the change process is that they become more interested in the change and they understand in better.

A best-practice is to strengthen the core message by periodical advice and clarification, which is recommended to be both motivational and feasible. Another nice thing that can be done by the managers is to ask for feedback. By this, the employees really have a role (a collective one) and all of them will share opinions and analyze the change, understanding it. Also, question will rise in their heads.

1.8 The Organizational Culture

Change Management is strongly related to the culture of the company: as long as the change doesn’t fit the organizational culture, the chosen change is wrong. The assessment of the cultural landscape at each level of the company is critical, because the leaders must understand and take into account the cultural and behavioral factors, which directly influence the change process. If something goes down, the speed and intensity of the change will grow in the same direction. Too often, in business environments, the organizational culture is assessed too late or not at all.

Organizational Culture is very important, as it can provide information about the readiness of the company to change, emphasizing the important issues that are to be dealt with. This diagnosis of the culture is offering a path to the core of the internal business environment: it brings to surface the difference between the reality and the values that the company should have had. Through changes, the companies try to return to the common baseline of the organizational culture, and using these beliefs and values the changes that are to come would be managed properly.

The culture should be addressed explicitly, as any other part of the change process, once it is understood. The top managers and the change leaders should transmit the message of the culture explicitly, mentioning and emphasizing the behaviors that would best fit for the forecasted environment of the company, after the change is done. Also, finding ways to reward and model the behaviors of the employees, in order to be according to the change, is compulsory.

As organizational culture is a sum of shared beliefs and values, attitudes and behavior, all defined during the history of the company, change management can either create a new culture, combine different cultures, or reinforce the existing one. The organizational culture is the core due to and according to which the company works. If it changes or if it needs a change, this must become a priority for every company. Each employee should identify with the culture of the company, otherwise it may not be the right company to work with, subjectively.

1.9 Changing – Part of anyone’s life

As I said earlier, change management involves risk management: always be prepared for the unexpected because only rarely change programs go properly. Human’s behavior is full of surprises and unexpected things can happen. Any resistance that could be anticipated falls apart in front of the unexpected behavior. The assessment of the changes’ impact must be continuous in order to effectively manage them, as to proceed to the following transformation. Change leaders must adjust by necessity the situation in order to maintain its balance, taking decisions according to both rational data and feedbacks from different stakeholders.

The main idea is that change management is not only about the enterprise, it is about individuals, too. Officially, it is an institutional transformation path, but it is also an individual journey. Mathematically, people spend around 40 hours/week at work, which is a big part of their lives: placing apart the sleeping time, work occupies half of the people’s lives. There is a second family there, and any change might turn into a conflict between individuals, or the opposite, also. Any change is important, employees want to know how is work affecting their lives, what will change precisely, what are they expected to do, how will their performance be assessed, and most important: what will be the environment like? Being a second home, it is just like a house: let’s say that the only internet source was a desktop computer connected to a cable. What would the future be like if there was installed a wireless router?

As a change leader, it is hard to deal with that. They have to involve many people in the change process and to reward them, but also they must sanction or remove the obstacles, even if they would mean firing. Even if many leaders are aware of the matter of the people, dwelling on the processes on changed, planned previously, looks easier and more approachable tan fighting with the human issue: not concerning with that looks simpler and many managers simply impose the change. Still, the most successful Change Management cases were the ones where the soft side of the process was well managed.

2. Research methodology

Research methodology is one of the main components of a license degree, since its applicative part is directly dependent to the methodology used for data gathering and interpreting. This applicative side makes the difference between an unpractical license degree and one that is contributing to an economic field with measurable outcomes.

I believe that the definition and exemplification of the research methodology used in this document are needed in order to better understand the further analyses that are to be presented.

2.1 Definitions of the research’s main conceptual terms

The method is the cognitive model by which one tries to gather new data in order to interpret them for new information and knowledge. The method is the one that sets the first criteria of differentiation between the research tools and permits different approaches of the same data collection from different points of view.

The technique is the operationalization tool for a certain method of research within a representative context. It is a sub-unit of the method, representing the specific way of gathering data. For instance, the method might be the interrogatory one, while the technique is the questionnaire, or a similar technique subjacent to the interrogatory method.

The instrument of research is the physical (or perceivable) form of the technique, projecting the technique’s goal into a perceivable and data-gathering tool. For example, if the technique is the questionnaire, the instrument would be its content, by which data is collected and interpreted through a procedure, which is the way data is analyzed.

I am describing the above terms because understanding the research methodology is essential when it comes to the interpretation of the data and to the knowledge acquired after interpreting a case study.

2.2 Description of the methods used for the research

As a quantitative method, I used a nominal scale in order to measure the evolution of the salaries and some indexes regarding the number of employees. More precisely, I analyzed the evolution of the costs, the salaries and the profit relative to the implemented change, the number of employees that were fired or hired on different projects and in different departments, and the number of employees that were relocated from a project to another. Of course, these information are confidential and I cannot provide them as a matter of metrics, but it was extremely helpful in the interpretation of the effects of the change.

As a qualitative method, I used the programmatic observation: since I as an employee of the company I made the case study on, I could observe easily and methodically the reactions of the employees to each step of the change, the level to which they were asked to be involved in the change process and, more important, the level to which they wished they could be involved in the whole procedure used for the changes.

Also, as another qualitative method, I used the interview. It was unstructured, since it wasn’t an official interview with any of the employees. Since I was an internal employee, I had a big number of discussions with all the employees on the matter of change, and this helped me a lot in discovering both the objective opinions upon the change, but also the feeling and the subjective thoughts the employees had upon this subject. To my mind, change management is a science that deals with the feelings of the employees and the way they can adopt and adapt to certain steps during the business processes. Talking to the employees as a friend or colleague, and not as an interviewer, made my work easier regarding data gathering and I could empathize with them when it came to any subject related to the effects and the recommendations for the change.

Of course, the main method that I used was the case study one: my case study will present the real situation from the company, with its positive and negative factors of the change and the afferent analyses. Since I was employed in that company until recently, my opinions could have been more subjective than objective, but this is both a positive and a negative fact. The positive side comes from the fact that I can easily empathize with the employees and I could feel the effects of the changes on my own, being also involved in most of them. The negative side comes from the fact that the information that I gathered my not be properly analyzed: this is why I consider that a good structure of the change process analysis is mandatory and extremely important when it comes to the objective analysis.

My case study involves a good knowledge regarding the business processes of the company and the company itself, correct and full information of the situation of the company and its evolution, but also a very good knowledge and an assumed responsibility when it comes to the research methods and the investigation ones, which I used both voluntarily and involuntarily. Also, a pertinent analysis of the efficiency of the change was done throughout the whole change process, being also affected by it and involved directly in it. One of my tasks regarding both the change process and the analysis for the case study was to be part of the way by which the changes could have the expected and wished outcomes or not, the percent to which the targets of the change will be achieved, a correct and adequate interpretation of the data obtained as a result of the research and an opinion related to the possibilities of determining a way by which the change process could have been better or worse.

2.3 The observation point

My position for observation was as an internal employee in the main office of the company. I worked as IT support consultant and junior system administrator, and my main role in the business process of the company was to be always updated with information regarding the situation of the company and each project and department itself, in order to upgrade periodically the technological environment in the most adequate way for the working environment and its evolution. Another main task that has its importance in the change process and in the analysis of the case study was to forecast the technological needs that may occur in the future, being it on short term or long term, and to respond to the current requests of the company, which came directly to me and their implementation was needed as soon as possible.

In order to do this both for the company and for the analysis of the change process, I had to gather as many data as I could from a wide range of employees, consulting as many colleagues as necessary and as many documents as requested.

2.4 The characteristics of the analysis

The analysis is based also on a comparison between the noted observations and the vision, mission and the values of the company, which reflect in the organizational culture, which has a very important role in the change process: in my opinion, a change and its whole process reflect themselves the level to which the supposed organizational culture is true, according to the one perceived by the majority of the stakeholders.

According to Yin, my case study uses a combination between the linear approaches (IMRAD), the chronological approach, and the non-sequential method of approaching changes. My analysis is based on a combination between a per ensemble approach, analyzing the changes both in time and per department or project, in a non-sequential way, considering the fact that the activity of the company can be structured considering a variety of criteria.

3. Case Study: RINF Outsourcing Solution

– Changing the business orientation

In my opinion, a good example for change management in an IT company is regarding the company RINF, which chose to cross from outsourcing to production and support.

3.1 Company description

RINF Outsourcing Solutions is an IT Outsourcing Company which started in 2006 with the vision of becoming a reliable partner for businesses and organizations, aiming to establish influence within the industry. Year after tear they invested the knowledge and expertise in each project that they committed to. Soon, they realized that the growth was proportional to the core principle of always offering tailored solutions in every customer relationship. Financially, that was seen as a continuous growth.

In such a rapidly changing business environment, the clients need a business oriented partner that can build innovative solutions and relieve them of their current challenges. RINF is driven by the same mission as the customers: to provide the best service possible to improve the customers’ lives.

Another principle is always keeping an opened mind and seeing every project as a new opportunity for innovation, even when addressing a familiar industry, when the temptation is to reach for an established solution.

Today the organization is formed of almost 400 skilled and motivated people that work with a variety of technologies in an environment that encourages innovation and creativity. They all stand by the same beliefs: they truly think that progress can only be achieved through science and technology, as it is the answer to all human quests and that innovation is the path to go there.

I have been working in that company until recently and I approve that the organizational culture is well adopted by each employee: the level of motivation is high, they believe in their missions regarding their projects and, most important, the company successfully manages to express a feeling that each employee has its special role.

The mission of the company lies under the statement that “Our mission is to provide our clients with the strategic technological advantage that drives business growth”. Technically, the company have mostly chosen projects that are mostly business oriented. For instance, one of the main projects is one which is about a software program that correlates the activities of a hospital (mainly private medical services) with its partners and clients.

Its vision is to become one of the most appreciated and respected provider of technology services and products. Still, there is a long way until they reach this target, and there is a lot of competition to face on that path. To my mind, the growth rate of the company is still under the limit that would promote RINF to the top IT providers, but they have always been on an ascending slope towards that goal of theirs.

The values of the company are the following:

BELIEVE: We believe in the unique contribution of each individual.

EXPLORE: We are explorers, we are curious and we are doers.

SHARE: We support, coach and mentor for success.

REINVENT: We aim to constantly reinvent ourselves and our business.

ENJOY: We enjoy our work. Passion fuels our actions and we meet challenges with optimism.

Being a company of mostly young people, with an average age of 26 years, they are a little community of dreamers, which continuously work and learn in order to achieve high professional targets. (Rinf Story Archives, https://www.rinftech.com/rinf_life_type/rinf-story/)

3.2 Departments

For a better understanding of the business process, a description of the departments is needed. Their structure is simple, which allows changes to be implemented more easily.

3.2.1 Sourcing and Resourcing

This department has the main task of assigning and finding work force suitable for free positions in the company. As it can be seen, it is split in two sub-departments: Sourcing and Resourcing.

Sourcing is the department that recruits and searches continuously for candidates from outside the company. It has a very important task, considering the fact that nowadays, in the IT industry, there are more free positions than unemployed IT specialists. Its approach is similar to the sales one: the characteristics of the job of a specialist are similar, and the salary of the IT engineers is also growing with each project they attend to. It comes to the advantages of the job and the benefits of the employee when they are to choose between several offers. Since they are continuously searched for on a variety of online social and professional platforms, you have to surprise them as a recruiter. Also, the level of consultancy and the approach method is very important for a recruiter: non-verbal elements usually convince the IT specialist to come to an interview. Many time, out of 20-30 interviews, 1 or 2 employments are done successfully.

Resourcing has an even harder task: they have to reassign employees when a project is done, or when they want to change the project. Since the IT Engineers receive a variety of offers from other employers, the Resourcing Department is the one that has to convince them to stay and negotiate all the conditions. They also make sure that each employee understands the way the company works, thus any employee is feeling that its role is important for the whole company, not just for the projects it is assigned to.

Each employee from sourcing or resourcing is assigned to one or more projects: usually, the recruiters are assigned to two projects at most, and the people from Resourcing department have up to ten projects under their assignment.

3.2.2 Sales

This department has the role of finding new business partners, new projects, new leads, but also they must maintain the relationship with the business partners.

Thus, there are the Accounts Consultants, which maintain the relationship with the partners, being they clients, suppliers or both. For example, eMag is also a supplier and a client. It supplies with technological equipment and support regarding the physical problems that may occur over the equipment, and a client regarding their Careers web page and their recruiting software, for which they receive support.

The Salesmen are also strongly related to the Accounts, but their job interferes when it comes to new projects. They search for new projects continuously, usually using the relationship portfolio of the clients or suppliers, which will be received if the business partners will decide so, agreeing with their own partners.

Recently, a new team was founded under the Sales Department. This team is searching for leads that can be also buyers of RINF’s future products or partners that need outsourcing and that also can promote the future products of the company. For example, Avangate is a company providing online payment solutions. RINF is going to use their solution in the future, and until then, the company will provide outsourcing for their sales team, one that is also is designed to find leads. This is also an important fact: RINF does not provide only IT outsourcing services, but also sales and call center outsourcing services.

3.2.3 Finance and Operational

This department provides services regarding the legal terms that are to be established for each contract signed by the company, the finances management and also the management of official documents.

The management of documents is done by a small number of people, which split equally the business partners with which RINF have signed contracts during its life-time. Also, they negotiate contracts in order to fit the requirements of the business partners or the employees assigned to them under the proper legal terms.

The legal sub-unit of Finance and Operational has the unique task of correcting and updating the legal terms provided by each document signed by the representatives of the company, in order to act according to the law and the internal legal rules, established by them, too.

The finance department is assigning budgets for each project according to the requirements of the partners and the project managers, establishing salary lists and they also analyze the financial terms for each employee, in order to obtain the best efficiency and the best profit margin, which comes as a difference of the budget allocated by the client for each of the employees assigned to it and the gross salary paid to the employee.

3.2.4 Technical Core

As it says, this is the core of the company, which has more than 75% of the employees of the company, which is 300. It is split both locally and financially depending on projects, which may take place either on client or in-house. It is providing separate network configurations for each team and it continuously updates the computer configurations.

The projects, as they are called in the business plans, are of different types: there are projects of outsourcing, which means that a team of employees works for a project of a client. Most of the employees are assigned to different projects of Intel. Also, there are internal projects, which are meant to provide development of software services or products. This is a new area for the company, and area for which a change was necessary and which will be described later. Besides that, there is the IT Support team, which manages the network, software and hardware configuration for the head office of the company.

3.3 The Change

After June 2015, there was expected a decline of the projects for the next 2 years. All the small projects will be done until 2017, which means lower profit for the company and low budget allocation for future external projects. Also, the most important projects will be ended due to a variety of reasons.

For example, Docapost is a call-center dedicated to Peugeot and Citroen, providing support regarding a software application that acts as a map for their cars, a map that contains the profile of the buyer and that is filled with more information than a usual online map, like Google Maps. It can also provide information, let’s say, for the closest restaurant, giving details about it, too. Last year, Peugeot and Citroen (which are part of the same group, with similar shareholders) decided that the project will end in 2017, when they will stop the support provided by our team, which is the only support team for that application. They didn’t decide if they will change the application with another one and continue to sign with RINF for another contract or if they will end the development of any software application, but the company needs to be precautious regarding this.

Also, Intel Romania will no longer exist, which will mean that the biggest client of RINF is going to end the contract. The employees assigned to Intel have to choose between staying with RINF and changing the project or staying with Intel and leave abroad. Again, RINF must be precautious and for sure this change will cause an important loss in the portfolio, and also in the finances.

The other projects, which are smaller, are for foreign companies, which will probably end the relationship with RINF along with the project’s end-date. This is why RINF decided to open offices in their countries: RINF considered this an opportunity to get even closer to the clients and to start new partnerships with the partners of the clients. For example, the office from Sofia, which was opened at the end of the last year, has already signed several important contract with the partners of the client from Sofia.

The management concluded that these are some important reasons to switch from an outsourcing company to one that develops products. They changed the financial plans, they reassigned the employees that ended external projects to the internal one, which are meant for development, but also they decided risk regarding the head-office: the company moved from a business local space to another, which is three times bigger than the old one.

In order to be sure that the change is managed correctly, RINF hired an external company which provides consultancy regarding this important switch from outsourcing to development, which will last several years from now. They schedule meeting once at two weeks with them, and all the board managers attend them in order to reach the best conclusions.

3.3.1 Changes regarding the Offices

As I said earlier, RINF needed a bigger head-office: most of the employees were working on the client’s site, and since the projects are almost at end-date and the employees will be assigned to the internal projects, there was a need for more space. This change didn’t affect the employees too much because the location is still very accessible, being very close to Promenada Mall, neat Aurel Vlaicu station, it reaches the highest standards for a head-office (A+), and the location is also designed to have a “Relaxing Spot”, where the employees can play billiard, fuss ball, air-hockey, or they can play on the X-Box a variety of games. I can strongly say that, from the employee point of view, that was a very good change, one that was also very welcomed. I am saying that it was a risky one because the costs were very high and almost unaffordable, and the salaries at the end of 2015 didn’t grow as much as expected by the employees.

Also, in order to be able to profit from the relationships gained from the clients’ portfolios, the company needed to open offices in different countries: they continue to outsource, since the software development is still a plan for the future and no product is now done properly. In order to do this, they need to provide their services from a more accessible location for the client. In order to do this, there have been opened offices in Berlin, Bucharest, Kiev, London, Paris, Sofia and Wroclaw.

3.3.2 Changes in Recruitment and New Projects

The recruitment process is changing his methods because the targeted candidates are not the IT specialists: since the IT projects are coming to an end, the Resourcing team will relocate the employees to internal or current external project. The main task of the recruiting team is to find suitable project managers for the internal projects.

Up until now, the project managers of the external project were assigned by the client, thus the RINF recruitment team didn’t need to search for them. But many times the Project Manager, who was working on client’s site, had to travel to Romania quiet frequently. This is another reason why there were opened new offices in foreign countries: this way, the client would accept more easily the terms of the contracts.

As it can be seen, the Sourcing team didn’t need to recruit Project Managers. Now, a series of trainings is done in order to make sure that the recruiters will know what to look for when they are recruiting project managers. They have to be good leaders, they have to be innovative, suitable for projects that are going to start from nothing, and most important: they need to have in mind a good profile for the possible candidates for their projects: the IT specialists that are to be hired under the supervisory of the project managers must suit its requirements as much as they have to fit in the RINF organizational culture.

Besides that, the recruitment team is also looking for young IT engineers with innovative ideas. For example, the MATT project was started by two new employees, who were winners of a variety of contests regarding robotics. Now, they are working on a device that is designed to do a variety of tests on smartphones and similar devices. Of course, there is a wide range of software which can do that, but since smartphones switch their background depending on its position in space (vertically, horizontally, or moving on different angles), the necessity of a physical device that can test them have raised in the technological environment. It has to be able to maneuver the smartphone and to use it with an artificial “finger”, which is a stick specially designed to perceive the pressure and the distance. It also has to be able to analyze and interpret the results from the smartphone, which requires artificial intelligence.

Another new internal project is Big Data, which required a lot of work for the recruiters. They had to find people that can use Big Data technologies, that can make them better and more efficient, and that also can do this in cloud computing. Big data is a technological area that is still growing, faster year by year. Big data means fast and efficient access to a very large amount of information, which can be processed at very high speed. There are many tools able to do this on the local computer, but the cloud component of this service is the new characteristic that is searched for by the IT Engineers. Still, this project is at its very beginning, and it is expected to be done within three years.

The recruitment process has encountered another new opportunity: SAP. SAP is a software that manages huge amounts of data for big companies, which has thousands of entries in their databases daily. It requires a lot of support after its implementation within a company, support services that may last for years. This is why RINF decided to hire IT specialists able to do the support task, and it is forecasted that in two years from now RINF will be able to implement SAP for its big clients.

SAP is a very expensive niche, and RINF risks for a large amount of money. For example, changing a single line of code in few minutes might bring up to 1000 dollars to the company that offers support. On the other hand, the big companies that opt for SAP are contacting the companies that already made their names big in the industry. It is a software that is very hard to handle and it requires very skilled IT specialists.

Nevertheless, RINF has another project, which is expected to be done by the end of this year: Dashboard. This project is an online platform that will enable the companies to gather all of the important information online, and not only: each department can have its own web page, which can be integrated with a variety of IT solutions that the company uses. Since everything is going online these days in the IT environment, the communication and the distribution of information must be available anytime for the employees. The accessibility of information is one of the main trends that are followed in the technological world.

Dashboard is going to act as an intranet service, with the characteristic that it can be accessed also from outside the network of the company. Of course, there are many tools similar to this one, this is why the developers are not going to develop all the services, since the companies probably already have bought licenses for a variety of products that do similar things, but at a lower level. This is why this tool is going to be cheap, and it will be able to integrate with the tools used by the clients.

Maybe, during time, the necessity of a cheap online tool that does them all will appear, but RINF needs to gather the necessary experience and knowledge to do that. However, it might sound simple to create such an application, but the hardest part is to make it efficient: nobody is going to buy a tool that is slow, creating time lags that are lost uselessly.

The newest project is about designing a device that can track all the equipment in a company virtually. This is mostly a security tool that will manage the devices of a company wherever they would be on a limited area, even if they are closed. Let’s say that an employee is suspected that it provides confidential information to an external stakeholder. It can be tracked, analyzed, and all the information from the equipment that was given by the company can be found out. Mostly, it is a tool for internal security.

The bad side of this change is that project managers are hard to find, considering the requirements. Of course, the budget is limited, and the project managers must fit in the budget schema. There is assigned only one manager for all of these new projects, and it is very hard for him to manage them, and it is also very hard for the employees to develop something new without a leader that can spend the necessary time for such big projects.

3.3.3 Changes in the Resourcing Department

Since many projects are coming to an end, the Resourcing team must relocate the employees that are empty of projects to internal projects. The problem is that the budget for the internal projects is limited, mostly because they produce no profit for now. This is why the hardest task of the resourcing department is to convince the client to hire the employees that were assigned to it, or to fire these employees. In the environment of IT Outsourcing, the recommendations represent the main recruitment tool. If this situation will create bad marketing for the company, recruiting will become very hard, not enough candidates will be hired, leading to the failure of the projects and the loss of clients.

Also, this is a very difficult period for the company since almost all the marketing team was changed within one month, so the only promotion process is the one done by the resourcing department, through the candidates, the employees, and so on. They are people and they are going to talk about this situation with other IT engineers, and the bad words are always easier to spread than good words. Also, they are more efficient. This is why RINF is allocating a budget in order to pay the employees that have no projects for one or two months at most, until there is a new project found for them.

Also, the Resourcing Department is doing something that I consider a best-practice solution: they organize trainings weekly in order to help everyone understand what is going on in the company. For example, a project manager is asked to hold a training about project management, so that everyone can understand the basics of the management processes, or a Resourcing Specialist is holding a training about Resourcing. Anyone from the company can attend these trainings, but only 20-30 persons per training are interested in those subjects.

But after this initiative of theirs, the employee of the companies are talking about the trainings: for instance, if an employee went to a training, the next day it would be asked for details by its colleagues. And the goal of the trainings was reached too: most of the employees are now better understanding the way this business works. This is very important for the change, since any change that involves all the people in the company has an integrative part, which means that everyone must understand the business process, thus the change will be understood better.

3.3.4 Financial Changes

The most severe changes were the financial ones. Budgeting schema had to change, since lots of expenses were forecasted. Before this major change, there was a budget for each department. It didn’t matter that a recruiter worked on a project for six months and that project generated profit beyond expectations: the bonus remuneration of the recruiter was calculated relative to the budget of the Sourcing Department.

Now, there is a budget for each project, involving all of the employees assigned to it, being they part of different departments. Let’s say that a recruiter, a sales man, a maintenance consultant, a project manager and seven IT specialists are involved in a project: they all are assigned to the same cost (or revenue) center in the budgeting schema. Of course, each of them has a rate of efficiency according to which their financial expectations are reached or not. The calculus now is done separately for each project, and of course for each employee according to the project it is assigned to.

As expected, there are some employees that are not assigned to any project: for example, the financial and operational department is considered a project itself in the financial schema. Or the board managers: they are assigned special formulas of efficiency and budget analysis.

The worst part is that this way, the new internal projects have a very limited budget, but it has to be assigned. Practically, they generate no revenue for now, and it is expected that the amortization of this cost will be achieved over more than four years. Being assigned not much budget, their resources are limited, but everything that is necessary to be purchased is assured, even if the purchases are done at the lowest prices and the quality of the purchased items must be provided, in the future, by the intense work of the innovative IT specialists.

The easiest part is the budget assignment for the external project: in the past, all the money that came for the clients for the IT department were gathered together and spent for the Technical Core environment. Now, each project has its own budget schema, and the costs and the revenues are calculated separately from the other projects, relative to the money that came from each client.

The negative effect that came upon the company is the one which states that while the employees assigned to a client’s project have the best equipment, the others have the minimum necessary requirements regarding this subject. Even if they understand the situation they involved in and they are thrilled by the product they create themselves, they are still frustrated by the situation: change management is a science of people and their emotions, and frustration must be transformed into motivation for these employees. Unfortunately, not much is done for that.

3.3.5 Operational and Legal Department Changes

Since the internal projects have started, and some others are starting soon, any kind of production requires certificates and licenses, authorizations and so on. The operational and legal department were the ones that guided the employees and the company on the path to certification and licensing. For example, the MATT team, which is building a robot with artificial intelligence, need licenses for some software they use, and certifications and authorizations for building that robot for future production purposes. Also, they need to build it according to the legal requirements.

Also, there are other certificates that were needed in the company: the IT support team needed certificates for the programs and operating systems they offered support to, the tools from JetBrains (IntelliJ Idea, PhpStorm, PyCharm, etc.) have licenses that needed to be renewed, and they were all gathered together on a company license, having a negotiated price, better than the one obtained from the sum of the renewals of the licenses separately.

At the beginning of this year, the new Sales team needed some new tools from Microsoft Office and new licenses had to be purchased.

3.3.6 Changing the name of the company

In the history of the company, it has been proven that the name, beside the fact that is, for some people, hard to understand, and even if it seems to be an abbreviation, it is not, the board managers decided that the name should be change into one that should also suggest that the company belongs to the technological industry: the name changed from Rinf to Rinftech.

3.4 The way the change was perceived by the employees.

At first, the employees were disappointed by the change, considering that it is too risky and the effects will be all negative. On the other hand, they were thrilled by the fact that something new occurred in the company. At the same time, they believed that their work would be affected by the change, saying that a change should be done considering the opinions of the employees, too.

Indeed, the changes were sudden, and I will analyze them separately. What’s more is that the decisions were taken only by the board management, and they were announced all of a sudden. The employees were not prepared for the change, they were only announced that the change is going to happen. Of course, there are cases for each change where some employees are directly affected by the change (i.e. Sourcing, which is suddenly recruiting project managers instead of IT specialists), but I am talking about the majority of the company.

Actually, at each change, there was a side that was affected directly, and many sides that were influenced indirectly, but none was consulted. And the affected side was prepared for the effects of the change, not the change itself, and always after the change was implemented. I believe that the company faced major changes that are about different fields, but which have the same goal and the same main cause, meaning that they are all part of a big change.

Firstly, when the office was changed, everyone knew that half of a year earlier. Still, the moving was done all of a sudden at the end of a Friday work day, and the network configuration was done poorly in that weekend. Of course, things were forgotten at the previous office, the network at the current location was working slowly and the upload/download speed was unstable, and other things that were not right.

Secondly, the whole moving process was done by the Marketing Manager and the System Administrator, which were not at all qualified for this kind of work. Even if they did their best to manage this change, it was not done properly and its management was done poorly. It was a change that was not communicated constantly to the employees, which were unaware of its main aspects.

Happily, the employees were thrilled by the fact that the new office is one of the highest class, it has a “Relaxing spot” and that maybe the network issues that were encountered at the previous office will not be perpetuated. Unfortunately, the network problems were still encountered.

Regarding the offices opened in the foreign countries, their managers were suddenly announced and they were named directly, not allowing the employees to apply for this job. Of course, each of the named ones had contesters that were as good as they were, and of course there were rumors about the fact that they didn’t even had the chance to try to make one step further in their professional life.

To my mind, this fact was unethical and it lacked the main principles of promotion to a new job, to which everyone should have equal chances. At the same time, such risks and such costs should have involved better management when it comes to choosing the people that will start a new professional life in another country and it also should have involved better communication with the employees about the new offices. Instead, the employees were just suddenly announced about the offices after they were opened or right before they were to be opened, when the future branch managers were already assigned.

The new project, also, were established before there was assigned a manager (or more) to control them. Now, there is only one manager to guide all the internal project, and I believe that this is a mistake, considering the following facts: that manager is not experienced or acknowledged regarding the variety of the fields and technologies used in the internal projects, and there are not sub-managers meant to supervise and organize the work on each project. Only one manager does this, and even if he does his best, I do not believe that the work process is as efficient as expected.

The financial changes were the most severe ones, because the motivation of the employees was at risk: reducing the budgets, many of the salaries were not raised, and also there were very few bonuses at the end of 2015 for the employees. This lack of motivation convinced many of the employees to leave the company. For an IT outsourcing company, this is a very bad fact, because the need of employees is crucial in this industry.

These changes were imposed by the board management, and another change that frustrated the employees is the internal chat software: it was changed three times during a year. It may not seem severe, but changes must be done at a slower pace, in smaller steps, and only after a step of the change is well adopted by the employees, another step may be implemented. An employee has its own routine and it cannot be changed all of a sudden, and of course it cannot be changed frequently. Even if a change is sudden, it can be adopted easily sometimes, but changing little aspects of the routine often leads to stress.

As I said before, Change Management is the science of the people’s behavior in the context of a change. And of course, the employees are the many and the board managers are the few. When few people impose a change over all the others employees, without consulting or even preparing them properly for it, frustration and lack of motivation interferes with the quality of work, which might fall.

Considering all that, the CEO was all aware of this and it anticipated very well, as far as I know, the consequences, being they good or bad. He is a man that risks, and that calculates the risks very well by now. He always manages to find compensatory facts for each loss, and as I know, it knew that the changes will happen at a fast pace and that the employees will be stressed and confused.

This is why it decided that two good things are to be done for this regard: firstly, it hired many new employees that will start the work in the company after most of the important changes were adopted. Secondly, he allows many IT specialists to join the new internal projects, which start from null in order to create new software or tools. The task of creation can be very motivational sometimes. In this case, it was motivational for most of the employees of the company.

Even if there are only few people working now on new projects and there are also few new employees, considering the total number of the work force (400), these changes were considered some “fresh air” for the company, as some of the colleagues said. It is all about the thrill and the curiosity about what would come out of all these risky changes and about the innovational side of these initiatives.

4. Conclusions

Taking into consideration the case study and the theoretical characteristics of change management, I will draw several conclusions out of the overall analysis. As I outlined in the introduction of this paper, change management is directly influenced by the evolution of the industry and/or the market it applies to. In this case, the IT industry has an evolution that can be placed on an exponential graphic: as time passed, the technology evolved at a pace that increased year by year.

Change management requires, in this industry, many changes that occur often, fact that increases the risk of failure regarding changes because the time for adaptation and adoption for one change is many time longer than the time between two changes. By the time a change is done, an update of it is already appearing in this industry.

Talking about our case study, I reached some conclusions, and also recommendations, that might be very useful in the analysis of this research. RINF Outsourcing Solutions is a company that is growing continuously, even if the rate to which it is evolving is not big enough to reach the state of facing the big players on the market. The working environment is struggling between a corporatist one and a childish one, fact that involves important decisions, treated in an immature way of ignoring some small details that can cause a lot of damage from the business’ point of view.

First of all, I consider that all the changes that have been made were necessary, excepting the one of changing the internal chat software too often. Everything started from the point of changing the business orientation from outsourcing to production, a necessary change considering the conditions. For this purpose, more employees were necessary in the office, thus a bigger office. This change could not be done on short term, and maybe outsourcing will continue to be one of the main fields of activity for RINF in the following years. In order to maintain its position on the market, RINF have to stay close to the client for which it is outsourcing, so opening new offices in foreign countries and expanding the company are also good ideas.

Of course, a company is working as long as there are money to enter the cash flow. This is why I consider that reducing budgets and analyzing them so carefully, along with reorganizing the budgeting plan, were also very good decisions. The changes that came along in the departments of Sourcing, Sales and Technical Core were imminent considering the plan of reorientation, but emphasizing the fact that the company has some “fresh air and ideas”, referring to the new project and the new employees, was the masterpiece of motivation that came from the CEO, along with the Relaxing Spot.

He managed to forecast the risks and the negative effects, but he still didn’t encounter them all. Further in this document I will make some recommendations along with the analysis of the negative effects of the change in the business orientation of RINF.

Firstly, I consider that allowing each employee to have its role in the change and to feel the success of its outputs in the change process is mandatory in change management. Unfortunately, this was not done in the case of RINF. Plans were imposed, and they were also accepted easily, because the importance of the change was not presented from the beginning. It was more like found out by the employees during the change process. This is also highlighting another mistake: the lack of the change statement.

Secondly, many employees wanted to be part of that change and to be involved directly in it, or at least to be listened to when it came to taking decisions that could influence the work of some departments individually. This is also a terrible mistake: if an employee has an opinion and it is not even allowed to pronounce it, it might even consider the final decision wrong and harmful, even if it is not so. Also, there were people who didn’t truly want to be responsible for the change or at least they were not prepared to coordinate one, and others did, but the decision was made by the board managers independent of the opinions of the employees.

My recommendations would be only one, which is the same that I made being part of the change process: instead of allocating a large amount of work to a small number of employees during the change process, distributing the effort of the work force empowered to do the changes would have been easier for the company as a whole and the individual departments themselves.

Let’s say that, regarding the budgets, which is a soft subject for each employee, the Finance Department would have consulted each Project Manager and Department Manager. Moreover, they should have been allowed to present their proposal for the financial plan. This thing happened only with few of the key persons. As a consequence, autocracy was felt through the employees more negatively than positively: imposing the change and the indifference to the opinions of the work force generated stress among the employees. Also, each project has its own characteristics: allowing a project manager to present a financial plan regarding the specific requirements of the project, plan that most likely have been established as a discussion between the project manager and its team, would have created the feeling of being part of the change.

As I felt it myself working in that environment, I can approve that the IT industry require changes that come as fast as the improvements in technology, which happen worldwide. The pace to which changes must happen in this industry require very much attention to small details from the Change Team, because the small details are the ones that make the difference between success and failure: the main purposes of the changes are the few, while the additional details and the affected sides are the many, and history thought humanity that the final decision is in the hand of the majority. In the context of a company, change management and risk assessment might be the ones that fulfill of disappoint the expectations of the stakeholders, thus defining critical moments for the life of the company.

5. Bibliography

Bratianu, Constantin; Ghid pentru elaborarea lucrarilor de licenta si de masterat, Editura ASE, București, 2015

Rinf Story Archives, https://www.rinftech.com/rinf_life_type/rinf-story/

Independent and investigative news – AnonHQ, http://anonhq.com/

Wikipedia, the free enciclopedia, https://ro.wikipedia.org

Doing Business, http://rbd.doingbusiness.ro/

United Nations Public Administration Network, http://unpan1.un.org/

Strategy + Business: international business strategy news, articles and award-winning analysis, http://www.strategy-business.com/