EMU compliance projects can require disarranging the modus operandi of companies. Where vertical or departmental structures exist, success can be assured by a strong and adaptable change management approach. Wisely endorsed, such an approach supports the rollout of the horizontal process-analysis needed to assess the modifications on business, operations and technology.This paper proposes a framework and methodology to manage the challenges of the EMU compliance to the organisational dynamics of companies in highly impacted sectors
THE MAIN CHARACTERISTICS OF A EURO PROJECT
Few corporate endeavours resemble the road towards EMU compliance. The unmoveable deadlines, the multiple uncertainties and especially its far-reaching implications for corporate strategy and organisational dynamics give the project a mystic aura. Elucidating and understanding its characteristics enables managers to approach it with the required confidence and preparation.
Such a profound understanding of the implications of the euro will lead to the definition of the appropriate action plans based on prioritised requirements. These are derived from a combination of the company’s business, operations and technology knowledge. By describing the uncertainties, and their implications, flexible solutions can be designed coping with multiple impact scenarios. According to our most recent experience, very few issues do remain uncertain.
Deadlines and technical implications are important, they should however not overshadow strategy setting and change monitoring. The impact on organisational dynamics is often, in fact, underestimated. Due to its nature, the euro can have a corporate-wide effect that requires a cross-organisational analysis of current business and IT processes. This is especially true for financial institutions where compliance teams have to encompass the whole organisational structure to ascertain the changes required.
Hence, it is necessary that the euro is considered as a Business project. In contrast to Year 2000 preparations, where the IT department can take the ownership, EMU compliance requires a strong interaction between business and IT experts to ensure that requirements in one area can be endorsed by the other, and vice versa.
SETTING A FRAMEWORK FOR THE EURO
Management commitment, resources mobilisation and structured process and project management are key success factors for the euro project. A common change methodology and an open communication environment are the underlying enablers.
The role of management is essentially to provide a euro team with the necessary assets for its success.
Setting a corporate vision towards EMU is vital. The main questions to be developed here are:
1) Shall the company go for a Big Bang approach or should it wait until an undefined date within the three-year changeover period?
2) What are the missed opportunities associated with adopting the latter solution?
3) How will business strategy leverage on the euro?
Whichever the vision, management must strongly support the change team throughout the project lifecycle. The project gains company-wide support and credibility by being highly visible and by encouraging open door interventions. Its leaders should be chosen consequently.
Mobilising And Catalysing Resources
Its impact often draws in the necessity to involve the company’s most knowledgeable employees in the project. However, many may perceive the EMU compliance as a bad turn in their career.
This is particularly the case when corporate experts are pulled out of earlier defined "more strategically important" projects. Motivation, leadership and management support are key to effectively mobilising resources to this first priority corporate objective.
Roles and responsibilities need to be defined as precisely as possible while leaving a maximum of freedom to the flow of information (a kind of "Corporate Schengen Convention for information, resources and knowledge mobilisation"). For example, the euro steering committee will be responsible for defining the vision and the basic business rules under which the currency will be adopted. The euro project team will then challenge these rules by analysing their impact on corporate processes and translating them into modification requests addressed to the IT architects.
Also, external counterparts should be involved in the project from its very beginning. A continued contact with customers, suppliers and other market actors will further assure that euro-related decisions are market-oriented and smoothly integrated into the current and future business environments.
By involving external partners, early adopters are not only more confident of their euro approach, but they can also seize the opportunity of using the EMU as a mean to strengthen, increase or extend their market share. For example, some of the strategies that are seeing the daylight in the wake of 1999 include customised information sessions, training programs, consulting and help desk services. Such efforts allow a company to attract new customers or increase intimacy with existing ones.
Adopting A Change Management Approach
The euro project will increase its chances to be completed on time, and to requirements, by setting and using a sound change management oriented framework.
Some of the characteristics that must guide this framework include:
programs and are supported by a clear identification of the information recipients.
PUTTING THE METHODOLOGY TO WORK
Crucial to the success of the EMU-changeover is approaching the impact analysis with a multi-focused view of the company’s activities. The methodology outlined hereafter can help achieve this view. It proposes to split the analysis into three areas: Business Rules Setting, Functional Requirements Depiction and Technical Specifications Development. These are not to be considered as three separate phases. On the contrary, adopting the framework described above implies iteration among the three views. Once the assumptions and decisions in one area have found sufficient support by the others, the iteration process can be stabilised, formal validation rules and approvals can be obtained and further in-depth analysis can take place. At this stage, Test Cases Fine Tuning can lead off to prepare the testing activities required to monitor and successfully undertake the changeover.
For example, the business rule of implementing a euro-only cash management approach from January 1999 will not be fixed until the involved functionality has been sufficiently described and that its feasibility, on a technical level, has been proven. Should the current technical infrastructure not be able to support the expected results, both the functional requirements and the business rules can be reviewed. Business, however, should always prevail on functional and technical issues.
Figure 1: Putting an EMU Methodology to work, an example.
INFORMATION TECHNOLOGY USED TO ACHIEVE FASTER RESULTS
Fortunately, tools and techniques developed over the recent years can help streamlining the whole project development.
Existing software packages can be tailored to the current environment to cope with changes whose definition is regulated by accurate legal rules and that are similar for the economy as a whole (such as the conversion of amounts expressed in EMU component currencies). By doing so, resources can be used in areas that are company-specific and require in-house development.
To enhance communication, multi-angle views and project monitoring, it is advised to retain the knowledge generated during the project in a flexible and interactive repository. The advantages of such an approach are threefold:
LEVERAGING ON EURO PROJECTS
The success of a project should be measured much less by the fact that it was completed within budget and on schedule, than by what it actually brings to the company. Euro project managers must therefore investigate how the substantial costs of conversion could be leveraged to the benefit of the organisation.
The many lessons that can be learned and the precious information gathered during the project can serve other purposes than the mere compliance. The most evident are what the company can learn in terms of managing a cross-organisational project, using well-defined methodologies and building or refreshing its knowledge base. Hence, contemplating the euro as something different than a costly one shot IT development imposed by politicians.
A lot of companies find themselves in a position where re-engineering of existing procedures becomes essential to maintaining their competitive edge. A pre-requisite to perform the preliminary "as-is" phase of any re-engineering initiative is the availability of detailed information about current processes. Obvious synergy opportunities arise with the impact analysis and the functional requirements part of a euro project.
Finally, under the imperative of excluding "nice-to-have" improvements from urgent survival solutions, the wide knowledge that is being created and shared within euro projects could be at stake once the resources are re-allocated. European banks are in the best position to profit from the synergy in compliance, knowledge management and corporate transformation.
Hence, it is not surprising that in many European companies, the first to realise the benefits of taking a broader view on a euro project could well be the EMU teams themselves: the unconscious creators, mappers and integrators of corporate knowledge.
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