Running Head: WORKSHEETS 1-6

 

 

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Worksheets 1-6

by

Anthony P. Niemann

University of Louisville

ELFH 664-50

Spring, 2006


Worksheet One

(Agenda-Setting)

Evaluating the External Environment

1.        Describe the change initiative that you have chosen to use for this course.  It should be based on a problem facing your organization; however, it should be an imaginary (the ODP has not yet occurred) within your organization.  Use your imagination and choose a problem to solve that you find interesting.

My change initiative involves the way contracts are bid and implemented by state government in the Commonwealth of Kentucky. Specifically, the change initiative for these worksheets involves problems I have experienced with printer services by IBM authorized service representatives since going to work at the Cabinet for Health and Family Services, Office of Information Technology (CHFS-OIT), in June of 2005.

CHFS employees make up 40% of state employees who use Information Technology Services. It is probable that the present printer maintenance contract with IBM covers all state organizations. Assuming this is true, the contract IBM has been awarded covers an estimated 9500 printers and could be worth $1,250,000.00 or more annually. It is difficult to determine who had the responsibility for writing the contract unless you are at the top echelon in the chain-of-command. I examine this problem from a perspective of a network analyst in CHFS-OIT. Critical problems have been noticed at the L&N building in Louisville, Kentucky, which has approximately 130 printers covered by this contract.

2.        Describe the current external environment of the organization (social, political, world, etc.).

Kentucky was ranked twelfth out of 50 states in the use of digital technologies to better serve their state’s citizens (Center for Digital Government, 2005). While acknowledging that it is hard to differentiate between management and politics, one website claims that the political leadership has severely damaged many processes (Government Performance Project, 2005). The problem seems to be associated more with the culture of government organizations than with either of these two issues, however.

The external environment of the organization includes the overall structure of state government for Kentucky. There are three main branches of government: executive, judicial, and legislative. The executive branch consists of twelve main sub-branches. One of these branches is the Finance and Administration Cabinet (CFA)and another is the Health and Family Services Cabinet (CHFS). While CFA is assigned responsibility for procurement of goods and services as well as employee training, these same functions can be carried out for CHFS employees by departments within this cabinet.

Meaningful change initiatives are harder to implement in bureaucratic organizations than in many corporate organizations. The state printer maintenance contract bid was won by IBM. Previous to this, Pomroy held the contract. There are only a few companies that are large enough to accept printer maintenance contracts on a statewide basis. IBM probably knew what the amount of the previous printer maintenance contract won by Pomroy and decided to undercut that bid. When IBM won the contract, they successfully offered Pomroy a sub-contract to provide printer service. IBM and Pomroy could be expected to offer resistance and explanations to any proposed changes that implied that printer service is unsatisfactory. As records are not maintained by the state, it is difficult to respond to resistance and excuses offered by IBM and Pomroy.

3.        Describe the current state of the industry (trends, technology).

State government is a bureaucratic and hierarchically structured organization. Input from the workforce is welcomed in verbiage, but not in fact. State government tries to respond to the will of its citizens in response to the political process. The typical way that problems of this type would be dealt with would be in response to a budget-crunch, or a result of executive branch administration changes. From my limited perspective of nine months as a CHFS employee, it seems to me that state government management personnel have not received directives to insure that printer service contracts are being fulfilled. Consequently, there is no oversight of whether IBM is fulfilling the terms of their contract. I believe that IBM has become complacent in insuring that these terms are being fulfilled.

All 50 states have a department similar to CHFS-OIT. All 50 states also contract some computer services out to private corporations. Most major businesses also contract some computer services out to outside vendors. In the majority of cases, internal employees will examine the problem to determine the scope. In the case of printers, if the problem requires extensive maintenance activities, outside vendors are contracted, or a new printer is purchased. For example, the School of Education at the University of Louisville handles their printer problems by first contacting internal employees. If the problem involves something other than minor maintenance activities, a call is placed to outside vendors. Because of the difficulty and expense in hiring qualified printer service technicians, it is a good business practice to contract with outside service organizations for more serious printer problems. It is difficult for any organization to track the maintenance trail on printers that are serviced by outside vendors. When printers reach the number under contract with CHFS, the situation can easily get out of control.

4.        Describe the competition (who could cut into your market?).

CHFS-OIT provides services for CHFS computer users, who in turn provide services for Kentucky citizens. There is no competition, although some maintenance activities are contracted out. There is an inherent problem in organizational structure due to changing administrations caused by the political process.


Worksheet Two

(Matching)

Evaluating the Internal Environment

Stakeholders

The Commonwealth of Kentucky Office of Technology. (COT) is an organization under the Finance and Administration Cabinet (CFA). CFA-COT has responsibility for certain areas of Information Technology, such as email migration, printing services, and network infrastructure. The Cabinet of Health and Family Services – Office of Information Technology (CHFS-OIT) provides Information Technology services for employees of Health and Family Services employees (CHFS). Before 1998, CHFS-OIT was part of COT. The branches were reorganized in 1998, resulting in separation. In July of 2006, CHFS-OIT will once again become a part of COT as a result of a recent reorganization plan.

It is difficult to determine the extent of control that various organizations have over maintenance contracts in state government. For example, CHFS has an internal organization called “Office of Contract Oversight” (OCO), which consists of the divisions of “Contracting Services and Procurement Services” (CSPS). This is a service-oriented office created to centralize and oversee CHFS contracting and procurement processes. Open communication among all internal organizations is essential in order to resolve problems. Given the cultural history and the ever-changing structure of government bureaucracy, it is hard to determine if anyone fully understands the scope of this printer service problem.

There are many questions on how the contract with IBM is presently being carried out. The blame for any problems with how the contract is being fulfilled should possibly be shared by numerous organizations such as IBM, Pomroy, CHFS-OIT, CHFS-OCO, CHFS, CFA-COT, and the executive branch. The issues could be readily solved by communication between the associated organizations. Let’s look at the stakeholders:

Stakeholder

Relationship to the company

Why they are a stakeholder

The Public

State government works for them

It is their tax dollars involved. They have the final say in how government is run.

IBM

Contractor

They won the bid for this contract and sub-contracted it out to Pomroy. They receive $300 for each service call they take on a CHFS printer. The contract can be expected to be valued at $1,250,000 annually

Pomroy

Sub-contractor

Perform printer service as sub-contractor for IBM. IBM won this contract from Pomroy, who held the contract until about a year ago. Problems most likely still existed. In the past 18 months, several problems have been noticed.

CFA-COT

Provider of IT services to state employees. An office of the Cabinet for Finance and Administration

They provide services to state employees. My thought is that they have an obligation to verify proper billing of printer services from a financial point of view, as they work under CFA. There is a gray area as this group has not been specifically assigned responsibility to insure proper billing. Management does not see this as a specific obligation and does not delve into this question.

CHFS-OIT

Provider of IT services to state employees. An office of the Cabinet for Health and Family Services

They provide services to state employees. My thought is that they have an obligation to insure proper billing and delivery of printer services to CHFS employees from a financial and an operational point of view, as they work for CHFS. There is a gray area as this group has not been specifically assigned responsibility to insure proper billing. Management does not see this as a specific obligation and does not delve into this question.

 


Worksheet Three

(Matching)

Evaluating the Internal Environment

Management Systems

Open Vs Closed Systems

Changing current printer maintenance practices are very difficult. Numerous change initiatives used in the corporate environment have been suggested that could improve operations. Change, even when it would improve the organization, must conform to regimented procedures in many organizations. However, change is often viewed from how it affects a departmental, rather than the benefits that could be derived from said change.

Examples of change initiatives that have been implemented in corporate organizations have been difficult to discuss in this CHFS-OIT. Examples of these change initiatives include specifications on how to track printer maintenance calls, how to handle Microsoft Outlook Personal Folders, changing target locations for the “My Documents” folder on the Microsoft XP desktop, and statewide education for employees that covers basic tasks, such as logon procedures. A discussion of change initiatives are difficult to discuss because of the cultural structure of government organization known as CHFS-OIT.

OPEN SYSTEM (1 = VERY OPEN)          CLOSED SYSTEM (10 = VERY CLOSED)

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Mechanistic Vs Organic

Government organizations expect employees to follow regimented procedures. Although employees can take steps to work around faulty procedures, changing the procedures can be difficult. Only certain managerial level people in the hierarchical structure can cause procedures to be changed, and it is often very difficult to get them to act. For example, if a new employee must fill out a form in order to receive a computer account and the process or the form is flawed, getting the problem corrected can be difficult. Many workers may know ways to get around the problem. It is easier to take steps that bypass a faulty form than to contact someone and convince them to change the form.

MECHANISTIC                                                                                            ORGANIC

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Assumptions about Human Nature

Government workers are treated very well in many respects. There are flexible schedules, generous benefits, and a reasonable workload. Quality of service is not as important as quantity of service, to a certain extent. Part of the reason for this is a result of pay structures, while part is a result of indoctrination into government workplace culture. As a government employee, you are expected to follow procedures. There is little concern for whether there is a better way to do things and the likelihood of meaningful change can be discouraging. Employees are quickly indoctrinated into organizational culture of government employees. Although some employees resist, most either accept the organizational culture or find employment elsewhere. Effecting change in government workers’ behavior may also be difficult. It is often easier to offer employees promotions that will put them in a different department, rather than to try to change the employee’s behavior. Policy and politics dictate what will happen in the workplace. Change initiatives typically must come from the top in order to gain acceptance, rather from the workforce. Administrative procedures must be followed, regardless of whether they work. Change, if not frowned upon, is very difficult to enact in any significant way. Even those that desire change are often reluctant to take steps necessary to truly correct the problems. In order to create meaningful change, you must have direct responsibility, rather than a desire to make improvements.

My change initiative is not likely to go anywhere unless I can convince my supervisor into accepting the change on a basis of ethics. It is unethical to allow IBM to charge multiple times for the same printer issue that was not corrected on previous calls. I am told that we are not sure that IBM is charging twice, although it is probable that they are doing so. If I insist that this is a question of ethics I can persuade my supervisor too pursue the issues, although it could create much difficulty in the future, including reduced possibility for promotion.

No one in CHFS-OIT has responsibility for writing the contract for printer maintenance, or of awarding this contract to IBM. Rather than anyone in the CHFS-OIT organization trying to address an issue that they have no direct responsibility for, managerial personnel often choose to address the problem in an inconsequential way. They will not take risks involved with implementing change initiatives if this could jeopardize their careers.


Worksheet Four

(Matching)

Evaluating the Internal Environment

Organizational Model

Bureaucratic:

CHFS-OIT is a bureaucratic state agency. There is a strict chain-of-command that is seldom violated. Those in higher level positions will seldom seek input from those who are not close to them in the hierarchy of authority. Employees tend to have a fixed position in the Cabinet, with tasks and functions strictly divided.

 

Bureaucratic                                                                                                            Traditional

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Quality

Quality is not as important as resolving the issue at hand as quickly as possible and in a way that conforms to policies. There is less interest in improved ways of delivering services, or in insuring that the services are delivered on a continuing basis than in eliminating the problem at hand and conforming to policy. The printer maintenance contract is one of several issues that have been brought forth. No one wants to put the efforts out to determine if IBM is violating this contract because it is not their responsibility. If they follow current procedures, another call will be issued and no one checks to see if IBM bills the state for an additional call. No one wants to take the risks involved to insure that the state is not being over-billed.

Quality (1=low    10=high)

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Individual responsibility (1=low    10=high)

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Team effort/rewards (1=low    10=high)

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Efficiency (1=low    10=high)

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Individual freedom (1=low    10=high)

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Additional Response

The likelihood that CHFS-OIT will take the steps necessary to make changes that will be effective in the long run is very small. Changes need to be instigated by the top administrative positions in CHFS-OIT and above in order to assure best chances of success. Changes suggested by employees from the bottom up do not seem to work in organizations with this type of cultural background. There are many caring people in state employment who have become indoctrinated into the culture of a government organization. If they have worked as a state employee for a long time, they know what must be done to survive and advance. The cliché “You can’t fight city hall” is a belief system for many government employees. There are some state workers who would definitely go through “culture shock” if they accepted a job in the corporate world. In the final analysis, change is next to impossible. Most people who have worked for a state agency realize that change is difficult in all but a few isolated state agencies.


Worksheet Five

(Matching)

Evaluating the Internal Environment

Organizational Mission 

1.        What function does the organization perform?

CHFS_OIT provides computer services to 35,000 CHFS employees

2.        For whom does the organization perform this function?

CHFS-OIT provides these services for the Cabinet for Health and Family Services (CHFS) who, in turn, provides services for the citizens of Kentucky. CHFS is one of twelve sub-branches of the executive branch of state government.

3.        How does the Organization fulfill this function?

CHFS-OIT fulfills this function by insuring that computer equipment used by 35,000 employees is in proper operating condition. These employees provide services to all Kentucky citizens.

4.        Why does the organization “really” exist?

CHFS-OIT exists to satisfy the Information Technology requirements necessary to allow CHFS employees provide health and family services to Kentucky citizens.

5.        What is the Organization's “REAL” business?

The real business of the organization is to see that CHFS employees receive services in accordance with bureaucratic demands of various organizations. This means that computers, servers, printers, and other equipment must be maintained and in operational order.


Worksheet Six

(Matching)

Internal Performance Audit: SWOT Analysis

Strengths

  • Potential Contract Size – The potential income for the printer maintenance contract would at least $500,000, based on current contracts
  • Government Agency – Bidders would have no fear of Accounts Receivable from the state government. Adequate financial reserves
  • Lexmark Printers – Virtually all printers under contract are from the same manufacturer. Bidders mainly deal with supplier of parts for one manufacturer
  • No competitive pressures
  • Large amount of resources
  • Position of relative power
  • Ongoing relationship with many service organizations – lucrative contracts
  • Organization exists for the benefit of Kentucky citizens. Taxpayer dollars and concern

Weaknesses

  • Bureaucratic
  • Inefficient
  • Closed system
  • Mechanistic
  • Little individual freedom and responsibility – lack of autonomy
  • Poor implementation track record in insuring terms of maintenance contracts are followed
  • Lack of managerial depth and competence
  • People in power positions having authority will be opposed to change of vendors (risky – If IBM fails in satisfying the terms of the contract, there would not be the fallout that would exist if my 1990s ANCOR Technical Services signed the contract and failed)
  • Missing some key skills or competencies
  • Plagued with internal operating problems
  • Behind on experience curve in insuring the terms of the contract are followed.

Opportunities

  • Improve the verbiage of the contract
  • Potential to save money
  • Improve printer availability by contract with provider who will provide better service
  • Control costs by insuring the terms of contract are fulfilled.
  • Size of contract insures multiple bidders
  • Winner of contract unaffected by a recession. Printer maintenance continues
  • Complacency on the part of IBM service in abiding by the terms of the contract – improvement is easy to make.

Threats

  • Only a certain number of vendors capable of providing service throughout the state: There is a risk of signing a contract with a small vendor who can’t deliver on the terms of the contract in all localities. Perhaps the vendor will not stock, or can not obtain, adequate supplies of parts.
  • Political bureaucracy – The internal and external parties that negotiated old contract may be opposed. They may have too much power to overcome the obstacles.
  • Change of vendors: Change of vendors will require some internal adjustments to procedures for OIT.
  • Vendors must be willing to deal with a government bureaucracy
  • Potential vendors for this large contract have existing customers they must also service.

  • References

Center for Digital Government. (2005). Digital State Survey. Retrieved on March 4,

2006, from http://www.centerdigitalgov.com/center/04sustained.php

Government Performance Project. (2005). State Report Cards: Kentucky State

Government Performance 2005. Retrieved on March 4, 2005, from http://

results.gpponline.org/StateOverview.aspx?id=109

 

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