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SoftwareService Business Strategy & Balanced Scorecard

Introduction

The name of the company in question is – SoftwareService, which was modified for privacy reasons. It is a software development business that began as a partnership between two graduates and has grown to be a global business with over 6,000 employees working in the United States and Europe. In recent years, SoftwareService began to expand and introduce new services for its clients, including Big Data analysis, Internet of Things (IoT), DevOps, e-commerce development and support, cloud computing, design services and security. The introduction of these services was a lengthy and resource-intensive process, and now the company faces another challenge – the increasing competition from outsourcing companies that offer similar products for lower prices and a need to address the changing nature of the workplace in the face of COVID-19.

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Organization change is an issue that has two distinct features – it disrupts the processes and established practices, but also it is inevitable if an organization wants to keep up with its competition. For businesses working in the information technology (IT) field, such changes are especially significant because innovation in IT is much faster when compared to brick-and-mortar businesses that have more time to adapt to changes before their competitiveness suffers from a lack of innovation.

This company has been operating for 20 years and has extensive experience in the field, which is a definite competitive advantage. However, to continue providing the customers with high-quality service, it is necessary to improve some internal processes and address emerging issues with the nature of work and the workforce. According to the “Global Software Engineering Market” report, the software engineering industry is expected to grow by 11.7% over the period from 2016 until 2022 (Market Research Future, 2019). The critical aspect of growth is an increased demand for automation software used by manufacturers to enhance their internal processes, such as Computer-Aided Manufacturing and Computer-Aided Design.

Despite the increased demand for services, the main issue of the IT companies globally and SoftwareService, in particular, is a lack of a skilled and qualified workforce. SoftwareService has experienced this shortage mainly in the field of cybersecurity, which is a narrow niche that requires advanced knowledge of IT. One way of addressing this is designing a remote workplace system that will allow SoftwareService to choose candidates from the global pool, rather than local or a need to invest in relocation, which is the objective of this report. This report will outline the change initiative, which is an innovative approach to managing the workforce and organising the workflow of the people, allowing individuals to work from home and creating appropriate technological infrastructure for this initiative.

Change Initiative – Key Changes

As a result of this change initiative, SoftwareService should be able to offer remote work to at least 50% of its employees and increase the number of new positions for remote work by 5% each year. Companies “face a persistent challenge in recruiting skilled cybersecurity professionals capable of protecting their systems against the threat of malicious actors” (Crumpel and Lewis, 2019, p. 5). For example, in the United States, there are approximately 1,000 IT security professionals with the demand estimated at 10,000 to 30,000. Considering the increasing use of IT and subsequent growth of security attacks, SoftwareService should implement a change that will help it recruit these specialists effectively.

Change Models

Kotler’s research suggests that most organisations do not apply a comprehensive approach to managing change, which leads to failure in most cases (Stouten, Rousseau and De Cremer, 2018). In other words, while most businesses, including SoftwareService, recognise the need for change and improvement, they often create strategies are that not linked with the company itself – its vision and values. Consistently with Kotler’s findings, Lewin’s model highlights the critical stages of the change since any disruption of the usual process will cause protests and pushback from the employees who do not want to face uncertainty and may not understand the necessity for change.

In the first stages, the remote workplace will be tested by a small team of SoftwareServices’ existing cybersecurity specialists. Currently, the company employs 94 of them in different offices across the world. This will help test whether the software was chosen for this change is appropriate, the meetings and planning processes are not hindered and that employees can work effectively from their homes. Next, the initiative will be applied for hiring new cybersecurity specialists – they will begin their work in SoftawereService as remote employees. Later on, the company will be able to extend the program to other positions.

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Using Lewin’s model of change, one can assume that when initially introduced – the program will not be perceived as beneficial because the employees may see it as additional work. Other issues may include their lack of knowledge in terms of how to organise their work, lack of space appropriate for working, not having the equipment, problems associated with having meetings and communication with other team members.

Unfreeze

While the management may understand the urgency for a change, it is essential to make certain that the employees are aware of the critical objectives for the initiative. According to Lewin’s model, the first step of the change process, or the “unfreeze” step, requires one to understand why a particular change must take place (Cameron and Green, 2020). Above, some of the ley objections to the proposed transition towards a digital workplace are outlined and the answer to the question “why?” will address these concerns. At this stage, it is essential to explain that the company is missing out on an opportunity to offer its clients an essential service – cybersecurity protection because it does not have enough resources.

The existing way of doing things at SoftwareService cannot address the concern. Firstly, the company fails to deliver the services that its clients need, leading them to choose competitors instead, which can result in a full transition from SoftwareService to a different organisation. The statistics gathered for IBM show that 13% of all IT job postings in 2019 were advertising a position of cybersecurity professionals, and the overall increase in demand increased by 94% since 2013 (Leaser, 2019). Partially, this shortage is connected to a lack of university-based programs that specifically target cybersecurity, although Leaser reports a 33% increase in the number of these programs. Nithithanatchinnapat and Joshi (2019) argue that this problem is industry-wise and can be addressed adequately only with appropriate governmental policies. However, it is evident that the company cannot wait until the governments in the countries where it operates develop strategies that will encourage people to learn IT.

A remote workplace helps overcome the physical barriers and distances that otherwise cannot be addressed and allows employees to choose an environment that will be comfortable for them. Lee (2018, p. 4) states that in the last ten years the number of people employed remotely has increased by 80% and the main benefits for organisations are a “major decrease in overhead costs, and drastically increase organisational leaders’ hiring options.” Therefore, this new strategy will be beneficial for the employees and management of SoftwareService.

Finally, the outbreak of COVID-19 has shown that similar threats in the future can result in severe damage to business operations if a transparent system of remote work is not in place. Due to this, SoftwareService had to transfer some of its employees to remote work, following the governmental regulations in countries where it operates, and most offices were closed. The interview with one of the executives of SoftwareService presented in the Appendix proves that the management has been concerned with the lack of readiness to address the remote work trends and the issues of workforce management in general. This is consistent with the findings of researchers regarding the shortage of It professionals and increasing demand for services. Moreover, the manager revealed that SoftwareService had to deny cybersecurity services provision for several of its clients already, because of this shortage, and the manager fears the adverse impacts that this will have on the company’s reputation and relationship with customers. Therefore, this change initiative is recognised as a necessity by the upper management, which will help implement it more easily. Additional Stakeholder Analysis that will help engage the employees will be presented in section 4 of this report.

Change

Once SoftwareService begins testing the new remote workspace, and it will be important to cooperate closely with the employees since they will face a lot of uncertainty. The Change Curve describes the transition process from facing difficulty to acknowledging the change and participating in it and enabling the implementation of innovation, in this case – remote workplace strategy (Cameron and Green, 2020). At this stage, one should work with the perception of individuals to explain how the change will benefit them.

Here, an obvious factor is a possibility of implementing a remote workplace model for all employees, which will have a variety of personal benefits – the ability to have better control over one’s tasks, no commuting, spending more time with family for a better work-life balance. Some research into the benefits of the work-from-home experience can help explain this better. For example, Lee (2018, p. 4) suggests that if the employees feel the connection to the organisation’s vision and mission, they “experience strengthened and sustained levels of workplace engagement.” Another evident benefit is the ability to satisfy the requests of clients since resource allocation in project management will rely on the availability of the company’s specialists globally, and not in a specific office. This information, as well as the vision for change, the objectives, and key features of the remote workplace, must be communicated to the personnel.

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Refreeze

At this stage, the remote work system will be tested in one of the SoftwareService’s offices, and both the team and management will be asked to submit their feedback and questions to improve the workflow. Here, the Plan-Do-Study-Act (PDSA) model will help implement small changes along the way, which will support the long term sustainability of this remote workplace initiative. According to PDSA, the leader of this initiative for the remote workplace will develop an implementation plan, test it, assess feedback and results, make changes if necessary to continue with the further implementation. Once a remote workplace option is available in all of SoftwareService’s offices, each team will be assigned with a remote work manager, responsible for communication with employees and resolution of problems.

Vision for Change

Currently, SoftwareServices’ vision is to create software products that will help customers improve their processes and provide support to companies by assisting them to implement and use digital systems. One of the values that SoftwareService declares is to “deliver innovation,” which reflects a significant value – the ability to deliver the best-suiting and innovational software solution to its partners. Moreover, the company recognises its responsibility before its customers, employees and society in general, which is why it already introduced one change initiative that can help address the shortage of resources problem – a Unversity, where the associates teach future IT professionals the practical aspects of their profession, and 70% of individuals undergoing this training are hired by SoftwareService. This suggests that the management of the company values innovation and welcomes changes that can improve the processes. To link the proposed amendment to the values of this business is that SoftServe will implement an innovational approach to managing its workflow – remote work and will be able to deliver its services to a more significant number of clients. The company’s vision is to become a software provider that can address all of the needs of SoftwareService’s partners, which means that cybersecurity and the ability to create appropriate infrastructure for this service is one of the essential goals for the following years.

These goals align with SoftwareService’s corporate goals of increasing the market presence and developing a cohesive set of software and support services that will satisfy the needs of its customers to make sure that SoftwareService, a major software vendor for its partners. This requires addressing the problem with the scarce human resource by creating a better system of hiring candidates and managing their work on different projects, which can be achieved with remote work. The vision for this change is to “design a digital workspace that will allow SoftwareService’s employees to work on global projects in comfortable environments.”

Objectives

To facilitate the change process, the following steps must be followed – developing vision, mission, and SoftwareService’s values that will align with the initiative and will reflect the overall image of this business,s which was discussed in the previous paragraph. In the case of SoftwareService, the vision is to create a productive workplace for SoftwareService’s employees. The mission is to become an employer of choice for highly skilled IT professionals.

The next step is to set objectives that will help measure the success of the digital workplace initiative. The first one is to assess the resources necessary to facilitate such work, have a list of software, hardware requirements, protocols for remote work, and ways of using Agile methodology within the remote setting. Next, the strategy will be tested with a small team that work’s in SoftwareService’s London office. The cybersecurity team will use the tools and guides prepared by the management and to assess the success of the project evaluation metrics and a survey of the team members will be used. If necessary, changes to the process will be implemented based on the team’s feedback, and the remote work strategy will be applied to all cybersecurity specialists, which will allow them to engage in working on projects globally. At the final stage, it is expected that SoftwareService will allow 50% of its workforce to work remotely. The Balanced Scorecard presented below, as Table 1 illustrates some of the goals that will be achieved with this strategy in the next year.

Financial Objectives Strategic Objectives
Decrease the spending connected to the relocation of employees by 10% Increase employee retention and diversity of resources by engaging employees from different parts of the world.
Decrease spendings on employee recruiting for cybersecurity teams by 30% Win 30% of the cybersecurity market share in the United Kingdom
Increase revenue from cybersecurity projects by 25% Develop a full-package cybersecurity service for SoftwareServices clients that will be supported by remote teams

Table 1. Balanced Scorecard for SoftwareService (created by the author).

Barriers

Understanding the barriers and facilitators of change can be essential for implementing a remote workplace. The gap between the future and the present is mainly connected to the lack of experience, software and hardware that will allow the employees to quickly transfer to remote work. In the future, each professional hired by SoftwareService will have to have a personal computer with characteristics appropriate for the type of work and access to high-speed internet to facilitate all the meetings and other organisational activities. Here, the main issue is the lack of expertise on how to manage the work of remote teams for project managers, although some scholars have investigated the problem of adapting Agile to the specifics of such work. The agile system can be adapted to the details of remote work, according to Heilmann et al. (2020) and Sharp et al. (2019, p. 2) state that “the remote working arrangements work well and experience and literature show that remote working is compatible with agile software development, but there are also challenges concerned with making remote workers’ participation effective.” Therefore, some resistance may be connected to not having an understanding of how to work with remote teams, which can be addressed with additional training.

This initiative is a Type III change, which means that the management of SoftwareService is imposing the new methods of work, precisely the remote work strategy on its employees. Notably, from the employees’ perspective, this is Type I change, where the management is changing their typical day to day work and in this case. The crucial aspect is to communicate the objectives of the remote work and the fact that personnel’s feedback is the critical factor that will be used to evaluate the outcomes and design this change in general. Additionally, the transformation towards remote work can be seen as a developmental change, since SoftwareService wants to improve the current state and performance. The type of change and its perception can help understand the main issue with this innovation – the employees will not see the transition towards remote work in the same way that it is perceived by the management. However, through communication and the use of Lewin’s model, it is possible to address this problem.

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Key Stakeholders

Stakeholder analysis allows identifying and grouping people with different levels of involvement that will be affected by the remote work project. Firstly, with this initiative, the primary stakeholder group is the employees because the change will have a direct impact on their work – they will no longer work in the office, have face to face meetings, and other things associated with such work. Moreover, they will have to adjust their lifestyle to fit the new schedule and work type, meaning that in general, this change will have an impact on them. This group has low power and high interest in this project and to ensure their commitment, and the leadership must demonstrate authentic and transformational leadership qualities.

The behaviour of leadership during an organisational change is one of the crucial determinants of the initiative’s success. Transformational leaders can be in charge of changes that are strategical but may overlook some essential elements of work, causing troubles and inconveniences to the main stakeholder groups, which is why the management should consider the principles of authentic leadership. Authentic leadership implies a focus on the ethical values that a leader showcases while managing a change (Sendjaya et al., 2016; Lyubovnikova et al., 2017). Moreover, Bakari (2016) argues that in combination with Lewin’s three-step model, these leaders can create a feeling of urgency and facilitate a successful change.

The next group is the clients of SoftService, mainly businesses that use its cybersecurity services. Naturally, with this disruption, communication with clients and the way the service is delivered will change. They have “low power and low interest” in this project and thus should be informed of the new initiative, but there is no need to communicate the change to them regularly (Crumpel and Lewis, 2019, p. 290). Stakeholders with high power low interest may be employees of the departments that will not be affected by remote work initiatives, and it is essential to have some form of communication with them as well, such as a letter from the CEO. Finally, the upper management of SoftwareService is a group of stakeholders as well because these changes will impact the way the business operates, and they have high power and high interest in this project.

Improving stakeholder buy-in is essential for any initiative and can result either in failure or success, depending on their level of engagement. Working with people depends on the use of the tools and framework, and the characteristics and skills of the manager, since “the use of the artful “soft” skills of general management can be the determining factor in managing employee’s perception of the changes (Aziz, 2014, p. 1). With this initiative, it is essential to have the buy-in of the employees, because the change is initiated to improve their work, and their feedback and participation can help in the process.

Along the process of initiating and implementing a project, the following problems can arise -“unrealistic assumptions, flawed or skewed estimates, unidentified risks, hidden issues, unannounced or poorly managed dependencies, significant variances from baselines,” (Aziz, 2014, p. 1). The best way to ensure buy-in is to make predictions and assumptions based on the previous performance and history of the organization, which will enable the accuracy and trustworthiness of the plan. In the case of SoftwareService, the need to switch towards remote work is a good example of further developing this type of approach to work, and despite some flaws and difficulties, most of the teams were able to successfully continue their work on the existing projects. Based on this experience, the fundamental issues are:

  • A need to provide equipment for home-based use (laptops or PCs)
  • Unstable work of software (used for videoconferences)
  • No guidelines that would help managers establish the workflow and processes

If the change management plan includes these issues and elaborates on how to address them, for example, partner with a reliable videoconference calls vendor and work on implementing a single system for the company – the employee buy-in will be higher when compared to implementing a change without addressing the problems that the organization already faced. Moreover, a crucial factor in this initiative is to communicate with the employees and assess their feedback about remote work through surveys or interviews. By doing this, the CEO, as a leader of the initiative, will be able to increase engagement.

Building commitment and engagement relies on the leadership approach taken by the initiator of the change and on the amount of freedom and ability to participate in a project provided to the employees. Engagement, in general, can mean one’s willingness to contribute to the success of the business and enthusiasm concerning different changes and tasks (Developing and sustaining employee engagement, no date). This is a complex factor that should be addressed on an organisation’s level – create an environment where employees feel the enthusiasm to participate in new activities, and arguably, SoftwareService has a culture suitable for fostering engagement.

With this project, in particular, leadership can work towards increasing engagement for this initiative. One necessary factor is the employee’s perception of their leader and his or her ability to make an impact and create a better workplace (Developing and sustaining employee engagement, no date). This aspect can be addressed through communication, via email, to explain the purpose of the change, and additional events, such as a video conference where any employees interested in finding out how remote work will affect them, their salary, benefits, or workload can ask these questions directly and the CEO will reply. Additionally, such communication can help emphasize that SoftwareService values its employees and invests in ensuring that their work is more comfortable and efficient, which should also help increase engagement.

Conclusion

Through this initiative, SoftwareService will achieve an improvement in competitiveness, market share and profitability. Competitiveness will be enhanced by focusing on the developing field – cybersecurity, where the demand is much higher than the supply. With this, SoftwareServiceoffer a service that is in high demand, attracting new customers and forming new partnerships with the existing ones. Market share improvements are also connected to the ability to address the primary constraint of the business – lack of qualified human resources. Finally, profitability will be improved as a result of these changes, market share increases and the acquisition of new clients. Lewin’s change model and its three stages were used to explain the key steps and actions of the management that will help facilitate effective implementation of the remote workplace since the initiative may be faced with resistance of the employees. At each of the three stages, communication channels and means of delivering information and assessing feedback from the employees are established.

SoftwareService’s vision is to develop and deliver services that will help the businesses partners improve their operations. The mission is to become a software vendor that can offer all the necessities, including cybersecurity protection, which is becoming increasingly popular. The corporate values target an increase of SoftwareService’s market presence and reduction of costs without losing the quality of services. Hence, this initiative will help address all of these elements because the vision for change is to “design a digital workspace that will allow SoftwareService’s employees to work on global projects in comfortable environments.”

Reference List

Aziz, E. E. (2014) How to secure 360 stakeholder buy-in and sustain it? Web.

Bakari, H. et al. (2017). ‘How does authentic leadership influence planned organizational change? The role of employees’ perceptions: integration of theory of planned behavior and Lewin’s Three Step model’, Journal of Change Management, 17(2), pp. 155-187

Cameron, E. and Green, M. (2020). Making sense of change management: a complete guide to the models tools and techniques of organizational change. 5th edn. London: Kogan.

Crumpel, W. and Lewis, J. A. (2019). The cybersecurity workforce gap. Web.

Developing and sustaining employee engagement (no date). Web.

Heilmann, P., Forsten-Astikainen, R. and Kultalahti, S. (2020). ‘Agile HRM practices of SMEs’, Journal of Small Business Management. Web.

Leaser, D. (2019). The demand for cybersecurity professionals is outstripping the supply of skilled workers. Web.

Lee, A. (2018). An exploratory case study of how remote employees experience workplace engagement. Web.

Lyubovnikova, J. et al., (2017). ‘How authentic leadership influences team performance: the mediating role of team reflexivity’, Journal of Business Ethics, 141, pp. 59–70. Web.

Market Research Future. (2019). Software engineering market research report – global forecast to 2022. Web.

Nithithanatchinnapat, B. and Joshi, K. (2019). ‘A global view of what fixes information technology skills shortage: Panel data analyses of countries’ human and technology resources’, Journal of Global Business Insights, 4(1), pp. 59-77.

Sendjaya, S., et al. (2016) ‘Are authentic leaders always moral? The role of Machiavellianism in the relationship between authentic leadership and morality’, Journal of Business Ethics, 133, pp. 125–139.

Sharp, H. et al. (2019). Remote working in an Agile team. Web.

Stouten, J. Rousseau, D. M. and De Cremer, D. (2018). ‘Successful organizational change: integrating the management practice and scholarly literatures,’ Academy of Management Annals, 12, pp. 752–788.

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