Organizations must continually change and evolve to succeed. Changes often fail because the focus is put on the technical aspects of the change while people are put aside. How to ensure that each individual embraces and adopts the change?
In this blog post, we will share a few insights into this matter inspired by Prosci methodology.
Source: Prosci Best Practices in Change Management - 2018 Edition
There is a strong correlation between the success of the project and meeting its objectives and effective change management. The data points from Prosci Best Practices in Change Management represent the percentage of participants who met or exceeded objectives in each of the change management effectiveness categories. Of the participants that had excellent change management programs in place, 93% met or exceeded objectives. In other words, the chances of meeting or exceeding the project’s objectives are 6 times higher if there is excellent change management effectiveness.
Based on Prosci’s findings, many organizations are still reluctant to fully invest in change management until believing that there are real benefits outweighing the costs. This is where cost/benefits analysis comes in place.
Costs of change management can be divided into primary and secondary costs, each being represented in the table below:
In addition to significantly increasing the probability of meeting the project’s objectives, there are 4 other main benefits of change management:
1. Three people-side ROI factors: Prosci's ROI of change management model focuses on three people-side factors, which are speed of adoption, ultimate utilization and proficiency. These three factors are unique to your change but universal in terms of impacting project ROI.
2. Cost avoidance: You might have other kinds of costs if the change is poorly managed and this includes:
3. Projects Risk mitigation - tf your organization already conducts risk assessments on projects, applying a structured approach to change management is the right risk-mitigation technique.
4. Benefits realization insurance - the context for showing the value of change management is tied to the overall value of the project.
For each project objective, ask yourself:
Is meeting this objective dependent on people doing their jobs differently?
If yes, What percentage of these benefits result from people doing their jobs differently?
So is allocating a budget for change management and adoption a must?
Allocating a budget for change management and adoption is essential. Each change has its own amount of dependency on adoption and usage depending on many factors, such as:
· Number of impacted employees (few vs. many)
· Number of aspects of work impacted (few vs. many)
· Number of locations ( single vs. many)
· Type of departure from the current state (small vs. large)
· Type of change (Incremental vs. disruptive)
· Kind of change ( familiar vs. something different)
Curious about how you can implement efficient change management and adoption strategy? Get in touch via firstname.lastname@example.org. Want to see more? Watch our webinar recording at: https://www.youtube.com/watch?v=kRxxHVWjtKs
The Correlation between Change Management and Project Success
Cost-Benefit Analysis of Change Management:
Three Factors of Change which Define or Constrain Project ROI