- The document discusses the return on investment (ROI) of change management and how it increases project success rates. It presents research finding that organizations with excellent change management capabilities see project success rates up to 6 times higher than those with poor change management.
- Change management is shown to positively correlate with projects staying on budget and on schedule. The more effective the change management, the more likely projects are to meet objectives and realize intended benefits.
- For projects to achieve their intended benefits, the solutions must not only be designed and delivered, but also embraced and adopted by employees. The degree individual employees adopt changes impacts how much of the projected benefits are ultimately realized.
The Return on Investment of Change Management, PMI National Conference, June 3 2015
1. The ROI of Change
Management
Presented by
Catherine Smithson
PMI Australia Conference
May 2015
2. Introducing Being Human
• Founded in 1994
• Our mission: develop
change-capable
people and
organisations so they
achieve the benefits of
change.
• Exclusive Prosci
Primary Affiliate
Australia and New
Zealand.
2
3. Prosci by the numbers
• 1994 – Founded in Loveland
(Denver) Colorado, USA
• 8 global Benchmarking
Reports
• 16 years of longitudinal
research
• 3,400+ research participants
• 63 countries
• 70% Fortune 500 companies
• 25,000+ Certified practitioners
worldwide
• 3,000+ Certified practitioners
Australia/New Zealand
3
4. Topics
• Why care about the ROI of
Change Management?
• The three ages of Change
Management
• Connecting Change
Management to benefits
and outcomes
• Q&A
Getting back to Normal…
it’s a town in Illinois USA.
5. Prosci 2014 Best Practices in Change
Management Benchmarking Report
• 822 participants
• 63 countries
• Top 3 roles:
• Change Management team
leader
• External consultant
• Project team leader
• 244 pages
• 38 new topics
The largest body of Change Management knowledge in the world.
5
2% 2% 3%
5%
14%
15%
25%
34%
Middle East
Latin America
Asia and Pacific
Islands
Africa
Europe
Canada
Australia and New
Zealand
United States
8. Yet success rates of change are low
IBM Making Change Work Report While the Work Keeps Changing Report
August 2014
1,400 organisations globally, over 20 industries,
9. And many organisations lack
change capabilities
9
IBM Making Change Work Report While the Work Keeps Changing Report
August 2014
1,400 organisations globally, over 20 industries,
10. Most organisations invest 5% or less of total
budget in Change Management
10
IBM Making Change Work Report While the Work Keeps Changing Report
August 2014
1,400 organisations globally, over 20 industries,
11. Major gap between Change Management at
project and enterprise levels
11
of organisations apply a
Change Management
methodology
of organisations applying
Change Management
methodology to all
projects
2014 Best Practices in Change Management Report.
822 participants in 63 countries. Prosci copyright 2013.
15. PMI Research shows the connection
• “Organisations reporting
higher-than-average
success rates for projects
also report higher-than-
average adoption of
organizational Change
Management practices.”
Pulse of the Profession Report
2012
19. What’s the connection between Change Management
and project results and outcomes?
Do all projects need Change Management to succeed?
How do we quantify the Change Management
investment required in a project?
How can we target Change Management investment on a
project so it delivers the best return?
19
21. Expected Results and Outcomes
Results and Outcomes
Benefit Realisation
Value Creation
Return on Investment (ROI)
Delivering on the project
promise
21
Future
22. Individuals make their own transitions:
Adoption and usage
The individual is the unit of change
23. Results and outcomes depend on employee
adoption and usage
Solution must be:
• Designed
• Developed
• Delivered
and
• Embraced
• Adopted
• Used
23
Future
Effectiveness = Quality x Acceptance
General Electric
25. “Soft side” drives success on
“hard side”
• How much value does a
new process deliver if no
one follows it?
• How much value does a
new technology or system
deliver if no one uses it?
• How much benefit is
realised if the people drift
back to the “old ways”? With a very large,
negative ROI
29. Activity: What is the “people dependence” of
your project benefits?
• Select a current or
completed change
• Estimate the % of
benefits that are
dependent on “people
change” i.e. adoption
and usage.
29
33. Unified value proposition
Solution is designed,
developed and delivered
effectively
(Technical side)
Solution is embraced, adopted
and utilised effectively
(People side)
+
Complementary disciplines with a common objective
Project management
Change management
Current Transition Future
Current Transition Future
34. The last word
“All truth passes through
three stages. First, it
is ridiculed. Second, it
is violently opposed.
Third, it is accepted
as being self-evident.”
Arthur Schopenhauer
1788-1860