- 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.

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

6. Snapshot of participants - ANZ
6

7. Every business is in the
change business
7

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.

12. 12

13. “So, does anyone else feel that their needs aren’t being met?”

14. Changing the conversation
14
From what we do to what we deliver

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

16. Change Management increases
success rates by a factor of 6
Change Management increases the
probability of success
• "Of the 165 research
participants who reported
having excellent change
management effectiveness,
96% met or exceeded
project objectives"
• "Participants with the highest
level of change management
effectiveness were 6X more
likely to meet or exceed
project objectives"
16
16%
46%
77%
96%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Poor
(n=244)
Fair
(n=653)
Good
(n=834)
Excellent
(n=165)
P
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Overall effectiveness of change management program
* Data from 2007, 2009, 2011 and 2013
Copyright © 2014 Prosci. Best Practices in Change Management – 2014 Edition.
Correlation of change management effectiveness
to meeting project objectives
2014 Best Practices in Change Management Report.
822 participants in 63 countries. Prosci copyright 2013.
16

17. 17
Change Management drives staying on budget
48%
63%
71%
81%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Poor
(n=258)
Fair
(n=737)
Good
(n=1001)
Excellent
(n=180)
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r
b
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d
g
e
t
Overall effectiveness of change management program
* Data from 2007, 2009, 2011 and 2013
Copyright © 2014 Prosci. Best Practices in Change Management – 2014 Edition.
Correlation of change management effectiveness to staying on budget
Percentage
of
respondents
that
met
or
exceeded
project
objectives

18. Change Management drives staying on
schedule
18
16%
32%
54%
72%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Poor
(n=293)
Fair
(n=793)
Good
(n=1032)
Excellent
(n=181)
P
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s
p
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t
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w
e
r
e
o
n
o
r
a
h
e
a
d
o
f
s
c
h
e
d
u
l
e
Overall effectiveness of change management program
* Data from 2007, 2009, 2011 and 2013
Copyright © 2014 Prosci. Best Practices in Change Management – 2014 Edition.
Correlation of change management effectiveness
to staying on schedule
Percentage
of
respondents
that
met
or
exceeded
project
objectives

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

20. Organisations change for a reason
Performance
Performance
>
© Prosci Inc. All rights reserved www.change-management.com
Current
state
Transition
state
Future
state

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

24. Making the connection
24
Future

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

27. 27

28. “People dependence” of project benefit varies
28

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

30. Most projects have a large dependence
on adoption and usage
30

31. Take a deeper dive
Organisational benefits % dependent on
adoption
and usage
1.
2.
3.
31

32. Not all employees are critical to
achieving benefits
32

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

35. More info
Being Human
www.beinghuman.com.au
Prosci
www.change-management.com
www.prosci.com
Change Management Institute
www.change-management-
institute.com
Association of Change
Management Professionals
www.acmp.info/