Summary - Section 4 - Rates of return on Investment (ROI)
In the project's ROI is not what you expect, look for gaps between expected and actual values of speed of adoption, ultimate utilisation and proficiency. The specific type of change being implemented defines the speed of adoption, ultimate utilisation and proficiency.
i. Poor change management results in slower speed of adoption, lower ultimate utilization and low proficiency which reduces the ROI. Effectively handling the human side of change can increase adoption, better overall participation, improved benefits, less resistance, reduced turnover of valued staff, etc. All these will improve the ROI.
ii. Tabulated summary of the benefits
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Benefits |
Details |
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People-side |
"...Change occurs at the individual level. The value that a project delivers to the organisation is ultimately tied to how quickly we can get individuals to make the changes required (speed of adoption), how many of them do their work the new way (ultimate utilisation) and how effective each of them is when they have adopted the change (proficiency) |
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Cost avoidance (real and tangible costs). |
We incur significant and quantifiable costs when changes are fully managed, at both the project and the organisational levels. In addition to the extra costs of fixing the people-side issues that creep in if we ignore the change management upfront, the organisation also fails to derive the value it needed from the project in the first place. Change management is an effective cost avoidance technique we can apply to all our projects. |
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Risk Mitigation |
Ignoring the people side of change results in numerous risks to the project and to the organisation. We leave ourselves exposed to these people risks if we do not use a structured approach for managing the people side of change. When applied effectively, change management can help to mitigate or eliminate many of the numerous risks associated with the people side of management. |
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Benefits Realisation Insurance |
For the most important and most strategic changes in the organisation, much of the value that is expected is tied to how people do their jobs. Applying a structured change management approach is like taking out an insurance policy against the goals and objectives of the project. |
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Probability of Meeting Objectives |
There is a growing body of data showing that the more effectively the people side of change is managed, the more likely the project is to meet objectives. Prosci's benchmarking data and the McKinsey quarterly article "helping employees embrace change" show that projects with effective change management were five to six times more successful than projects that did not address the people side of change effectively..." |
(sources: Prosci, 2010; PMI, 2010; Bernard Thorpe, 2010; William Conway, 1992; Fiona Smith, 2011g)