What Is the ROI Of Change Management?

It has been proven through various studies that normally in large projects, ROI of change management in an organization greatly affect its profits. It has also been proven in many cases that they fail to achieve even the original targets after change management. But mostly the internal aspects of the organization were found by various experts to be responsible for the considerable fall in ROI of the project even after change management in various large organizations.

Lack of dedication and persuasion among seniors, imperfect management skills for the project among mid level managers and confusion and lack of training among the frontline employees were noticed by the experts as the main causes of poor impact of change management on ROI. Proper involvement of the frontline employees along with senior and mid level managers and their clearly defined responsibilities, can help the organizations in achieving the targets successfully due to clear understanding and acceptance of the project.

ROI Of Change Management

A model for the ROI of change management was developed by some of the experts in this field on the basis of the three decisive factors of human nature which can influence the ROI in any project. It included speed of adoption of change management which  includes new system, process, tools and technology, utilization of the change management and the proficiency of the senior and mid level managers along with frontline employees in implementing the change.

The impact of  ROI of change management in an organization can be better understood through an example of say fruit exporters who wanted to implement software to analyze international market regarding their product. Let’s suppose they used this software to track the retail prices in local market, predict on changes in productivity and cost and the impact of change in consumers’ trend and weather on their products, without any change management. Around $4 million was the cost of implementation of this software in this condition.

The software was implemented with the existing enterprise systems of the fruit exporting organizations but their employees and managers were directed to submit all types of accessible information to the software as per its functionality. After submission of reports to the decision makers of the company it was analyzed that the adoption rate of the software was much low than expectations even after six months of its implementation.

Suppose the implementers of this software suggested a change management program by analyzing stakeholders and training the employees all over the world through internal communication campaign and training workshops at various levels. The cost of implementation of this software alongwith this change management may rise upto US$6 million. But this increase in investment will be fruitful if the organization shows 10% increase in its annual profits much before than when the software was implemented without any change management.

Thus ROI of change management can be beneficial for an organization if it is properly planned and funded with rate of adoption, utilization and proficiency of the employees.

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Christopher Smith
Chris is the Lead Author & Editor of Change Blog. Chris established the Change blog to create a source for news and discussion about some of the issues, challenges, news, and ideas relating to Change Management.
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