The ROI of effective change management is not always easy to calculate, but it can be done.
With the right KPIs, change management metrics, and goals, you can achieve (and measure) real returns from your change projects.
Below, we’ll explore three examples of how organizational change can generate significant ROI.
- How changes to business process can generate a number of benefits, which translate into bottom-line returns
- How digital technology can improve processes, workflows, and more
- How improved customer experiences can positively impact customer value
Whether you are making a case for change … or whether you are considering a change … it is crucial to understand how change management impacts the bottom line.
The ROI of Effective Change Management: 3 Examples
Change projects themselves usually fall into categories.
There are many types of change management projects, such as:
- Releasing new products
- Adopting new software or technology
- Digital transformation
Below, we’ll look at three types of change programs, then see how they generate returns.
From these examples, it should be possible to extrapolate similar conclusions for your own proposed changes.
A business that decides to revamp or overhaul a set of processes will likely initiate a change project.
This can have positive impacts on every process involved, but it can also have unforeseen benefits.
In a study by Google, the biggest benefits of change projects included:
- A more fulfilling and attractive workplace
- Process efficiency
- Cost reduction
- Increased innovation
All of these benefits highlight an important point – change management improves work environments and processes.
These benefits translate into bottom-line ROI in a few ways:
- A better workplace improves employee satisfaction, which positively impacts other employee metrics, such as employee productivity, engagement, and longevity
- Process efficiency translates into reduced budgets and timelines, which can also positively impact employees involved with those processes
- Cost reduction, of course, has a positive impact on budgets
- Increased innovation can result in better products, services, or processes
These examples show a clear link between the target objectives of a project and quantitative, bottom-line benefits.
However, business processes are just one example of change management projects.
Let’s look at a couple more.
Technology has fueled innovation and disruption across the entire global economy.
This global transformation has opened up a world of opportunity for early adopters.
And it has also applied pressure to laggards, incentivizing them to change.
For companies that undergo digital transformation, this presents a number of benefits:
- Improved work environments – Virtual work environments, remote working, and flex-hours are examples of digital technology in action.
- Better workflows – Digital technology can mean increased efficiency and online collaboration.
- More productivity – The right software can dramatically improve results, speed, and output.
- A competitive edge – Organizations themselves can gain a marketplace advantage with the right technology.
- Insights and foresight – Data and analytics can provide useful insight and intelligence, informing decision-making.
These are a few ways that digital transformation and digital adoption can generate real ROI for a business.
Naturally, the type of technology adopted – and the type of transformation undertaken – will directly impact the returns generated.
Another potential benefit from digital transformation is detailed next.
Today’s modern, digital businesses put customers at the heart of their revenue model.
More and more, businesses are initiating change that puts customers first.
Amazon is a prime example of such a company. The online retail giant is well-known with its obsessive attitude toward customer service and the customer experience … for good reason.
Change programs that aim at improving the customer experience can reap big rewards.
- Customer satisfaction – Customers who have better experiences, whether it is during checkout or with customer service, will be more satisfied with the company.
- Engagement – Online or off, a more engaged customer is more likely to spend money, use an app, and be loyal to a brand.
- Lifetime value – Customers with better experiences will ultimately have a greater lifetime value (LTV) than those with poor experiences.
On top of these examples, a positive customer experience is more likely to mitigate negative reviews.
These are a few of the main benefits that can be derived from customer experience change programs.
However, there are certainly others.
Final Thoughts: Find Your Own ROI
Change management initiatives should be part of an organization’s big-picture strategy.
Correctly designed, these initiatives can generate significant benefits and ROI from your change programs.
And, as we’ve seen, these returns have positive impacts on the top and bottom lines.
Regardless of your industry or the size of your business, change management is worth the investment.
This is especially true today, when digital technology is fueling transformation on a daily basis.
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.