That's a bit of a complex title I know. Lets break this important subject down. Lets understand why the calculation of the "people-side" adoption contribution to ROI of your project is a vital component to the success of that change.
Calculating the "people-side" adoption of Change & project ROI
"People-side". For any change to be effective there is usually some kind of new technical, structural or organisational capability that needs to be installed. It could be a new system, process or indeed a change in behaviour or culture. If we agree that the premise of introducing such a change is to make the future state better than the current there the should be some purpose behind the change and expected results from the change that we can explain to the people directly impacted by it. Often there is also an expected financial Return on Investment (ROI) from any change.
Calculating the ROI of Change
Some benefits appear and grow simply by training the impacted people in the new capability and switching it on, so long as it works reliably and as anticipated, and the training is well designed and executed. We call these "installation benefits" and they accrue if the "technical side" of change, project management, is executed on time, to specification and on budget, either if the new capability is deployed as a whole in a sequential "Waterfall" project or iteratively, piece-by-piece, as releases in a project using "Agile" methods.
Other benefits appear and grow as more and more of the impacted people proficiently adopt and use all of the different features of the new capability. That proficient adoption of the new ways of working required, by the maximum number of people possible, can start shortly after training is completed and really accelerates through the Go-Live phase of the project/release and beyond. We call these "realisation benefits", as they depend upon people to change the way they work each day in order to fully realise them. This is the "people-side" of change and the size of these benefits accruing through the project/release life-cycle can be positively influenced by effective change management.
The thing is though that for every different new capability or release launched the proportion of installation benefits to realisation benefits varies. In some it might be 20:80, in others 80:20, or anywhere in between.
Allocating the Right Resources for Change Management Projects
Clearly none of these benefits are realised without work and work requires people, time, resources and money to pay for them. In order to allocate the right amount of resources and money to the activities that generate both maximum installation and realisation benefits - maximum Return On Investment (ROI) - we need to ensure that all of the key stakeholders involved in the successful deployment of this new capability understand and agree this split of proportion, and assign the right amount of resources and money accordingly to both.
Without the correct assignment of resources and money to both the technical side and people side of your change project the changed is destined to deliver less ROI or other benefits than expected.
To calculate the actual proportion split of installation benefits vs realisation benefits on your change project, so that key stakeholders can reach consensus agreement how dependent the success of your change is on the people side relative to the technical side and assign resources correctly to both, Prosci have developed an advanced cloud based tool called the CMROI Calculator.
Key stakeholders collectively answer a series of questions about the expected organisational results and project benefits demanded from a specific change project, their relative importance and contribution to results and the CMROI Calculator calculates the split of installation and realisation benefits. Usually this takes a maximum of 45 minutes to complete.
For more information on this subject, 1-year access to the Prosci CMROI Calculator and 4 other advanced Prosci tools, plus coaching in why, how, with whom and when to use them on one of your change projects please respond below.
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