Cost-benefit analysis for change management
From Prosci and the Change Management Learning Center’s
"why change management" tutorial series
http://www.change-management.com/tutorial-why-cost-benefit.htm
The following worksheets come from the “Cost-benefit analysis for change management” tutorial available
at: http://www.change-management.com/tutorial-why-cost-benefit.htm.
The tutorial presents five benefit perspective on the value change management brings to projects and to
organizations. The five benefit perspectives are listed below, and the following pages include the benefit
worksheets from the tutorial.
Summary of five "benefit" perspectives for change management
Perspective 1:
three "people side" ROI factors
Change occurs at the individual level. The value that a project delivers
to the organization 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 utilization) and how
effective each one of them is when they have adopted the change
(proficiency).
Perspective 2:
cost avoidance
We incur significant and quantifiable costs when changes are poorly
managed, at both the project and the organizational levels. In addition
to the extra costs of fixing the people-side issues that creep if we
ignore change management up front, the organization 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
on our projects.
Perspective 3:
risk mitigation
Ignoring the people side of change results in numerous risks to the
project and to the organization. We leave ourselves exposed to these
people risk 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 change.
Perspective 4:
benefits realization insurance
For the most important and most strategic changes in the
organization, 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.
Perspective 5:
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.
Prosci © 2009
www.change-management.com
1
Cost-benefit analysis for change management
From Prosci and the Change Management Learning Center’s
"why change management" tutorial series
http://www.change-management.com/tutorial-why-cost-benefit.htm
Three "people side" ROI factors worksheet
Name of the project:
One group that is being
impacted by the change:
Identify the specific changes
in behaviors or processes
required of this group.
Speed of adoption:
What does "adopting the change“
mean for this group?
How would you measure if
someone had "adopted" the
change in their day-to-day work?
Ultimate utilization
Define utilization for this group.
How would you measure how
many people in the group have
adopted the change?
Proficiency
What would adopting the change
proficiently mean?
How would proficiency be
demonstrated?
How would you measure it?
Prosci © 2009
www.change-management.com
2
Cost-benefit analysis for change management
From Prosci and the Change Management Learning Center’s
"why change management" tutorial series
http://www.change-management.com/tutorial-why-cost-benefit.htm
Cost avoidance worksheet
Identify costs to the organization of poorly
managing change
(where possible, estimate a dollar value)
Identify costs to the project of poorly
managing change
(where possible, estimate a dollar value)
Identify potential costs to the organization if
the project is not fully implemented (where
possible, estimate a dollar value)
Prosci © 2009
www.change-management.com
3
Cost-benefit analysis for change management
From Prosci and the Change Management Learning Center’s
"why change management" tutorial series
http://www.change-management.com/tutorial-why-cost-benefit.htm
Risk mitigation worksheet
1.
Outline the three biggest
people risks facing this
particular change:
2.
3.
1.
Outline the three biggest risks
facing the project if the people
side of change is ignored.
2.
3.
1.
Outline the three biggest risks
to the organization if the
change fails:
Prosci © 2009
2.
3.
www.change-management.com
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Cost-benefit analysis for change management
From Prosci and the Change Management Learning Center’s
"why change management" tutorial series
http://www.change-management.com/tutorial-why-cost-benefit.htm
Benefits realization insurance worksheet
How much “people change” will
this project require?
Identify several of the primary
process and behavioral changes
required by the project.
List five of the objectives of this particular change and identify if they are dependent on the
people side of change and how much of the benefit is tied to people doing their jobs
differently.
Is meeting this objective
dependant on people doing
their job differently?
Objective:
What percentage of these
benefits result from people
doing their jobs differently?
1.
2.
3.
4.
5.
What percentage of the overall
project benefits are tied to people
doing their jobs differently?
How effectively have you
insured this portion of the
project benefits?
Prosci © 2009
www.change-management.com
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