So many IT efforts never achieve their intended outcomes. Studies show that 95% of all IT program short-comings had absolutely nothing to do with the technology selected for the effort. Principal Jesse Jacoby provides further insight on the under-utilization of sound OCM practices based on a Gartner Group survey of over 150 SAP projects conducted in the last two years.
A 2011 Gartner survey1 found that companies under-invest in organizational change management. Companies allocate, on average, only 5% of the overall system implementation budget to the organizational change management effort. Gartner recommends that companies allocate an average of 15% of the program budget to organizational change management, inclusive of training — but more, if changes are significant or the corporate culture is more change-averse.
The survey also found system integrators have relatively weak organizational change management capabilities. Across the 169 implementations surveyed, companies were least satisfied with their system integrator’s organizational change management skills. Organizational change management came in last among a list of 19 aspects of service provider performance that participants rated. As such, Gartner recommends considering a firm that specializes in organizational change management to augment the program team.
These findings re-affirm previous research that organizational change management accounts for 17% of the success of an IT project2. Among clients whose system implementations had failed or were at risk of failing, mishandling of the project’s organizational change effort was a key contributor to the failure3.
The Role of Organizational Change Management
Why do many excellent IT system implementations never realize the long-term benefits they set out to achieve? Primarily, it is because companies focus disproportionately on the structure and technical aspects of the IT program itself, and not on engaging employees in the process – showing them a “truth” that motivates them, at a very basic human level, to invest them in the change effort.
The most well-designed system implementation, if not centered on people, is doomed to fall short of its objectives. A successful IT change program links the logical—“here’s a great new IT system that will enhance your productivity”—to the emotional: “Your team could spend all night tabulating this stack of paper. Or you can use the new database and be out by 5 p.m.” Abandoned IT projects typically suffer from a lack of balance between the “analyze-think-act” side of the brain and the “see-feel-act” side of the brain.
Gartner recommends embedding organizational change management into the program structure and treating it as being of equal importance as the technical aspects of the implementation. The organizational change management effort should begin as early as possible. Assessing change impacts early allows the project team time to address issues, obtain buy-in from business sponsors and end-users, and develop interventions that help the organization adapt to new processes and technologies, and adopt new behaviors.
To read the full position paper please visit the Newport Consulting Group website here.