Change Management Learning Center - managing change library

Welcome to the Change Management Tutorial Series

Home   |   Bookstore   |    Training   |  Tutorials   |   Benchmarking  |  Webinars

Email this page to a friend


 

Understanding the ROI of Change Management
With the Three States of Change

 

Return on Investment (ROI) is basically the incremental improvement divided by the cost to realize that improvement:

ROI  =

Net Benefits

or written
another way

ROI  =

Project Benefits - Project Costs
Project Costs Project Costs

This approach has been used to calculate many project ROIs in business cases. The ROI of change management has been a challenge to evaluate. This tutorial uses a simple three states of change model—Current, Transition, Future—to first explain project ROI and second show how the ROI of change management is found in the three states. It also sets the stage for building a better understanding, model and calculator for CMROI™ - Change Management ROI.

 

How to Calculate the ROI of Change Management
Join us for a free, interactive webinar and see how to calculate the ROI of change management. We will explore how to shift the conversation from "what is the ROI of change management?" to "what portion of project benefits depend on employee adoption and usage?"—providing focus and context to the discussion—and add real quantified analysis to boost your case.


How to Calculate the
ROI of Change Management
 

May 28, 2014 - 11 AM EDT
register | check local time
May 29, 2014 - 4 PM EDT
register | check local time

 

Basis of change - the three states

Prosci uses a simple three states of change model—Current, Transition, Future—to describe change. Whether a process optimization effort, Electronic Medical Records installation, software upgrade, acquisition, relocation or regulatory efforts—change is a movement from how things are today (the Current State) to a new way of operating (the Future State) through a change process (the Transition State).

 

Current
State
Transition
State
Future
State

 

This model permeates the change management literature and can be found in works like:

  • Arnold Van Gennep (1900s) - studying cultural rites of passage
  • Kurt Lewin (1940s) - using the language unfreezing, moving, refreezing
  • William Bridges (1970s) - using the language ending, neutral, new beginning

While it is true that organizations today are more in a state of "slush" than ever refreezing, and numerous changes continue in waves, each change initiative or project can be described by what we did (Current State), what we will do (Future State) and how we will make the change (Transition State).

 

Where does initiative or project ROI come from?

Using the three states of change, we can see where the ROI for the change itself comes from (not for change management yet). The improvement or benefits of the project come from the difference between the Future State performance and the Current State performance—the delta—along the dimensions the project aimed to improve. The examples below show how the difference between Future and Current performance creates the Project Benefits:

 

Future
State
Performance

minus

Current
State
Performance

equals

Project
Benefits

         
         
Lower costs Higher costs = Costs saved
Higher revenues Lower revenues = Revenue generated
Fewer errors More errors = Errors reduced
Lower risk exposure Higher risk exposure = Risks mitigated
In compliance Out of compliance = Mandates met

 

The ROI of the project or initiative comes from that difference in performance. This delta is based on achievement of expected results and outcomes and benefit realization. It is delivering on the reasons we embarked on the change in the first place.

 

Where can we find the ROI of change management in the three phases?

Change management is different—because we don't have a Future State and Current State to provide a delta. Instead, change management is applied to a particular change to improve the efficiency in moving through the Transition State and the effectiveness in the Future State. Effective change management increases the Project Benefits realized by a change; it increases the delta between the Future State and the Current State of a project.

The delta for change management then does not come from subtracting the Current State performance from the Future State performance, like the delta of a project. The ROI, or delta, for change management instead is the difference between:

  1. Project Benefits IF we can improve adoption and usage with change management, and
  2. Project Benefits IF we do not apply change management.

 

A particular project is going to occur. We can run the project with change management or without change management. The ROI of change management is the difference in Project Benefits realized if we actively drive employee adoption and usage or those if we do not.
 

Project Benefits
(with change
management)
 : Future
State Performance
(with change
management)
- Current
State
compared to        
Project Benefits
(without change management)
 : Future
State Performance
(without change management)
- Current
State

 

Change management directly supports benefit realization and project ROI by increasing the Project Benefits captured through a more efficient Transition State and more effective Future State. By applying change management we can:

Improve the Transition State
which creates more
Project Benefits:
  • Increase the speed of employee adoption
  • Make sure employees have the answers they need
  • Ensure training occurs at the right time with the right context
  • Show leadership and organizational commitment to change
  • Reduce the number of barrier or obstacles experienced
Improve the Future State
which creates more
Project Benefits:
  • Increase ultimate utilization of the change by employee
  • Reduce the number of employees who opt out
  • Drive employee proficiency when they have adopted the change
  • Encourage sustained results for the initiative
  • Reinforce desired changes by employees

 

Conclusion

Essentially, we have a change that we know is going to happen. If we apply change management, we increase the Project Benefits the change generates by more efficiently moving through the Transition State and more effectively arriving in the Future State. The ROI of change management is the improvement in project ROI that comes from focusing on and driving employee adoption and usage. As a change management practitioner, you can begin describing the ROI of change management within the context of project ROI to build buy-in and commitment so you gain a seat at the table.

 

How to Calculate the ROI of Change Management
Join us for a free, interactive webinar and see how to calculate the ROI of change management. We will explore how to shift the conversation from "what is the ROI of change management?" to "what portion of project benefits depend on employee adoption and usage?" - providing focus and context to the discussion - and add real quantified analysis to boost your case.


How to Calculate the
ROI of Change Management
 

May 28, 2014 - 11 AM EDT
register | check local time
May 29, 2014 - 4 PM EDT
register | check local time

 

 

 


 

Email this tutorial to a friend
Ask a Prosci analyst
Order online - secure server Order the Change Management Toolkit or Change Management Pilot for complete change management assessments, templates, guidelines and plans

 


 

Prosci Change Management Certification

"Amazing: these three days are going to save me
hundreds of hours and help me help my company
realize the benefits they seek."
- Mike C., April 2011 participant

"I'm truly inspired!" Joe F., May 2012

"The most applicable training I have been to - ever!
Great, applicable training & usable tools."
Chelle, November 2012

 

Program highlights:

  • Learn the methodology through practical application to your current project
  • Learn from experienced executive instructors
  • Become part of a change management community
  • Earn 2.4 CEUs, 24 PDUs and 23.5 HRCI recertification credits
  • Walk away with products and course materials worth over $1000

Download the certification program brochure

Upcoming sessions:

  • June 3 - 5, 2014: Washington, DC area
  • June 10 - 12, 2014: Houston, TX area
  • June 10 - 12, 2014: San Francisco, CA area
  • June 17 - 19, 2014: Chicago, IL area  FULL
  • June 17 - 19, 2014: San Diego, CA area
  • June 24 - 26, 2014: Denver, CO area
  • June 24 - 26, 2014: Orlando, FL area
  • July 8 - 10, 2014: Washington, DC area
  • July 8 - 10, 2014: Chicago, IL area
  • July 15 - 17, 2014: Denver, CO area
  • July 22 - 24, 2014: New York, NY area
  • July 22 - 24, 2014: San Francisco, CA area
  • July 29 - 31, 2014: Portland, OR area
  • July 29 - 31, 2014: San Diego, CA area

Visit the certification training page

Email a certification inquiry or call
+1-970-203-9332 to register today.

"Awesome! Best training program I have attended in my career!"
Ryan L., May 2012

"Best course I've ever takenů Incredible instructors and excellent material. Can't wait to use it!"
Kim P., August 2012

"This is the best training that I have ever attended. Now I understand what I need to do when I go back to the office and start to immediately apply what I've learned. Very organized and easy to follow. Great online resource and USB and hard copies."
Tamaho Q., July 2012

"Absolutely Awesome!!! 5 stars!" Brenda M., December 2012

"Excellent course. Well worth the investment of time and money. Excellent job!"
Sue A., July 2012

"Excellent class - would recommend to anyone." Walt J., August 2012

"This is one of the best programs I have attended. Excellent faculty, outstanding material, and amazing use of experiential learning techniques. Attention to every little detail, comprehensive program, material, great planning, outstanding facilitation."
P. Ravi S., November 2012

"Excellent training, excellent content, extremely comprehensive addressing of CM concepts & practical approach. Best instructors ever!!!"
Panos P., December 2012

"The best training class I have had in years. Goes way beyond the strategy and framework and focuses on real world problems and the tools to solve them."
- Jennifer J., April 2009

"I gained so many skills in such a short amount of time. This training will impact not only my own ability to manage change, but impact our larger organization."
- Kim W., January 2012

"This is the best training class I've ever attended."
- Abby D., April 2011

"This was the most effective and engaging course I've ever taken. I feel that I can truly use this knowledge in my personal and professional life immediately."
- Lisa S., February 2009

"This is exactly what I was hoping for - a hands on program that would allow me to absorb the concepts by relating them to a current business project."
- Lisa C., November 2010

"Awesome - truly one of the most beneficial programs I have ever attended - immediate application on the job!"
- Robin S., March 2009

"This program absolutely over-delivered my expectations. I now feel more prepared and better equipped to do my job."
- Paul S., January 2009

 

 

Offerings for applying Prosci's change management methodologies:

Licensing:

  • Prosci's site licenses are a great solution for building change management capabilities and competencies throughout your organization. With a site license, you can customize and integrate Prosci's world-leading research and methodologies to fit your organization and begin building the individual competencies necessary for true change capability. Contact a Prosci Account Manager at +1-970-203-9332 or changemanagement@prosci.com to discuss your change management needs and how Prosci's research-based, holistic, easy-to-use solutions can work for you.

Training:

  • Change management certification ($2800) - attend Prosci's 3-day certification program where you bring your own current change project to the session and learn to use Prosci's tools through practical application - taught by former fortune 500 executives at locations across the US - includes over $1000 in products, including the Best Practices in Change Management benchmarking report, the Change Management Toolkit and the Change Management Pilot Pro 2012
  • Train-the-trainer ($3500) - learn how to teach Prosci change management training programs in your organization
  • Onsite training - bring Prosci to your location for 3-day certification programs, 4-6 hour executive briefings, 1-day manager programs or 1-day employee programs - call +1-970-203-9332 for more information

Methodology tools:

  • Change Management Toolkit ($389) - hardcopy 3-ring binder presenting the Prosci Change Management Methodology, includes templates, checklists and assessments for managing the people side of change (includes USB)
  • Change Management Pilot Pro 2012 ($489) - online tool including the Prosci Change Management Methodology, eLearning modules and downloadable templates, assessments, presentations and checklists
  • Change Management Guide for Managers and Supervisors ($209) - tools to help supervisors engage and coach their direct reports through change
  • PCT Analyzer ($149/$349) - web-based tool for collecting PCT Assessment data, analyzing results, identifying risks and developing action steps

References and books:

  • Best Practices in Change Management benchmarking report ($289 / quantity discounts available) - journal-style report with lessons learned and best practices from 650 participants, presented in an easy-to-use format - reads as a checklist of what to do and what not to do
  • Change Management: the people side of change ($18.95 / quantity discounts available) - a primer for anyone involved in organizational change that addresses why manage change, individual change management and organizational change management
  • ADKAR: a model for change ($18.95 / quantity discounts available) - the definitive work on the Prosci ADKAR® Model
  • Employee's Survival Guide to Change ($14.95 / quantity discounts available) - a handbook to help employees survive and thrive during change, answers frequently asked questions and empowers employees to take charge of change

 

 

*** Prosci also offers leadership packages - groupings of products at discounts that offer you some of the most helpful and common combinations of Prosci change management resources

 

 

Email this page to a friend

 

Email a Prosci analyst or call 970-203-9332 with questions about the methodology, its application, or finding the right resources to support your change management activities.

 

 


 

*** Register to receive free news announcements and tutorial releases ***

 

 

Tutorials | Bookstore | Benchmarking | Articles | Training | Register | Webinars | Resources | Home

Copyright Prosci 1996-2014
Prosci and ADKAR are registered trademarks of Prosci Inc.
Send comments to a Prosci analyst

 

Contact Prosci
email: Prosci email form
phone: 970-203-9332 or 800-700-2831
5042 Technology Parkway, Suite 500
Loveland, CO  80537  USA