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The pace of change in many companies is accelerating, but many attempting digital transformation have a huge problem. The systems they are implementing fail at an alarming rate.
Why do they fail? Too often, it is not because of problems with the technology but because the new systems are not fully embraced by an often-frustrated workforce.
For example, a company might pick an excellent CRM system, and the implementation team might do a great job at installing it. But the sales force might refuse to use the new system. The problem would not be with the technology but rather with users embracing the new system.
What can business and IT leaders do to address this “people side of change?” The good news is that there is a whole set of disciplines that have evolved over many years to maximize user adoption, to ensure that new systems are accepted and truly embraced by the workforce. These disciplines are known as organizational change management.
Unfortunately, while most know about and claim to be practicing some form of organizational change management, our full report, Organizational Change Management Adoption and Best Practices, shows that only a tiny fraction practice it whole hog. Figure 3 from the report shows that only 13% of our respondents practice change management formally and consistently.
“IT leaders recognize the need for strong project management, but that only deals with the technical side of the implementation,” said Tom Dunlap, director of research for Computer Economics, an IT analyst firm based in Irvine, Calif. “It’s possible to bring in a new system on time and within budget and then have no one using it. You really do need to deal with the people side. It’s incredible how often those human factors are neglected.”
Organizational change management is not limited to IT. These disciplines can and should be used to ensure maximum adoption of any kind of change, whether it be a change in business strategy, a corporate merger, a new approach to customer service, or a new organizational structure. It includes activities to ensure that all affected workers understand the need for the change, get behind it, and are trained to work in the future state. It also includes actions to overcome resistance, where it exists. Everyone involved in the change has a role to play, from the executives who sponsor the change, to the managers and supervisors who implement the change, to the front-line workers who must carry out their responsibilities in the future state.
When it comes to IT, organizational change management is especially needed for projects where the full return on investment depends highly on user acceptance of the change. For example, organizational change management is probably not needed for a project to upgrade to a new version of a data center operating system, because it does not greatly affect how end-users do their jobs. But for a new CRM system, ERP system, or HR system, for example, organizational change management is absolutely essential.
In our full report, we look at adoption trends and maturity of organizational change management by organization size and sector. We conclude with practical recommendations for companies to start or improve their change management practices.
This Research Byte is based on our report on this subject, Organizational Change Management Adoption and Best Practices. The full report is available at no charge for Computer Economics clients, or it may be purchased by non-clients directly from our website (click for pricing).
Questions about this research? Contact the Analyst.