The Potential Return on Investment of Change Management

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From the C-level to entrepreneurs, you hear the term change management batted around. It has slightly different meanings depending on the area of business to which it refers.

Change Management as a Concept

In general, change management refers to managing change within the overall organization. It focuses on the people in the business – the management processes, techniques and tools needed to achieve specified business outcomes. Those tools include organizational tools that help individuals within the organization successfully adapt by adopting and realizing required changes.

Change Management and Software

The term change management applies in multiple ways to software. In relationship to software development, it refers to the process of bug tracking and change or update requests. In relationship to software installation and software maintenance, also referred to as software configuration management (SCM), change management refers to tracking and controlling software changes, updates and upgrades. Configuration management, a cross-disciplinary field includes baseline establishments and revision control. In addition to ensuring that change occurs effortlessly, if an problem does occur, the use of SCM pinpoints the problem and its source.

Making Change Benefit Your Organization

Regardless of whether you use the Japanese method of kaizen to identify needed changes or a more traditional manner, you need to manage the change implemented. Each change or alteration to your business’ policies or procedures should improve your bottom line.

That means you need to examine the potential return on investment (ROI) before implementing a change. If modeling the final implementation does not result in positive ROI, do not make the change. If it results in a positive ROI, do make it.

According to a 2006 Pepperdine University study, companies with a well-designed change management program produced an average 143 percent ROI. That means they earned 43 on each dollar invested in the policy or procedural change. That makes a strong argument for starting a change management program that extends to all organizational areas – human resources, line procedures, software, etc. Manage change and make money.