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November 2012
Project Management and Change Management
By Kathleen Kraft

     Projects often appear to be the lifeblood of a company. In contrast to daily operations, projects are defined by having a beginning, an ending and a goal to achieve a change in some organizational aspect. Project Management is the structured discipline applied to support organizations in managing these projects from beginning to end.

     Change, on the other hand, is often the new behavior or performance an organization desires to reach through the project. Change Management is the application of a structured process and tools to lead the people side of change and increase the probability of project success.

     So, if projects create change to reach goals, why are Project Management and Change Management professionals often at odds? Project Managers often contend, “I don’t need those warm and fuzzy change people messing up my project,” while the sponsors and finance people often believe the project manager should handle the change—after all the Project Manager is tasked with successfully managing the project. In some cases change managers may be assigned to manage the technical change through Change Control Boards or ITIL Service Management. While there is change management involved in that process, it is technical and project change, not the people side of change.

     In reality, Project Managers and Change Managers need each other: It is the integration of Project Management and Change Management which delivers the most successful projects.

     How successful? According to global Change Management benchmarking research conducted bi-annually by Prosci, projects which utilize Change Management strategies and activities are six times more successful in reaching the targeted project goals than projects which do not include Change Management. Six times? Is Change Management really that important?

     Consider this scenario: In a recent program undertaken by a major energy organization, more than 80 issues were identified as impacting the ultimate adoption of a new technology and business processes within the organization. Of the 80 issues, at least one issue created a $500,000 (and growing) problem—primarily due to increased equipment costs of replacing equipment erroneously removed by employees and the labor costs of utilizing contractors to re-install the equipment.

     In review, the root cause was the people (operations) did not understand the changes the first time and dependent processes increased the volume of the problem. The project was technically on time and in scope—but the people were not cooperating!

     Ultimately a Change Management effort was developed, root causes were identified, a change strategy was deployed and, in less than three months, incorrect installations were reduced by more than 80 percent.

     The result was real money being saved—this project is anticipated to bring benefits of more than $200 million to the organization. What is the impact of having a major portion of that program off track? In the end, is it worth it to pro-actively invest in Change Management to eliminate the issue and reach the benefits?

     Now, Change Management is not magic. It works best as part of an integrated approach with an active and visible sponsor (or sponsors), properly defined scope and charters, and governance. And ultimately the Project Manager does generally have the responsibility to bring the project in on time, on budget, in scope and with quality. That job is made easier by integrating Change Management tools and processes within the project.

     Another consideration is the ultimate sustainability of a change. Delivering the change is hard enough—the real challenge is often sustaining that change within the organization. It’s the “stickiness” or adoption that is the ultimate measurement of a project success—the delivery and achievement of the ultimate benefit.

     Now suppose the project is to deliver a new integrated SAP or ERP program—big, expensive programs which generally impact most if not all business units. If an organization is targeting saving $20 million annually, the integration of effective Change Management within the project helps organizations reach that targeted benefit 95 percent of the time.

     This is the most compelling reason to insist Project Managers and Change Managers work together on a project to develop an integrated approach—we need the people to help us design, develop, test and execute the change. By considering the stakeholders (the people) upfront, we are more likely to reach and sustain our project goals including those important financial benefits.

     As business managers, and project sponsors, the real question should be: How can we not afford to integrate Change Management into our Project Management approach?

 

Senior Managing Consultant and Organizational Change Management Knowledge Domain Leader for the U.S. IT Services Division.
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