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Dollars and Sense: Managing the Human Aspect of Change

You may have heard it said that “the only constant is change.” While this is true, we also know in practical terms that change can be unsettling. Whether it be the change experienced from a deployment of additional modules with an existing financial software vendor or the implementation of a full-scale Enterprise Resource Planning (ERP) software system across multiple departments, substantial change can produce a variety of reactions from those affected. Perhaps the most common responses are those of fear, questions of job security and organizational status, perceived loss of control and predictability, and uncertainty about one’s identity, purpose, and role within the organization.

To reduce the potential fallout from a large-scale change, it is important to garner buy-in from affected stakeholders throughout the process of any large-scale software project. Project challenges can form and escalate quickly when stakeholders do not perceive themselves to be informed, engaged, and equipped to succeed at each stage of the project. These challenges can minimize a project’s return on investment and compromise the realization of its strategic goals. For example, stakeholder resistance can pose difficulties for implementing and enforcing appropriate financial controls, or ensuring employee compliance with established procedures.

Many of the risks and challenges most commonly encountered can be mitigated by employing change management principles. To achieve a greater return on investment, it is useful to follow a project methodology that incorporates organizational change management principles throughout each project phase. But perhaps the most critical and opportune time to engage in change management activities is at a project’s initiation. It is here that the greatest opportunities exist for stakeholder participation and feedback. Furthermore, incorporating change management principles at this juncture:

  • Sets expectations for the life of the project
  • Facilitates exploration of the current environment with greater accuracy
  • Encourages more informed and collaborative decision-making
  • Provides for a more complete understanding of potential risks and issues
So what exactly is change management? It is the method of effectively managing the human aspect of organizational change at the individual level to achieve desired project management outcomes for the organization. It focuses on bringing people through a process of change, from the current state of operations to a desired future state, in order to drive positive business results. While change management may not be as easily quantifiable as project management, successful change management efforts can positively impact project success in the quantifiable terms of budget, scope, and schedule.

With that in mind, here are five key principles to incorporate at the start of your next software project for a strong start towards building stakeholder buy-in and achieving consensus:

1. Engage affected stakeholders from the outset:
Solicit staff feedback to validate assumptions about how users interact with the current software and execute associated business processes
Identify and address potential pockets of resistance to the change
Provide structured opportunities for current and future system users to provide feedback throughout the life of the project (surveys, participation in fact-finding sessions, web forms, Q&A forums)
Provide timely, audience-tailored project updates at regular intervals

2. Appoint an organizational change management lead:
Identify affected stakeholders
Create and manage project-related communications with stakeholders
Direct the use of change management principles among various stakeholder groups to positively impact the project budget, timeline, and scope
Identify and lead the resolution of project issues related to change management
Identify potential project risks and develop mitigation strategies in response
Act as a source of project knowledge and visible liaison between the project team and all other stakeholders
Invite a diverse membership from the organization’s most-affected workgroups

3. Request that IT staff play a leadership role, without sole control of decision-making:
Document the organization’s current technical environment
Identify the project’s goals and how the project contributes to the organization’s long-term strategic vision
Define how the project fits into the larger context of the organization’s IT needs
Identify necessary project resources (software funding, overtime funding, additional FTEs, training materials)
Research lessons learned and successes realized by peer communities with similar projects

4. Build an informed business case for the project:
Evaluate the organization’s past related efforts, and their potential impacts on the project
Identify challenges of the current software and associated business processes
Assess the project’s criticality and its driving factors such as limited functionality, upgrade/release schedules, and quality of vendor support
Document functional and technical requirements for the future system
Define the scope and phasing of functionality to be included in the new system

5. Garner prolonged support from executive decision makers:
Present the project request and its business case
Request documented support for the project and its strategic objectives from elected and appointed executives
Communicate all potential cost estimates for the life of the project (software licensing, maintenance and support, implementation professional services, overtime, training and change management, and contingency)
Secure funding for all project phases, where possible
Select a respected and influential individual to play an active and visible role in the project as Executive Sponsor
Change management is a necessary and valuable tool for achieving success and completing a project within budget, on schedule, and within scope. While substantial change can be complex to manage, with the right methodology and tools, one can mitigate the risks and issues posed to a project and its strategic goals.

Change management is a necessary and valuable tool for achieving success and completing a project within budget, on schedule, and within scope. While substantial change can be complex to manage, with the right methodology and tools, one can mitigate the risks and issues posed to a project and its strategic goals.

Previously published on The Government Finance Officers Association of Texas website.

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