Johannesburg, 16 Feb 2005
CIOs worldwide are often daunted by the risks associated with new IT projects and implementations, yet the evidence shows that many of these risks can be alleviated or eliminated through effective change management.
Research from top business process education company, Hammer and Co, shows that only 9% of all major software development applications in large organisations are worth the cost of implementation and that 31% of software implementation projects are cancelled before completion.
Frightening statistics? Indeed they are, but the outlook is even bleaker, says Johan Jacobs, change manager at Quartet Solutions, when one realises that, irrespective of success or failure, 53% of software implementations result in cost overruns of up to 189%.
"There may, naturally, be many reasons for this dismal performance, but all the available evidence points to a single primary cause - inadequate attention that is paid to the 'human implementation' supporting projects."
Jacobs stated that numerous local and international studies have shown that more and more key decision-makers in organisations are subscribing to this fact.
"There are too many examples of expensive investments in strategic change projects not delivering the anticipated results. What astounded organisations in this regard was the fact that failure was experienced even though adequate attention was paid to selecting the best-fit and best-in-breed tools, as well as sound project management.
"In addition," says Jacobs, "it is alarming when one considers that the ability to manage change effectively is considered a necessary core competency of companies and managers in the 21st century.
"This is borne out by numerous studies that have found most organisations report a collapse in staff morale during times of change. McKinsey, for example, reports that an individual's productivity level in an eight-hour day can drop by up to 3.6 hours during a transformation period. The American Management Association says that up to 25% of top performers leave within 90 days of a major change event being announced."
The problem, Jacobs believes, boils down to an incomplete understanding within organisations of what change management really is and of the critical role that people or, more specifically, employees, play in the ultimate success or failure of a project.
"Change management should be seen as the process of taking people systematically on a journey to reach a defined goal. That journey is not necessarily to do with a new technology implementation; it could be anything from a merger or acquisition to an outsource engagement.
"In short, change management is about managing the risk that an organisation exposes itself to when attempting change," he says.
The key concepts, therefore, are that change management is both systematic and a process - ie there is both a beginning and an end, resources will be consumed, there are clearly defined deliverables and there is a process owner. "By far the most critical component is the people. Regardless of whether it's a new application or system, a new merger partner or an outsourcing partner, it's the people interface that change management is most concerned with. It's about making that interface actually work," Jacobs says.
"The objective is always a successful change implementation. If one takes a new application as an example, to achieve that goal you need project management, technical infrastructure and, most importantly, the human side of the implementation," he concludes.
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