How to Budget Wisely for Enterprise-Wide Changes: The Role of Change Management in Benefit Realization

Posted by Paula Alsher on Thu, Feb 02, 2017 @ 02:32 PM

Walk into almost any large corporation and we bet you will find at least one (if not more) of these changes in their change portfolio:  shared services, mergers or acquisitions, ERP/technology updates, customer-centric strategies, and other one company solutionsThese enterprise-wide changes can all be significant strategic solutions to critical business problems or market opportunities. In fact, “one company” business models can markedly improve customer satisfaction, materially reduce operating margins, utilize resources more effectively, improve internal collaboration, and position the organization to respond quicker to changing market conditions. The ROI is staggering.  But…so is the investment required! Budget Planning for Change Management

Implementation success for enterprise-wide change requires a predictable set of activities for the human elements of the change that must be accounted for from a budgeting perspective.  Organizations can either budget sufficiently for these activities now, or pay the price later in stalled or failed implementations.


Don’t Forget The Human Elements

It’s common for organizations to focus on the budgets for the technology and business aspects of strategic implementation. The budget is developed based on the premise that the project will be complete at the point of “go live,” rather than at the point that benefit realization is achieved.  This creates a major barrier to success right from the start, because the budgeted goal is "installation" when the true end-goal should be "implementation."

Too often, less emphasis is put on the resource requirements and change management deliverables for the full array of requirements for the human-side of the implementation.  This includes activities that are either overlooked or under-resourced, including: 

Unfortunately, this can leave a project team woefully short of the budget needed in terms of the size of the project team, the number of Change Agents across the affected areas, and the time allocated to complete the project through to sustained adoption.


Three Ways to Improve the Odds for Implementation Success

As strategy development becomes translated into operational budgets and plans, here are three actions that you can take to improve the odds for implementation success:

  1. Budget for Implementation Capability Development

If the organization is investing in a new strategy, it’s common sense to make certain that the players have the knowledge and skills needed to implement the strategy. 

For example, this means ensuring that Sponsors are aware of how their own behavior will control the pace of this implementation through Sponsor training.  It means that Change Agents will need to have an understanding of the principles and tactics for building commitment (and/or compliance) to the change implementation.  It means the Change Agents must have the skills and knowledge to effectively contract with Sponsors for what they need.  

Investing in change management training programs has short-term immediate value, and long-term benefit. The organization with implementation capability has an enormous competitive advantage!  In today’s global environment, no organization can lead without change capacity.

  1.  Budget for Sufficient Resources for the Project Team and Change Agents

If the organization is investing in large-scale, complex transformational change, make certain that there are sufficient resources committed. Sponsors typically under-estimate what it takes to actually implement transformation.  Remember, transformational changes are those where you are seeking to have your people do “different things, differently.” While all enterprise-wide changes are not transformational in scope, many are!

Implementation of these complex changes is a ferocious, resource-consuming activity.  Teams consisting of large numbers of “partial resources” can be inefficient.  

One way that Authorizing Sponsors visibly demonstrate their commitment to is how they allocate resources.  If sufficient budgets haven't typically been allocated in the past, this is an immediate and visible opportunity to demonstrate that this change is different.

  1. Build a Timeline that Reflects the Implementation Activities and Deliverables Required for True Implementation Success

As the budget is built, consider that the project team infrastructure will need to remain in place until the goal of full implementation is achieved.  By our definition, implementation is only deemed successful when it is:

  • On time,
  • On budget,
  • With all business, technical, and human objectives met

If you stop short and disband the project infrastructure at the point of “Go Live”, you are risking achieving benefit realization for your significant investment in the change.

Enterprise-wide change can be difficult and complex. On the “business side” it requires changes to strategy, structure, operations, and technology. On the “people side”, changes in employee expectations, perceptions, behaviors, and skills are all required.  But, by budgeting with the goal of Return on Investment in mind, your organization is far more likely to achieve the desired results.

The Real Cost of Transformation and Culture Change


Topics: Change Management Methodology, Installation vs. Implementation, Enterprise-wide Change, Value Realization/ROI, Implementation Planning