Change Management Guide:
The Process, Challenges & Benefits

What Is Change Management?

Change management involves the methods and actions in which a company describes and implements change within its internal and external processes. Every project has a transactional change control component embedded into it, therefore every company that executes projects is already dealing with change and the management of change, separate from any organizational change transformation that may take place.

Change management runs through every aspect of a project and business. If proper communication and standardization are not implemented throughout the entire organization, change management can fail, and cause projects to fail along with it. However, it can be difficult to successfully implement the golden thread of change management without the necessary people, processes, and technology in place. These three pillars, along with five key criteria, should be part of any new change management procedure. When carried out correctly, this golden thread of change management results in significant time and cost savings, as well as increased project performance, due to transparency, visibility, and greater efficiencies.

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Change Management Challenges

The problem plaguing the majority of project organizations is that they are trying to use spreadsheets as their mechanism for tracking and managing change.

Major Failings of Spreadsheets for Project Change Management

When it comes to change management, spreadsheets have two major failings:

1.) Spreadsheets do not accurately reflect the complexity that change can have on medium-to-large projects.

2.) Spreadsheets are unable to provide the big picture and historical context of the change, as well as the knock-on effect to other systems and aspects of the project.

Project organizations need a robust change management procedure that supports communication with all stakeholders, both inside and across the organizational boundary. Strong governance and a clear audit trail are a crucial part of the administration of change management on major capital programs.

Without a consistent thread running through the entire project environment, assessing and managing the impacts of change becomes unwieldy. In fact, understanding how to implement structured change management processes, procedures and controls successfully can make the difference between whether or not a project succeeds.

The Golden Thread of Change Management:
The Importance of Change Control

Two years from now, you may find the project you are engaged on is behind schedule or over budget. You will find yourself and others asking, “Why? How did we get here?” Without robust change management procedures, processes, and tools, you will not have the traceability to answer those questions.

It is difficult to understand the complexity of change and complete appropriate impact assessments, without structured change management processes throughout the entire organization.

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Without a strong change tracking capability that can fully integrate with other systems, it is also impossible to take those impact assessments and turn them into what is coming to be known as the golden thread through the project – the thread that can be followed from its current position back through all the change efforts and throughout the project. 

You can trace it back through all the scope changes and the productivity issues, back through the unexpected events, all the way back to the original schedule and budget estimate. A list of changes in a register or spreadsheet is no longer sufficient. There is now a requirement for a strong audit function, and it is very difficult to set up systems to be able to manage this capability in a spreadsheet.

Spreadsheets are often like a leaf on the end of the branch – they are at the end of the line and do not feed back to the other systems. The information contained within them does not go anywhere. It just drops off. When it has done its job, it just falls away, and the history of that leaf is gone, and a new leaf emerges.

If you are going to run a professional cost management environment, or project controls environment, you must have streamlined change management. When attempting to manage change in multiple tools or within a spreadsheet, it is very difficult to maintain the golden thread throughout the project and organization.

Important Change Management Questions to Answer

It is paramount to be able to answer the following change management questions:

  • How did a change go through the review and approval cycle, was the appropriate due diligence undertaken?
  • What was the result of that review and approval?
  • Who physically or electronically signed off and committed the program to go down that particular path resulting from that change?
  • How was the funding requested, allocated, and tracked?
  • Who agreed to the changes in design, cost, and schedule?

These questions may not be asked immediately; sometimes they come up well down the project’s timeline, which makes an audit trail even more essential. Individual’s memories are not reliable or capable enough to recall 12 months, 18 months, or five years worth of data, a particular metric, or simply recalling why we went down a particular path. 

This ever-occurring situation creates a need for strong governance on who can and cannot sign off on change, so that later the team can go back and see exactly when, why, how, and who authorized or caused change.

 

Change Management & Project Communication

Organizations need a robust change management procedure that supports communication with all stakeholders both inside and across the organizational boundary.

Internal stakeholders may all have their own local working methodologies and reporting structures. Often, each stakeholder group (estimating, cost, engineering, contracts, supply chain, etc.) also has their own way of doing things. This includes their own procedures, reporting habits, ways of making decisions, and protocols for delivering their contribution to the project. They may also be working with their own separate systems.

Without integration and a common thread, projects cannot be fully transparent. The same change management processes, procedures, and standards need to be followed, controlled and communicated throughout the entire organization so that all departments and stakeholders are aware of changes and their impacts.

Without this communication and awareness, there is an increased risk of rework and inefficiencies, as well as missed impact analyses.

Change Management & Standardization

Implementing project controls software brings with it the benefits of standardizing procedures. Specifically, for change management, it systematizes who has authority to review and approve change. It assists in establishing a communication plan, roles and responsibility, control accounts, as well as change control and its trends.

This systemization enables not only enhanced communication, but also transparency and proper valuation of change. The stakeholders and the client or customer need to be able to see the change being requested and what the full impact of that change is, in order to make the right decision for approving or rejecting it.

In addition, if due diligence is not completed, and the full impact of bringing that change on board is not understood, money may end up being lost on the change. With a standardized process and a strong audit trail, all change can be linked back to deviations in the schedule, the estimate, and their impact on cost at completion.

Change Management & Project Decision-Making

Implementing a cohesive thread throughout the organization provides for better-informed and faster decision making.

Often, a situation will arise and forecast that a potential change may be coming. One of the great benefits of a golden thread approach is the opportunity to do scenario modeling earlier with all the facts and the traceability back to the historical data. Without this thread, it can be burdensome, and time consuming to evaluate the different options and understand what risk management approach ought to be implemented.

For instance, it can be challenging to model the cost and impact of mitigating the risk compared to just accepting it when systems are siloed instead of integrated. Without the finance system, engineering system, scheduling system, etc., all being connected, modeling possible mitigation plans and understanding the impacts of each course of action may not be feasible within the timeframe available. The golden thread provides the ability to have well-informed decision making occur earlier in the project. This increases the likelihood of project success and can result in fewer delays and increased cost savings.

Difficulties Organizations Face When Implementing Change Control

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Successful change management relies on three pillars within a company. These are the three legs of the stool that make the whole system work:

  1. People
  2. Process
  3. Technology

If the people tied to the project are not engaged and the process is not sound, the system will never work. The change management process needs to map into the organizational structure and be underpinned by the systems or applications.

    If the people tied to the project are not engaged and the process is not sound, the system will never work. The change management process needs to map into the organizational structure and be underpinned by the systems or applications.

    It is critical that the organizational process includes strong governance, such as mandated approval limits for each level of approver. The technology must be able to support these mandates. The more stakeholder support the change software can provide for ensuring its easy for people to adhere to the processes, the stronger a company’s ability to manage change.

    When sound governance and the supporting technology are not in place, change management will be challenging. The following five scenarios will make implementing structured change management more problematic:

    1. Implementing a change management system is not an IT project. It is a cultural change and an overall business change. If not approached in that way, it can fail, as it must be adopted throughout the entire organization.
    2. People may understand the mechanical process for change management, but may not fully grasp the complex impact that change can have. They do not understand the longevity of the change record and what it affects.
    3. A lack of strong leadership from the top can cause processes to fall apart. Senior management may not have a full understanding of, or may not be in strong support of, the change management process.
    4. People are not engaged, either because they are emotionally invested in their old methods, or because they do not fully understand the new processes and systems. It is easy for people to become entrenched in familiar ways of doing things, or for people to be nervous or fearful of change.
    5. Another hurdle is that people fear the loss of control. There is a worry that the systems and processes will cause delays. This may create an unwillingness or inability to do proper impact assessments, due to the potential time it may take and the number of people who need to assess.

    Factors of a Successful Change Management Implementation

    Implementing a strong change management software system is only part of the solution. In addition to the three main pillars needed to make the system work, there are five key criteria that are necessary for the implementation itself to be successful.

    1. Strong Sponsorship Success starts at the top.
      A powerful, bold sponsor is imperative to the successful implementation of any significant change. Regardless of who the tactical operating contact is, strategic sponsorship is best placed with someone on the executive team. In fact, the sponsor should be in as high of a position within the company as possible. Change management affects too many departments and is too integrated for it to be led by an isolated functional leader, as this is a business transformation. Therefore, even if the everyday contact is within one function, executive sponsorship is necessary to ensure the business is fully on board and engaged.
    2. Change Leaders
      One dedicated sponsor is not enough for the success of a new change management process. Lower-level leaders, spread throughout the organization, also need to act as champions of change. Dedicated and engaged individuals throughout the company need to have the power, knowledge, and confidence to implement the new processes and to stand up to those who are opposed to change.
    3. Foundational Training
      Key users or super users need to be selected and provided with in-depth training. The training needs to not only include how to use the software, but also the proper processes for change management, including the processes that happen outside of the system. These super users are necessary to both act as change leaders and to support the average user. The average user will be trained in less than half a day. They need to be provided with easy to digest snippets of knowledge that are easy to comprehend and implement. This can then be followed up with user videos and documentation that they can go back to repeatedly as their use of the tools progress.
    4. On-Site Support
      On-site or at-elbow support allows for employees to gain the confidence to deploy and disseminate what they know. Embedding experts into the change management teams helps empower the super users. It ensures there is sufficient time for in-depth knowledge transfer, including training on the nuances of how the system works. In addition, it helps support the cultural change and transition of the company and reinforces the idea of continual improvement.
    5. Fluid Processes
      It is important to have process governance, to ensure processes are followed. However, if processes are too rigid, they can cause delays, incur costs, or even kill a project. If a process is too lengthy or time-consuming, teams could end up with a standing army costing their companies money every day, while they wait for an impact assessment or approval. The change review and approval process needs to be streamlined to provide the best service to both the project management team and senior management. It is critical to have tools and techniques that support quick communication of changes and decision-making. The ability to set up different approval hierarchies for different levels of changes can expedite the process

    Change Control Adoption & Implementation Timeline

    Implementation of a new change management software could take as little as 6-8 weeks if there are already change management processes in place within the organization. However, if strong processes are not in existence, and individuals and/or teams are not yet in support of standardized change management, it could take up to six months. Ultimately, the time frame depends on the maturity of the organization.

    Best practice indicates that it is ideal to begin change management implementation with a pilot, usually a small project or program. This can be accomplished by running a pilot quickly, on a very limited budget, in a small part of the organization, at very low risk. Afterwards, it becomes the norm for future programs and perhaps even back-fitted to existing portfolio programs, retrospectively. This ensures that the business procedures and the people in the organization can come onboard with the technology that is underpinning it before rolling out that capability globally within the organization.

    Benefits of Utilizing The Golden Thread of Change Management

    Structured change management processes and procedures are imperative for the success of a project and an organization. In order for these systems to be successful, more than just advanced technology is needed. The five key factors discussed above are critical for the successful implementation of the golden thread into businesses and organizations. Also, for the system to have lasting success, the three pillars of change control need to be in place. A lack of any of these components can cause change management to fail.

    If these key factors and pillars are successfully integrated, change management can create significant benefits for a company, including improved decision making, streamlined processes, reduced administration, and improved transparency and project visibility. This translates to better performing projects, improved margins and schedules, and more satisfied customers.

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