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Importance of Organizational Change Management

Updated: Oct 14, 2023

Most organizations today utilize multiple vendors and that provide services ranging from HR, strategic help, deployment/implementation and operations. As a result, there are multiple initiatives being planned or running at a given time. Organizations move and rely more on IT driven services and CIOs are increasingly asked about the ROI of the total investment. Lower ROI is not always about technology. Ahead, we discuss why it is prudent to look into a Change Management Office (CMO) to provide organizational change management that help improve ROI.

Key change management challenges for CIOs

Organizations are increasingly relying on IT and technology to function. The Chief Information Officer (CIO)s are planning or are in the process of deploying IT driven services to the stakeholders. Organizations are likely planning to or already have a degree of change management function to better plan and execute a project for increasing the chances of success and adaptation. However, in doing so they face obstacles that are not always technology driven.

The CIOs are often challenged to justify IT initiatives and the organization’s ability to realize their promised benefits. In addition, IT spending is increasing and this primarily includes capital expense (capex) and operational expense (opex). Many organizations and its key stakeholders see IT spending as a necessary evil and non-revenue generating spending. This lens needs to change in today’s hybrid business world where every major capability that organizations may have rely on IT to keep generating revenue and adhere to their missions and objectives.

IT is a strategic enabler and not just an operational expense. Due to often being perceived to be non-business impact initiatives, the COIs face a challenge in convincing the board and the stakeholders on value, importance, benefits, and ROI that IT offers.

The reason for poor understanding of the strategic importance of IT could have several factors. Organizational change management is one of the key areas that is often the afterthought even on multi-million dollar projects. Our viewpoint on reasons why Identity management projects fail covers several reasons on the failure of initiatives. The challenges CIOs face include:

  • Resistance for change and lack of new technology adaptation

  • Key stakeholders not having common understanding i.e. organizational silos

  • Business having shadow-IT resulting in increased risk and duplication of overlapping products

  • Lack of common tools, processes, and methodology on change management, training & communication, and ennoblement

  • Lack of resources and funding

  • Skill gap

Several of these challenges can be addressed by having organizational change management practices that allow consistent messaging, reporting, and identification of risks (e.g. skill gap, funding shortfall or budget overrun) more proactively.

What is Change Management Office (CMO)

The Change Management Office or function is a centralized office that provides a set of methodologies, toolkits, governance structure, and have authority to implement changes. CMO works with all major initiative leads to plan, organize, and enable change that helps achieve better outcome of the initiatives. CMO also monitors and measures the effectiveness of the change.

CMO’s place in an Organization

Due to organization wide impacts and reach, the CMO is not contained in one business unit. Instead, depending on the size of organization, the CMO office should be accountable to senior leadership that has authority for decision making at the organization level. Doing so will result in CMO being able to wield enough authority and respect across all functioning areas of the organization. CMO will have visibility of all different initiatives that may have potential to impact the organization stakeholders, as a change in one area could have impact to another area. Therefore, CMO can bring the necessary clarity and alignment to avoid negative impact and disruptions of the change. CMO function is not a burden or an operational expense only, but it needs to be viewed as a function that has potential to prepare an organization strategically and competitively.

CMO works with the three key change enablers:

  • Leadership decision makers

    • Make high level organization-wide decisions, initiative prioritization, and budget allocation

  • Business line leaders (enablers)

    • Accountable for implementing the change, resource planning, and budget tracking via their respective initiative team

  • Target audience or end users (e.g. all employees)

    • All end users who are impacted by the change

Who can leverage the services of the CMO?

  • Executive leadership responsible for organization wide change

  • Line of business owners who typically are the initiative sponsor and responsible for outcome of the initiative including budget, resource, and initiative objective

  • Program management and project managers who enable the execution of initiatives and are directly responsible for the management of scope, budget, and outcome of the initiative

  • Technical owners of an initiative who are responsible and are knowledgeable of the effort involved with the initiative

  • Risk and/or audit teams who are responsible for ensuring compliance and the regulatory impacts of the initiative or change

  • Individual team members who are responsible for individual tasks

  • Stakeholders who are responsible for reporting and analyzing the change

  • End users and any other entity (both internal and external) who are affected by the change that the initiative would bring

Effectiveness of the Change Management Office

The Change Management Office function has reach across an organization and as a result it is important to understand its effectiveness. The effectiveness of the CMO team can be attributed to following indicators.

Quality CMO team members

Experience drives quality. The leadership team should look into experience when staffing the CMO team. The quality and effectiveness of overall CMO as an extension of the leadership team depends on the staff that makes the CMO team.

  • CMO is looked at as a change enabler. The team should be experts in designing impactful ways in planning, effective communication, and ability of rolling out the change

  • CMO team’s ability to work with diverse business units in relation to the initiatives

  • CMO team should be able to foster strong trusted relationships

  • CMO team should be able to work with differing opinions and interests

  • CMO team should be able to define repeatable processes and frameworks that bring efficiency

Empower the CMO team

The CMO team is effective when the team is balanced (e.g. have representation of diverse experience and business functions and is allowed to take decisions to enable the change. CMO team needs to have visibility on strategic priorities and budgets. A well balanced and experienced CMO team will be able to:

  • Come up with initiative prioritization recommendations

  • Budget planning and budget recommendations

  • Skill gap, change eneblement, and training needs

  • Able to form a message that represents an organization’s vision and priorities

  • Able to learn and improve based on the feedback from stakeholders and those who are impacted by the change

Ability to “fit-in”

CMO can be perceived as the extension to a project management office and its functions. Both the initiative team and project manager(s) could be confused and have a lesser degree of trust towards CMO objectives. CMO could be looked at as someone who is watching them. An experienced CMO team is successful in their communication in ways to differentiate their role as a helpful extension to the project management team on changes that impact organizational constituents.

A well-functioning CMO should be able to keep their separate lane to avoid appearing to overstep on day-to-day level project management. CMO can resonate with initiative team and stakeholders by providing value added input on what they will be able to do that takes away communication and change burdens from the project manager. In doing so will increase the chances of a successful outcome and adaptation of the initiative.

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